Facebook Linkedin Tumblr Twitter
Home Blog Page 14614

Monday’s Movers and Shakers in Biotech

By
Roger Hannington
-
biotech

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.

Story continues below

The Latest Raptor Announcement May Be More Positive Than Markets Think

By
-
Raptor

Yesterday, Raptor Pharmaceuticals Corp. (NASDAQ:RPTP) announced it would be advancing its lead development candidate, RP103, into a pivotal trial designed to test the drug’s safety and efficacy in a Huntington’s disease indication. The company has already had some bad luck with the drug in another indication earlier this year, and in its earlier phase Huntington’s trial, RP103 missed its primary endpoint of statistical significance. Under normal circumstances, the failing of a primary in a phase II would put a stop to its development. In this instance, however, the company is forging ahead with the goal of the pivotal trial forming the basis of an NDA on completion. It is a risky strategy – pivotal trials can be expensive – but a look at the data supporting the move suggests there may be a high enough potential for reward to warrant the risk. Further, a look at the company’s current market capitalization suggests wider markets disagree with this thesis, and as such, there may be an opportunity for a contrarian entry in support of the company’s expectations. Here’s why.

First, let’s take a quick look at the drug and its target indication. Huntington’s is a genetic disorder that affects certain parts of a patient’s brain. We don’t really understand the exact mechanisms through which it inhibits brain function, but we know that what’s called an autosomal dominant (just means the first allele, non sex-related chromosome) mutation causes the hungtingtin (yes, this is spelled right) gene to create a faulty version of the huntingtin protein, which over time damages brain cells. This damage leads to initial loss or impairment of motor functions, and eventually, degradation of mental capacity and dementia. RP103 helps (theoretically) in a few primary ways. First, it inhibits pretoein aggregation, which should serve to reduce the pace of degradation. Second, it improves the level of transcription of heat shock proteins, which are the proteins responsible for the “clearing out” of unwanted proteins – in this instance the faulty huntingtin proteins. Finally, based on preclinical trials, the drug increases the production of what’s called brain derived neutrophic factor, or BDNF. BDNF supports growth and functionality of healthy brain cells.

So, what happened in the trials, and where does the doubt lie? Well, the initial trial ran for 18 months, with a primary endpoint of change from the baseline of the Total Motor Score, or TMS. At 18 months, RP103 treated patients showed a change from base of 4.51, while placebo showed 6.68. This is clinically relevant, but not statistically significant, and so the trial missed its endpoint. Fast forward 18 months, and the company reported the 36-month data. At this point, all trial participants were in the RP103 arm, with placebo patients converted to RP103 treatment at the 18-month mark. This is where things get interesting. At 36 months, data shows that patients treated for the full 36 months showed a 25% slower disease progression than those with the delayed start. In a completers analysis, the data was even better, showing a 35% slower rate of decline as measured by TMS.

What’s the point here? Well, it demonstrates that long term, RP103 is effective in slowing the rate of decline. It may not have been stat-sig at 18 months, but maintaining therapy improves the numbers, and the 36-month data supports this hypothesis. In an indication where very little treatment options exist, this is exactly the type of data the FDA looks for when considering approval. One thing to note is that, at 18 months, there had been a few adverse events, including a suicide. At 36 months, there have been 3 suicides. This, however, is nothing to be alarmed about. 25% of Huntington’s sufferers attempt suicide at least once, and the condition accounts for up to 7% of all suicides in the US. In other words, the suicide AEs fall in line with the wider population rate. Additionally, in a number of other RP103 trials (in other indications) there have been no suicides.

So there we go. We’ve got a company with a lead candidate that missed an endpoint, but has demonstrated clinical relevance in a severe and debilitating condition. Further, we know that over time, efficacy improves, and that the drug is (when taken in context) safe. Raptor is down more than 65% on 2015 highs, and is a company well worth a risk tolerant investor’s consideration as a potential small scale allocation.

