Biotechnology Movers: Karyopharm And Synergy

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Synergy Pharmaceuticals Inc

Karyopharm Therapeutics Inc. (NASDAQ:KPTI) and Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) are both moving heading into the end of the week in the biotechnology space, with a couple of fresh inputs driving each.

Here’s what’s going on and what to expect going forward.

Karyopharm

This one is rooted in the company’s announcement that healthcare behemoth Biogen Inc (NASDAQ:BIIB) is set to acquire one of Karyopharm’s lead development assets. The drug is called KPT-350, currently under investigation as a potential therapy for patients suffering from certain neurological conditions, primarily amyotrophic lateral sclerosis (ALS).

As part of the deal, Karyopharm will pick up a $10 million upfront cash injection from Biogen, while another $200 million has been earmarked for future milestone and development payments associated with the drug. There are also a few other compounds included in the deal, which Biogen has an option to acquire and develop on top of the KPT-350 asset if it chooses to do so.

So what does this program mean to Biogen?

ALS is an incredibly debilitating disease for which there currently exists no cure, and barely any treatment. The Ice Bucket Challenge that caught on globally back in 2013/14 spread awareness of the disease, designed to raise money for research into the condition. Physicist Stephen Hawking is the most famous sufferer of the disease.

The drug that forms the core of this agreement, KPT-350, is a Selective Inhibitor of Nuclear Export (SINE) compound, which binds to and inhibits a protein called XPO1. XPO1 mediates the nuclear export of a group of proteins that play key roles in neurological and inflammatory processes so the idea is that through its inhibition, the drug can slow the progression of (or possibly reverse, though this is a much tougher task) these sorts of neurological conditions.

Of note, this drug remains very much in the early days of the development lifecycle, having only just completed preclinical testing and being yet to advance into human clinical trials in the United States.

This is reflected in the fact that Biogen has back-loaded the deal pretty substantially. With that said, however, a $10 million cash injection for a company the size of Karyopharm (which currently holds a market capitalization of around $500 million) is significant for the company’s balance sheet.

Markets are recognizing this fact and trading up on Karyopharm in the wake of the news, with the company closing out the session on Thursday for a 13% premium to its daily open.

Synergy

Synergy is also rooted in some positive news. On Thursday, the FDA announced that it had approved a drug called Trulance (plecanatide), which Synergy has developed as a once-daily treatment of irritable bowel syndrome with constipation (IBS-C) in adults.

The drug is actually already approved in another similar condition called chronic idiopathic constipation (CIC) – an approval that Synergy picked up back in January last year.

The latest approval expands on the potential target population, however, making it a big deal for Synergy and shareholders purely based on the top line impact that a target population expansion can have for a drug like this.

Analysts have estimated peak sales for this drug at close to $700 million annually but some doubted Synergy’s ability to ‘go it alone’ and not pick up a partner that might be able to help fund the drug’s commercialization efforts.

These concerns, with the latest approval in the bag, are somewhat alleviated, but there’s still a long way to go before the drug reaches its target potential. Net sales during the third quarter of 2017 came in at al little over $5 million, based on circa 25,000 prescriptions.

This represents a 105% increase over the prior quarter and totals the prescription count (to the end of the third quarter last year) at just shy of 40,000.

This is some positive news and Synergy initially spiked on the development but settled down to close out the session relatively flat on Thursday, primarily because the approval was largely expected.


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