This time of year is always a busy one in the biotechnology space. With earnings reports hitting press left, right and center and – alongside the reports – operational updates and clinical trial data being released, traders and investors are poised to act on any fresh inputs and act they do.
We’re about to kick off a fresh week in the sector and there’s a good chance that the week ahead will be just as volatile as the one that just completed. Before things get moving, however, there are a few developments in the biotechnology sector that everyone should have on their radar.
Here’s a look at what just happened with Ocera Therapeutics, Inc. (NASDAQ:OCRX) and Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY) and where we expect each to go moving forward as markets absorb the companies’ respective developments.
So, Ocera. This one is a positive shift for the company and its shareholders based on an announcement that hit press at the end of last week detailing a potential near-term takeover. Specifically, big-name healthcare company Mallinckrodt plc (NYSE:MNK) has put in a bid to acquire Ocera for what amounts to circa $42 million, which, at current outstanding levels, boils down to about $1.52 per share. In addition to this number, however, the offer also includes one Contingent Value Right to receive one or more payments in cash of up to $2.58 per share (up to approximately $75 million) based on the successful completion of certain development and sales milestones.
That’s not a bad deal for Ocera, which was priced in and around a dollar a share before the offer came in and – on the other side of the coin – it’s a pretty solid deal for Mallinckrodt, which will be getting its hands on Ocera’s primary development drug. OCR-002 is expected to become the first intravenous pharmacologic option indicated for the treatment of a condition called acute hepatic encephalopathy (changes in the brain brought about by cirrhosis of the liver) in the US.
Moving on, let’s jump to Alnylam.
On Friday, Alnylam picked up a 10% on the back of the company putting out some data related to one of its lead development assets. The drug is called patisiran and Alnylam is trying to show that it can be a safe and effective treatment for patients with a condition called hereditary ATTR (hATTR) amyloidosis with polyneuropathy. This is an inherited, rapidly progressive, life-threatening disease and it’s caused by a mutation in the transthyretin (TTR) gene that results in misfolded TTR proteins accumulating as amyloid fibrils in multiple sites, including the nerves, heart, and gastrointestinal tract.
It’s a serious condition and treatment options in the space right now are very limited.
Alnylam is trying to change that with patisiran and – as per the latest development – it looks as though the company is doing a pretty good job with its efforts. On Friday, Alnylam reported data from a phase III trial set up to demonstrate the above-mentioned safety and efficacy. The data showed a 34.0 mean difference relative to placebo in the modified neuropathy impairment score and a 6.0 mean change relative to baseline at 18 months. Those are pretty solid numbers but – compounding the impact that these numbers have had on the price of Alnylam – Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) also put out data from its own phase III investigating a drug called inotersen in the same indication. The latter’s numbers showed a mean 19.73-point change and a mean 8.69-point benefit compared to placebo at 15 months and eight months respectively, falling short on those put out by Alnylam, and resulting in a sharp downside revaluation for Ionis roughly similar in scale to the above-mentioned run in Alnylam.
Going forward, focus shifts to the company’s submission to the FDA for approval of the above-mentioned patisiran in this indication. Exactly when the submission will take place is yet to be reported but, based on comments by management in and around the time of the release of the data, there’s a strong chance we’ll see an NDA submission before the end of the year. This sets up the program for approval at some point during the second half of 2018.