Story continues below

Two Approvals Mark a Busy Week at the FDA

By
-
FDA

The FDA has been busy this week, approving both Vonvendi, Baxalta Incorporated’s (NYSE:BXLT) Von Willerbrand disease treatment, and Bendeka, Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) and Eagle Pharmaceuticals, Inc’s (NASDAQ:EGRX) oncology drug. Both approvals initiated some upside in the companies involved, so let’s take a look at the drugs in question in an attempt to put a dollar value on their impact on revenues.

First then, let’s look at Vonvendi. As mentioned, the FDA approved the drug for a Von Willerbrand disease indication, which makes it the first recombinant (just means produced through genetic engineering) treatment for the disease. VW is a condition that causes insufficient blood clotting, which in turn causes abnormal bleeding in a patient. It comes about as a result of a patient having a deficient (or not having at all) something called the Von Willebrand factor (vWF), which is a protein vital to the platelet adhesion process (this process is at the root of the blood clotting process). It’s a pretty common condition, affecting up to 1 in 100 people in the US, but severity ranges pretty widely, so Vonvendi won’t go out to a large portion of the potential patient population; of course, however, it still has a pretty big market. The science behind this one is pretty complicated – gene therapies normally are – but in a nutshell, the treatment is a mix of proteins that aid the clotting process. As such, it is an on demand treatment, rather than an ongoing therapy, designed to treat specific and real time episodes of heavy bleeding.

So what’s the potential for the drug from a financial perspective? Well, with an indication like VWD, its all about education. Globally, there are only 16,000 (approx.) individuals currently receiving therapy for the condition. For a disease that has an incidence rate of 1 in 100, a figure as low as 16,000 suggests a massive under-diagnosis. As a result, Baxalta is embarking on a mission to educate physicians and patients, before it fully commits to a launch. With this strategy, the company expects a slow start, with forecasts of $15 million revenues in 2016 and $30 million in 2017. However, once the company is able to market the drug to the total population (currently it is just 18 and over, and a large portion of sufferers are children) analysts forecast peak sales of $400 million.

So, moving on, let’s look at our second approval – Bendeka. This one came about as a result of a colab deal inked back in February between generics king Teva and Eagle Pharma. The deal saw Teva take over commercialization responsibility, while Eagle developed the drug to approval, with the former paying the latter a $30 million upfront fee and earmarking $90 as milestones – the vast majority for which Eagle has now presumably become eligible. The FDA approved the drug in two oncology indications – chronic lymphocytic leukemia (CLL) and B-cell non-Hodgkin lymphoma (NHL) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. The drug is a rapid infusion reformulation of a drug already approved in the cancer space, bendamustine (rapid infusion just refers to a one-off, IV administration that usually takes about 10-15 minutes). It is what’s called a nitrogen mustard – the same compound found in mustard gas – and targets tumor cells with the goal of inducing apoptosis.

From a financial perspective, once again, this one is not so straightforward. The current formulation of bendamustine is a Teva product, so the new formulation is effectively competing with Teva’s already commercialized product. Having said this, with the rapid infusion, it is likely Teva will convert all of its bendamustine indications (the drug is used across a range of cancers outside of CLL and NHL) to the new formulation. With the current indications, analysts forecast revenues of circa $750 million in the US. An undisclosed portion of net sales will go to Eagle, but even with the royalty payments, if Teva can expand the approval base beyond the US (these cancers both have a higher incidence rate in Europe than they do in the US) the company could easily be looking at a $1 billion blockbuster with this approval.

At time of writing, a few hours before the Thursday opening bell, Eagle is trading at a 5% loss across Wednesday’s session, Teva is up 1.2% pre market and Baxalta is up 0.6% on yesterday’s open.

Story continues below

Movers and Shakers: The Week so Far

By
Roger Hannington
-
bluebird

The biotech space rarely fails to disappoint from a volatility perspective, and this week has been no different. Here are a couple of the week’s biggest movers – bluebird and Global Blood Therapeutics – with a look at what’s driving the action in each.

