Biotech Movers: Sanofi SA (ADR) (NYSE:SNY) And Voyager Therapeutics, Inc. (NASDAQ:VYGR)


News hit press on Monday that Sanofi SA (ADR) (NYSE:SNY) has opted not to take on the development and commercial rights of VY-AADC program, which the former was running in collaboration with the drug’s developer, Voyager Therapeutics, Inc. (NASDAQ:VYGR). The program was set up to investigate the potential of VY-AADC in a target indication of advanced Parkinson’s disease.

When we see this sort of option decline (i.e. a big name healthcare company turning down an opportunity to carry a collaboration drug forward into late-stage trials) it generally indicates that the asset in question doesn’t have a great chance of picking up regulatory approval. Right now, it looks as though markets are of that opinion, with the company currently trading down by around 20% on its pre-announcement market capitalization.

In this instance, however, there may be some mitigating circumstances that imply that this market response might be a little off.

Specifically, Voyager has reported that the decision by Sanofi not to continue forward with the program is rooted in terms of the arrangement, as opposed to the company’s expectations for a successful advance through late-stage trials. According to Voyager, Sanofi’s decision was due to the inclusion of rights only outside of the US. Sanofi hasn’t offered too much in the way of clarity as to what’s going on, so the validity of Voyager’s interpretation of the situation isn’t concrete, but it seems to make sense.

If this is the case, then, the fact that Voyager now has full worldwide development and commercial rights to VY-AADC is a real strong point for the company.

The program is about to move into a pivotal phase II/III program (management has said it expects to initiate the program before the end of the year) and this program has the potential to bring with it a whole host of catalysts – each of which could induce an upside revaluation for the company.

Parkinson’s is a tough indication to target, so the outcome of the pivotal program is far from guaranteed. With that said, however, there’s a huge potential market on offer for a company that can get an improved asset on shelves in the US in this indication, so there’s a substantial incentive to carry the program forward for Voyager, whatever the situation in the clinic.

Another big mover early this week is Johnson & Johnson (NYSE:JNJ). The company announced on Monday that the FDA has approved one of its lead development assets, a drug XARELTO, which a 10 mg once-daily dose of rivaroxaban, for reducing the continued risk for recurrent venous thromboembolism (VTE) after completing at least six months of initial anticoagulation therapy.

This is a drug that was initially developed by Bayer but has since been pushed forward as part of a collaboration between the developed and Johnson & Johnson and, in addition to the latest approval, it’s also used pretty widely in alternative indications – most of these being anticoagulation type treatments like stroke prevention in atrial fibrillation, treatment and prevention of VTE (DVT/PE) and Secondary Prevention after ACS.

Markets are responding pretty positively to the news, with the company trading up a couple of percentage points subsequent to the announcement. This is a meg cap in the healthcare sector so an approval like this isn’t going to have the impact on market capitalization that it might have for a smaller, development sage company. With that said, a couple of percentage points is nothing to balk at when you’ve got a market capitalization of more than one-third of a trillion dollars, as does Johnson & Johnson (market cap at close of play on Monday came in at a little over $375 billion).

The news also comes at a pretty good time for the company, with the drug having taken something of a hit earlier this month. In a trial that Bayer conducted and pitching XARELTO against aspirin in a stroke prevention indication, the former failed to outperform the latter. This subsequent FDA win for XARELTO, therefore, gets the program back on track in the US and reinforces peak sales estimates of a little over $5 billion.

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