Post-Holiday Action: Movers and Shakers in Biotech

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Markets have been a little subdued over the past few days, with the Christmas holidays weighing on volume. A few companies, however, have bucked the wider market quiet, and logged some notable action. Here are two of the biggest movers from across the period.

Cellectis S.A. (NASDAQ:CLLS)

Cellectis closed close to 4% up on it’s same day open on December 24, and premarket looks set to resume this bullish momentum as we head into a fresh day’s trading on December 28. The company has had a tough month, and the recent gains are more corrective than fundamentally driven, but noteworthy nonetheless. Early December, Cellectis held a joint conference call with Pfizer Inc. (NYSE:PFE), during which markets expected an update on the two companies’ joint oncology candidate UCART19. The drug is part of the high profile group of cancer drugs known as CAR-T therapies, which involves ex-vivo reprograming of T cells (the cells in our immune systems responsible for recognizing and neutralizing pathogens) to target cancer cells. Unlike the majority of other CAR-T candidates, however, Cellectis and Pfizer’s offering uses T cells from an outside donor, rather than from the patient being treated. This has two primary benefits. First, and from a development perspective, it makes conducting clinical trials much more straightforward – the drug can be developed in advance. Second, it means Cellectis can prepare the treatment as an off the shelf therapy, which should greatly reduce the cost and time associated with administration.

Getting back to the point, and as mentioned, markets expected an update as to the development timeline, with some analysts even expecting interim from early stage, ongoing trials. These expectations failed to materialize. Instead, the conference call simply reiterated the terms of the UCART19 partnership, outlining the roles of the parties involved. This is a classic case of buying the rumor, selling the fact – something that, in biotech, can dominate early stage expectations. Now things have settled, Cellectis looks like a discounted exposure, and this discount has translated to a correction. Near term, keep an eye on the $42 mark, and beyond that, $47 – the most recent swing high and the 2015 peak respectively. If the bulls remain in control, these are the levels that will close the discount.

WAVE Life Sciences Pte. Ltd. (NASDAQ:WVE)

This is an interesting one. Wave filed for an IPO in October, and under the terms of the 2012 JOBS Act, was able to conduct its offering a little over one month later, going public on Nov 11 and raising $102 million in the process. During the middle of last week, Wave’s market cap gained close to 25% on its IPO price (having initially declined 18% to December lows), but during the shortened session on the 24th, closed 8% off these highs. The reason this volatility is interesting, is that there haven’t really been any updates relating to the company’s pipeline. Indeed, there isn’t much of a pipeline to speak of. Wave has a couple of candidates in pre clinical development, but no clinical trials ongoing. The only explanation for movement is the release of a Q10, which outlined increased research and development costs and an increased net loss – up to $12.1 million for the nine months ended September 30, 2015, from $3.4 million for the same period last year. The ramp up in costs suggests momentum from a development perspective, meaning we could be in for some big announcements early 2016, but as things stand, it looks as though the volatility is purely speculative. Wave has some big names associated with it, most notably Paul Bolno as CEO, the man who previously headed up worldwide business development at GlaxoSmithKline (NYSE:GSK), and it seems investors are willing to get behind the company at its current price based on management’s potential to successfully execute its drug development strategy. Only time will tell whether its lead tech – the so called AntiSense technology – will have the impact outlined in its filings that Wave believes it will in the genetic therapy space, so keep an eye on the aforementioned updates to see where the money is being spent, and in turn, what impact its spending might have on Wave’s chances of success.

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