Global Blood Therapeutics, Inc. (NASDAQ:GBT)

First up, Global Blood Therapeutics. The company is developing GBT440, its lead pipeline candidate for sickle cell anemia (SCA). SCA is a genetic disorder that results in the production of what are called HbS, or sickle hemoglobin. Hemoglobin is essential for carrying oxygen in the blood stream, but HbS, when deoxygenated (i.e. has no oxygen molecules attached) can “sickle”, which basically means they become rigid and change shape. GBT440 is designed to help hemoglobin maintain its oxygenated state, meaning it (theoretically) should prevent sickling.

The drug is in an ongoing phase I/II, and Global reported data from this trial late Sunday evening, followed by a presentation American Society of Hematology (ASH) Annual Meeting and Exposition yesterday morning. On the face of things, the data looked positive. Primary end point is a reduction in median sickle count, and across two doses (500 mg and 700 mg) median sickle count decreased. Despite this, however, GBT is down 25% pre session today.

So why the decline? Well, its all about variability. There lower dose caused a higher reduction in sickle count than the higher dose (56% versus 46%), and the reduction is not as high as we saw in the initial phase I. Markets seem concerned that this variability suggests unreliability. One think to keep in mind here, however, is that the trial is only very small (12 patients). The first trial was half the size. With such small sample sizes, there is always going to be inconsistency of results. Just because the two doses performed inverse to expectation at this trial size doesn’t mean we wont get some a more as-expected performance in a larger trial. Additionally, the data only represents results 30 days into treatment. The trial is expected to go on far longer than this, and this could also smoothen out the data. If either of these scenarios come in to play, the current decline could be an oversell and, in turn, an opportunity for discount.

bluebird bio, Inc. (NASDAQ:BLUE)

Staying in very much the same arena, we move on to bluebird. The company also presented data from its lead blood disease candidate at the same conference as GBT. This time, however, things were a lot more straightforward. The drug in question is LentiGlobin BB305 – a lentiviral vector with an initial target indication of beta thalassemia. This disease is similar to SCD, in that it impacts the ability of hemoglobin to transport oxygen to vital organs around the body.

The company closed out last week at a little over $83 a share, having traded pretty much flat for the last few months. At Monday’s close, however, you could pick up stock for just $52 a share – a close to 40% decline across the session. Why? Because bluebird reported it is being forced to redesign the ongoing BB305 trial, as the drug is not performing as expected. Specifically, it is not having the desired effect in severe form patients, and is producing a different response from one patient to the other in less severe form patients. We are yet to learn exactly how the company plans to alter the trial to accommodate this scenario, but regardless of its actions, a reshuffle will lead to delays at best, failure at worst.

bluebird had a great start to the year, primarily based on expectations of BB305 hitting markets at blockbuster pace. Now, however, it looks as though the drug has a limited market potential (if it can only treat non severe cases) and may not even make it to market at all if the company cannot demonstrate consistent efficacy across a decent size patient population.

While the decline in GBT looks to be a potential discount opportunity, the decline in bluebird could easily continue as we head into the middle of the week. Look for more info on the redesigned trial as a potential reversal catalyst, but don’t expect too much upside even on the reshuffle.

Story continues below

Novartis Reaffirms its CAR T Dominance

By
-
Novartis

The CAR T-cell space is one of the hottest spaces in biotech, and probably the most important space in oncology, at present. A number of companies, including Juno Therapeutics Inc. (NASDAQ:JUNO), Cellectis S.A. (NASDAQ:CLLS) and Celgene Corporation (NASDAQ:CELG) are pushing candidates through the clinical development process, but none is as advanced as Novartis AG’s (NYSE:NVS) lead CAR T offering – CTL019. The company just released an update on a ongoing phase II, investigating the efficacy of the drug in a non-Hodgkin’s lymphoma indication. So, what did the update reveal, and has Novartis managed to maintain its advantage in the space? Let’s take a look.

