So we are midway through the week and we have seen a few big movers during the week so far. Here is a look at two of those movers with a description of what’s moving and where we expect the companies in question to go throughout the session today and beyond, into the end of the week.
The two companies in our crosshairs for today are Spark Therapeutics Inc (NASDAQ:ONCE) and Exelixis, Inc. (NASDAQ:EXEL).
So, first up, Spark.
On Tuesday, Spark announced that the Food and Drug Administration (FDA) in the US has approved one of its lead development assets, a drug called Luxturna (voretigene neparvovec-rzyl). The company was trying to get the drug approved in a target indication of the treatment of children and adult patients with an inherited form of vision loss that may result in blindness.
The drug itself is a form of gene therapy that’s designed to replace a dysfunctional or mutated version of what’s called the RPE65 gene, which, in all cases of this disease, patients have two of, one from each parent.
The idea is that by replacing these dysfunctional forms of the gene with a functional one, the gradual loss of sight and eventual blindness can be reversed. It’s a pretty new treatment and, as per the latest FDA approval, it’s now been validated.
This one is interesting for a couple of reasons.
First, it was an early approval, with the initial PDUFA date not originally slated until January 12, 2018. This is the second early approval we have seen this week (we will look at one more, a third, in a moment) and it is representative of the agency in the US’s attempt to show policymakers that it can speed up as far as processing these applications is concerned. This has already been a record year for approvals and every additional approval between now and 2018 adds to this record number.
It’s also important because it is representative of a wider overarching shift in treatment type in the US.
FDA Commissioner Scott Gottlieb said this regarding gene therapy:
“I believe gene therapy will become a mainstay in treating, and maybe curing, many of our most devastating and intractable illnesses.”
And this latest approval underscores this view.
So what’s next?
Chances are we will see Spark continue to pick up some strength as we move into the end of the year and beyond in anticipation of what should be a relatively straightforward commercialization effort for Luxturna in this target population. The company is up around 5% premarket as things stand.
Next up, then, Exelixis.
As noted above, this one is also an FDA approval and, again, it has hit the press earlier than expected. On Tuesday, Exelixis announced an early approval from the FDA for CABOMETYX (cabozantinib) tablets, which the company has been trying to get approved in an expanded indication of patients with advanced renal cell carcinoma (RCC).
This is a target indication with an incredibly large unmet need right now and it’s one that – prior to this approval – didn’t really have many treatment options outside of the traditional chemotherapy and radiotherapy standards of care.
Prior to this recent approval, cabozantinib was only approved as a second line therapy but this regulatory the green light puts it on the shelf for a first-line therapy in patients with advanced form of the disease – those, in other words, that need treatment the most.
So, why is this big news?
Well, again, this one is an approval well in advance of the expected decision, with the drug’s PDUFA date on the priority review not initially slated until February 15, 2018.
This further points towards the suggestion that the agency in the US is pushing to get drugs approved in line with policymaker wishes and it adds another regulatory green light to the 2017 tally.
As far as market response is concerned, we are seeing exactly what we might expect from an approval like this. Exelixis closed up around 3% during the session yesterday and premarket today is up a further 6%.
Chances are we will see a continuation of the strength as normal participation resumes during the session today and, beyond, into the end of this week.