We are closing in on the end of the week, and it has been a busy week in the biotechnology space. A large number of companies have put out their first quarter financials, and as we mentioned yesterday, alongside these financials, we generally get business updates and outlooks. Included in these outlooks are revised milestones and time frames, and these often move the companies in question.
Of course, there have also been a number of regulatory updates this week, and – again – these have moved the companies associated with the assets for which we have picked up an update. Here is a look at three of the biggest movers midweek, and what is moving each, with a consideration of what we expect going forward from the companies in question.
The three companies we are looking at today are Merck (NYSE:MRK), Sangamo Therapeutics, Inc. (NASDAQ:SGMO) and Proteon Therapeutics, Inc. (NASDAQ:PRTO).
So, let’s kick things off with Merck.
The healthcare giant announced on Wednesday that the Food and Drug Administration (FDA) in the US had given a regulatory green light for one of its lead development assets (and one of its primary portfolio assets) Keytruda. This is one that the company already had approved a while back, and which is already available in the US as a first-line therapy across a number of indications – primarily oncology-related – and the latest approval builds on this list of indications. Specifically, the latest announcement sees the company pick up approval for Keytruda in combination with pemetrexed (Alimta) and carboplatin for the first-line treatment of metastatic nonsquamous Non-Small Cell Lung Cancer (NSCLC).
With a company like Merck, these sorts individual approvals and going to have the same sort of impact as they might in a smaller company. Why? Because the value attributed to the additional population accounts for a far smaller portion of the company’s overall revenue streams than it might for a company whose lead asset (and only asset) was just approved. With that said, however, any approval is good news, and we expect to see a small boost even in a company of this size on the news. In line with these expectations, Merck picked up a bit of strength on the back of the release and currently trades for around 3% higher than its pre-release market capitalization.
Next up, Sangamo.
This company announced alongside its first-quarter earnings that it has struck a collaboration deal that will see it work with Pfizer Inc. (NYSE:PFE) on a treatment for hemophilia A. The deal involves a $70 million upfront payment from the latter to the former, and a further $450 million in potential milestone payments as the assets in question navigates the clinical development pathway and moves towards approval in the US. The primary asset associated with the deal is a drug called SB-525 but the two entities will work together on (reportedly) a variety of additional programs towards the same aim – hemophilia A.
Just as with the above discussed Merck situation, this is a classical biotech type driver. The upfront payment alleviates some degree of dilutive risk, while the milestones present a forward pathway littered with potential capital injections for Sangamo, making each catalyst that little bit sweeter. As such, and as expected, Sangamo is trading up on the news. At last count, the company went for $6.10 per share – a close to 41% increase during after-hours trading in the US.
This company just announced that its lead development asset, a drug called vonapanitase, has picked up breakthrough therapy designation from the FDA in the US. The drug is designed as an asset for increasing arteriovenous fistula secondary patency and use for hemodialysis in patients on or expected to initiate hemodialysis. This one is a bit of a mixed bag. The drug failed a phase 3 trial at the end of last year, missing its primary endpoints in the study, but development continued into a second phase 3 study that is ongoing. Data from this study is expected to hit press during the first quarter of 2019, but the story itself is expected to complete during the first quarter of 2018. Markets are hoping that – when the data hits – it can demonstrate efficacy where the previous trial failed to, and breakthrough designation should help speed things along little. Proteon is currently trading at a more than 20% premium on its preannouncement pricing.