First then. Let’s run through the science. CAR T stands for chimeric antigen receptor T-cells. T cells are a type of white blood calls that differentiate from other types of white blood cells by expressing receptors on their surface. These receptors are responsible for recognizing antigens (on the surface of infector cells) and signaling an immune response that kills the cells. In CAR T therapy, physicians extract T cells from a patient and use a viral vector (just a biological delivery method) to introduce CAR DNA. This primes the cell for attack by “training” them to recognize tumor cells, and in doing so, is theoretically a highly selective, targeted method of killing cancer cells.

So what did the latest Novartis issue tell us about the potential future of this therapy? Well, primarily, they look to reinforce its potential. The trial is pretty small, with just 26 patients tested (15 diffuse large B-cell lymphoma (DLBCL), and 11 follicular lymphoma patients) but should easily be enough to carry forward to phase III if the company can demonstrate efficacy. Of the DLBCL patients trialled, 47% saw a reduction in cancer across a three-month period, while of the follicular subgroup, 73% saw a reduction. Non Hodgkin’s is notoriously difficult to treat, and the Novartis trial is investigating efficacy in patients that have not responded to other treatments. This sets the bar pretty low for meeting the endpoint of the trial – overall response at a statistically significant level.

So with the latest update, what can we expect from Novartis going forward? Further, is this a good time to pick up an exposure to the CAR T space? Well, the data keeps the company on track for a 2017 commercialization target – a target that relies on an NDA submission earlier in the same year. The company has suggested a list price of up to $450,000 per treatment, justifying the high price through by highlighting the first-to-market element of its campaign. DLBCL, which will be the target indication on approval, causes more than 10,000 deaths each year, and about 25,000 new cases arise in the US annually. If Novartis can capture just 20% of the new diagnosis market, CTL019 would be generating $2.2 billion at its suggested list price. Further, the competing therapies (those being trialed by the aforementioned Juno, Cellectis and Celgene) aren’t set to hit markets before 2020, meaning Novartis could enjoy three years plus of exclusivity in the space. With an effective commercialization strategy in DLBCL, and an expansive strategy in the clinic that sees CTL019 target further oncological indications, the drug could easily generate $5billion plus revenues. Novartis generates circa $50 billion revenues annually, but has a bunch of drug with patent expiries coming up over the next few years, so at these levels CTL019 is going to be a big revenues driver for the company going forward if approved.

Finally, lets talk about milestones. The closing of the current trial is an obvious near term catalyst. We can expect results early next year, and from these results, we can infer the likelihood of approval. The latest results mirror those reported at the end the phase I for the same indication, so we should expect a similar mirroring to be enough to form the basis of an NDA (assuming an expedited development process). After that, an NDA acceptance and the accompanying setting of a PDUFA date will translate to strength. For those looking for some collateral exposure, and in turn, some diversification to CAR T as a whole, each of these events will likely also boost the market capitalizations of Juno and Celgene.

Story continues below

XBiotech’s Misfortune Could Be A Discounted Opportunity

By
ME Staff
-
biotech

At the end of November, Texas based biotech XBiotech, Inc. (NASDAQ:XBIT) released an update on an ongoing European phase III for its lead candidate, Xilonix. The trial is investigating the efficacy of Xilonix in the treatment of colorectal cancer. As part of the update, the company reported some inconsistencies in the trial data, when compared to previously released information. As a result, Xbiotech lost 45% of its market capitalization across two sessions, and while it has recovered slightly this week, still remains down close to 40% on its pre-announcement price. This may be, however, an opportunity to get in at a discount. Here’s why.

First up, let’s quickly address the drug in question. Xilonix is what’s called a True Human antibody – a term coined by XBiotech. True Human antibodies differ from Fully Human antibodies (a number of fully human antibodies are already approved in oncology) in that they are created by B-lymphocytes in the human body, rather than though genetic construction in a laboratory. Why is this important? Because when our bodies create antibodies, the antibody and the creator lymphocyte come under extreme scrutiny. If the antibody it has created is ineffective, or if the body rejects the antibody, our immune system induces apoptosis in the creator cell (programed cell death). If the antibodies are functional, our bodies promote the replication of the creator cell. This highly selective process is why our antibodies work, and why our bodies don’t reject them as foreign substances. Fully human antibodies don’t go through this process, and as such, have a weaker safety, efficacy profile than True Human antibodies – or so Xbiotech hypothesizes. Xilonix is a True Human antibody, created in human B Lymphocytes, and replicated in vivo for use as an oncology therapy for, in this instance, colorectal cancer.

