As we head into a fresh week’s trading in the biotech sector, which companies are experiencing the most volatility and why? Let’s take a look.
ProQR Therapeutics N.V.
First up, ProQR Therapeutics N.V. (NASDAQ:PRQR). At the end of last week, this company traded for a little over $13 a share. At today’s open, you can pick up an exposure for just $7.40 – a 43% discount across a three day period. Why the decline? Well, ProQR’s lead candidate, QR-010, is currently in trials in both the US and Europe, with a cystic fibrosis indication. Data from both trials was scheduled for release before the end of the quarter, and until the end of last week, the company gave no indication that this was set to change. On November 23, however, and alongside the announcing of a $6.3 million net loss for Q3, ProQR stated that it was revising its topline expectations, putting the data back nearly a full year to Q3 2016. In the biotech space, a year isn’t necessarily that much – but considering the trial is just a phase 1, it doesn’t bode well for the drug. The reasoning behind the delay is a lower than expected enrollment rate. The company had hoped to pick up the pace of its enrollment during Q3, but (and as stated) due to a glut of CF trials currently ongoing, it has struggled to meet its own expectations. So what does this mean going forward? Well, the biotech sector is an impatient one, and delays like this, while not necessarily indicative of a drug’s efficacy, can negatively affect market sentiment. Sometimes, however, and due to this impatience, the markets can oversell and translate to opportunity. QR-010 performed well preclinically, and if the company can get its enrollment schedule back on track, the recent decline might quickly recover. We expect an update during Q1 2016, so keep an eye on ProQR’s releases as the new year rolls in to get an idea of the revised schedule and, in turn, the likelihood of said recovery.
Raptor Pharmaceuticals Corp
Next, Raptor Pharmaceuticals Corp. (NASDAQ:RPTP). We covered this one in a focus piece last week, so if you are one of our regular visitors you will already be aware of the company’s lead candidate, RP103. For those that aren’t, it’s a Huntington’s disease drug, with an MOA rooted in genetic engineering. Raptor reported 18-month data last year, which suggested statistical insignificance and – in turn – a discontinuation of its lead trial. However, the company gave us an update at the end of last month that suggested efficacy at 36 months, based on a continuation of the initial trial that saw a placebo group switch to live treatment. On Friday last week, Raptor reported further data from this trial, and revealed that RP103 had missed one of its primary endpoints, specifically an improvement from baseline in what’s called Total Motor Score (TMS), which is a sector-standard measurement in Huntington’s. Again, however, and to reiterate the opinion we presented on this company last week, there may be an opportunity here. The company took a close to 20% hit on the release of its latest data, but alongside the announcement, stated it intends to move the drug forward in development in both the UK and Europe. How is this possible? Well, the trial had two primary endpoints. One was the aforementioned TMS, the other was what’s called an independence scale – essentially a measurement of a patient’s ability to function independently. The independence scale measurement came in with a statistically significant improvement, and this will form the basis of discussions with the EMA and the FDA as far as initiating a pivotal trial in the respective regions is concerned. We expect both pivotals to kick off before the middle of next year at the latest, and if all goes well, we subsequently expect a recovery in the company’s market capitalization. Of course, taking a position at this stage is very risky. Raptor may be continuing the development of RP103, but we can’t forget that it has essentially failed a trial, and this paves an uncertain path going forward. For the risk tolerant, however, it might be one worth keeping an eye on.