Biotech Movers: NewLink Genetics Corporation (NASDAQ:NLNK), Dynavax Technologies Corporation (NASDAQ:DVAX) and XBiotech Inc. (NASDAQ:XBIT)


Here’s a look at three of the biggest movers at the end of last week and what we expect from each as the biotech sector opens its doors for another week of trading.

The three companies in our crosshairs today are NewLink Genetics Corporation (NASDAQ:NLNK), Dynavax Technologies Corporation (NASDAQ:DVAX) and XBiotech Inc. (NASDAQ:XBIT).

So, let’s kick things off with NewLink.

After the market closed for the week on Friday, NewLink reported data from one of its lead development programs – an investigation into the safety and efficacy of a drug called indoximod, designed for use in combination with taxane chemotherapy, for patients with metastatic breast cancer. This is a large unmet need in oncology right now, and indeed in healthcare as an entire space, and the company is trying to meet this need with the program in question.

Unfortunately, however, as per the latest data, it doesn’t look like this is going to be the asset that solves the issue. The data derives from a phase II trial of the drug in the above-noted target population and shows that the drug failed to hit three key endpoints – progression-free survival, overall survival and objective response rate.

Ahead of market open on Monday, the company is down more than 11%, as operators exit positions in anticipation of the study being discontinued, at least in this population.

Moving on, let’s look at Dynavax.

This one’s also a data driven move but in the opposite direction. Dynavax is a development stage biotech that’s focusing on the development of cancer drugs and – as relates to this event specifically – it’s just put out data at ASCO concerning a phase Ib/II trial of a drug called SD-101. The company is investigating the drug as a potential therapy in this indication when used in combination with Merck & Co., Inc. (NYSE:MRK)’s Keytruda for the treatment of melanoma.

The numbers showed that in seven anti-PD-1/L1-naïve patients, the combination resulted in an overall response rate of 100%, with a complete response rate of 29%. This is a meaningful increase overuse of Keytruda alone, which generates an overall response rate of around 33% and a complete response rate of 6%.

That was the first part of the release.

Other data showed that, in 12 patients with advanced (stage IIIc/IV) melanoma who had previously failed on anti-PD-1 treatment, introduction of SD-101 resulted in tumor shrinkage in 42% of patients, with 17% having a partial response PR, indicating an anti-tumor immune response generated by SD-101.

The company currently trades for a close to 20% premium on its pre-release pricing and we expect this one to continue to appreciate throughout the week as markets load up ahead of the drug’s advancing into the latter stages of the development pathway.

Finally, then, XBiotech.

Again, a data move.

The company put out a press release on Friday announcing that data from its European phase III trial of a drug called Hutruo (MABp1) in patients with of advanced colorectal cancer will be presented at ASCO.

While the press release didn’t really serve up too much in the way of detail as to what the data would say about the drug, we did get a headline as a clue, and as part of the headline, XBiotech noted that the trial improved survival for patients achieving the primary endpoint in the above noted advanced colorectal cancer population.

This is, of course, good news, but there’s a catch. The data looks positive at a glance and the press release seems to infer efficacy, but when you scratch the surface a little, things aren’t quite as rosy as they might be. The benefit brought about by the drug, while significant from a statistical standpoint, is minimal in terms of actual clinical benefit, and this serves up some degree of uncertainty as to its chances of picking up an FDA green light when it goes in front of the agency.

This uncertainty was compounded when an advisory panel, on the back of its meeting to discuss the drug’s safety and clinical benefit, concluded with the following:

“The clinical relevance of this rather small difference in favor of treatment with MABp1 is questioned and not considered compelling. Neither the sensitivity analyses of the individual co-primary endpoints, not the analyses of secondary or exploratory endpoints provide any supportive evidence for efficacy in favor or MABp1.”

As things stand, however, and despite the seemingly negative panel outcome, the company is up heading into this week. XBiotech will open Monday’s session at a close to 10% premium on its pre-announcement pricing.

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