And what about the errors in question? Well, the company reported that 25 patients dropped out before receiving treatment, 14 received either placebo or Xilonix in error and 33 completed the study but didn’t undergo the end of study DEXA scan (a bone density X-ray used as one of two primary endpoints), an EORTC evaluation (a conclusion survey, the second primary endpoint) or both. This means that, essentially, 72 patient’s data is unusable. The trial enrolled 276 patients, so 27%. Obviously, this is going to seriously affect the trial’s ability to demonstrate efficacy to the EMA. XBiotech was hoping to submit an NDA to the agency before the end of the year – chances are this will now be delayed as the company decides how to the data corruption. All is not over, however.

The company is running a concurrent phase III in the US, which is on track for completion I the first quarter of 2017. Enrollment is ongoing, and phase II (as well as some promising early indications from this phase III) suggest we will see a positive outcome. If the company can avoid the mishaps of the European trial, and if it can get its NDA to the EMA as scheduled for the European trial, both drugs could hit markets in 2017 (assuming accelerated approval in the US).

Even if the EMA requires a partial re-run of the European trial, it is a 16-month duration trial. Kicking off at the beginning of 2016, XBiotech could tie up the trial before April end 2017. What are we saying here? That essentially, all this amounts to is a delay – and it may not even amount to that, depending on what stance the EMA takes on the 25% fewer participation rate.

XBiotech went public this year, and has a little over $100 million cash on hand, just $4 million debt (and the majorty of that is accounts receivable) and a relatively low burn rate – somewhere in the region of $9 million a quarter based on recent performance. Yes, this burn rate will inflate as the US trial heats up, but even if it doubles the company could still easily make it to the second half of 2017 without having to raise funds; a very stable position in the dev-stage biotech space.

Of course, there is inherent risk. The EMA may take a hard line approach and reprimand XBiotech for allowing the corruption – something that would add cost. Further, Xilonix may not prove effective at all; colorectal cancer is notoriously difficult to treat and True Human antibodies are an entirely new approach.

Risk aside, however, we have a financially stable company with a promising candidate I global phase III trials, that is available today at a 40% discount to the price it traded at a couple of weeks ago. For the aggressive speculator – an intriguing opportunity.

Story continues below

Gold Finds a New Low But Gold Stocks Don’t Confirm

By
Rafi Farber
-
Gold Bug

Gold (NYSEARCA:GLD) broke through the $1050 level morning for the first time this decade, confirming the continuation of a now over 4 year old bear market before bouncing back above $1060. Despite the new low, there is another ray of hope for the bulls: gold stocks have not confirmed the new low.

The mining ETFs remain well above their lows hit in August, with the majors ETF (NYSEARCA:GDX) over 11% above its low of $12.62, and the juniors (NYSEARCA:GDXJ) with a buffer of over 8%. This is especially unique because the metal itself has been down an amazing 27 out of the last 34 days. By comparison, gold miners have only been down 16 of the last 34 days.

That means gold stocks have risen in the face of a falling gold market 9 times in the past 6 weeks.

Another interesting thing happened today, and that is that the S&P 500 (NYSEARCA:SPY), bonds (NYSEARCA:BND) and the dollar index (NYSEARCA:UUP) were all down together while gold and gold stocks were broadly up. The dollar got severely hit by a Mario Draghi QE letdown which sprung the Euro much higher today. As a result the dollar was down over 2%. These kinds of down moves in the dollar are very rare, especially coupled with a sharp fall of nearly 3% in long-dated Treasury bonds (NYSEARCA:TLT).

We are now two weeks away from the Federal Reserve’s next decision on interest rates. Barring a severe stock market crash, the Fed looks set to finally raise its target rate to just a quarter of a percent. Gold’s new low earlier this morning looks to have already priced this rate hike in given the odds of it happening are about 80% as calculated by the interest rate futures market. If and when it actually happens, it is quite possible that gold will actually rally on the news. This is contrary to normal behavior but when everyone expects the opposite, sometimes the market throws these kinds of curve balls.

 

Story continues below

Two Stocks to Watch This Month in Biotech

By
-
stocks

We may be heading into the holiday period, but things aren’t slowing down in biotech. We’ve got a host of PDUFA dates set for before the end of the year, all of which have the potential to inject some real volatility into the space. Here are two biotech stocks to keep an eye on.

Otonomy, Inc. (NASDAQ:OTIC)

Otonomy is one of those stocks that flies under the radar of market awareness. It hasn’t embarked on any noticeable promotional activity (at least not outside of the sector specific side of things) and has just quietly developed its pipeline over the past few years. The company focuses on treating conditions that affect the ear – known as otic disorders in the industry – and has three candidates in its pipeline. The lead candidate, Auripro, is up for an FDA review date of December 25, 2015, with a target indication of middle ear effusion – fluid in the middle ear that causes pain and discomfort (through infection) in children.

The treatment is pretty much just a reformulation of the current SOC treatment, which is antibiotic ear drops, but is designed as a sustained release therapy. This allows a full course of treatment to be administered in one issue, rather than the multi daily issue of the aforementioned drops. In children undergoing tympanostomy tube placement (TTP) surgery (the surgery this condition is associated with), the benefits of not having to repeatedly administer antibiotics are obvious.

The FDA accepted the company’s NDA back in April and – according to the release – Otonomy believes the agency will not convene an advisory panel pre-review. This suggests the FDA regards the review as pretty straightforward, improving chances of approval. The phase III on which the NDA rests demonstrated efficacy (as measured by a primary endpoint of reducing treatment failures versus SOC) and safety across a sample size of 532 children.

So – the date to watch is December 25. If the FDA gives the green light, Otonomy expects to kick off commercialization during Q1 2016. As always, keep an eye on the company’s PRs in the days heading up to PDUFA. Its not unusual for the FDA to put out is guidance a few days, or even weeks, early, and you’ll want to be ready when they do.

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

This is a big one, and one that we will probably look at in a little more detail over the coming weeks – but here’s a primer. BioMarin has spent years developing what – on approval – would be the first FDA approved treatment for duchenne muscular dystrophy (DMD). DMD affects 1 in every 3,500 new borns, and is a fatal condition, meaning any treatment could be a real blockbuster for the company that commercializes it.

The treatment – drisapersen – is what’s called an antisense oligonucleotide. It is a synthesized nuclei acid that binds to the gene that causes DMD, a faulty dystrophin gene, and essentially deactivates it. This deactivation causes the the production of a truncated, but functional, dystrophin gene. DMD comes about as a result in the fault dystrophin gene not creating enough dystrophin protein, which is the protein responsible for muscle structure and stability. By replacing faulty with truncated functional, BioMarin is hoping to improve muscle structure in DMD patients.

It’s not that straightforward, however. The drug missed its primary endpoint in the phase III on which the NDA is based, and all too often this leads to a red light from the FDA. BioMarin has requested the FDA consider the totality of data, which essentially is a request for the FDA to look at all trials, based on the company’s suggestion that the subjects in the phase III were already at an irreparable stage of DMD.

An advisory panel met at the end of last month, and while it didn’t report an overarching recommendation (as requested by the FDA) it did release the votes on certain aspects of the data. You can read them here, but to summarize, they don’t look good. The downside has the majority in each of the four categories surveyed, and there is very little to suggest the panel is behind drisapersen. With this said, there is no DMD treatment available, and the FDA may take the opinion that, as long as the drug is safe (which trials suggest it is) then marginal benefit is enough to give it the greenlight.

Estimates put a 15% upside in BioMarin’s market capitalization on an approval announcement, and a 20-25% downside on a decline. The big day – the PDUFA – is set for December 27.

Story continues below

Today’s Movers and Shakers in Biotech

By
-
biotech

The biotech sector is known for its volatility, particularly across its clinical stage constituents. Trial data dictates market sentiment, which in turn drives market cap. As we know, sentiment can shift quickly. Here are some of the week’s biggest movers so far, alongside an analysis of what initiated the response.

Biotech 1: Zafgen, Inc. (NASDAQ:ZFGN) – DOWN

At the end of last week, Zafgen would have fit comfortably into Market Exclusive’s box of small cap stocks, which we generally define as having a market capitalization of between $250 million and $1 billion. At time of writing, however, the company has fallen out of this bracket, with a current market capitalization of $181 million – a 60% decline on Tuesday’s close price.

Why the decline? Well, the company is trialing its lead pipeline candidate, beloranib, as potential treatment for Prader-Willi syndrome. Prader-Willi is a rare genetic disorder that causes obsessive eating and abnormal, but recognizable, facial features and other growths. The condition also has a learning disability association, with the majority of sufferers having an IQ between 35 and 70 – levels that indicate moderate to mild intellectual disability. There are more than 400,000 PW sufferers globally, and about 1 in 25,000 new borns have the disease in the US, meaning the company that gets an approved cure (there is no cure currently, only symptom therapy) has a real blockbuster on its hands. Unfortunately for Zafgen and its shareholders, beloranib (at least in Zafgen’s formulation) is not that cure.

The FDA put a “temporary” hold on the company’s phase III for PW in October, on the back of an announcement suggesting a patient in the trial had died of unknown causes. Despite the hold, the company continued treating patients in an extension trial, which the FDA did not halt. Zafgen announced this morning that it had learnt yesterday that a patient on this extension trial had died, with COD reported as blood clots in the lungs. Obviously, a death in trial can have serious implications for the fate of the drug in question. A second death pretty much guarantees the trial will be discontinued.

Biotech markets are well aware of this latter fact, and since beloranib forms the basis of the company’s two lead trials (the other is a phase IIb with an obesity indication), chances are Zafgen will not be seeing approval for any of its therapies any time soon. The FDA has not released a statement on the issue as yet, but when the agency reports its opinion, expect further downside.

Biotech 2: OncoGenex Pharmaceuticals, Inc. (NASDAQ:OGXI) – DOWN

This clinical stage biotech is down more than 32% on its Wednesday open. The company is trialing its lead pipeline candidate, custirsen, in a phase III with a metastatic castrate-resistant prostate cancer (CRPC) indication. Late on Tuesday, OncoGenex reported an interim analysis of the trial, which showed that there was no discernible benefit from OS perspective in patients taking custirsenin combination with docetaxel (current SOC), versus patients taking docetaxel on its own. Unlike Zafgen, however, this may be an opportunity to get into OncoGenex at a discount. The results are representative of a small subpopulation of the overall trial, and the company CEO, Scott Cormack, said in a statement that the overall trial remains on track to show statistical significance. Obviously, it is very much in a CEOs interests to suggest efficacy, but if he is right, the interim analysis will be moot. The drug has already proven safe in a final safety analysis, and could be a hit for OncoGenex if approved.

From a timeframe perspective, complete results are on track for release during the second half of next year. The endpoint is as aforementioned, more specifically an 85% power survival benefit, so keep an eye an eye out for the release as a potential upside catalyst. Elsewhere, OncoGenex is trialing the same treatment in NSCLC, and its secondary candidate, apatorsen, in three indications – NSCLC, bladder cancer and prostate cancer.

Having said this, don’t jump in just yet, even if you are looking to pick up the discount. Biotech markets are in selling mode, and there could be a long way to go for OncoGenex before (and if) it recovers.

Story continues below

Roche Just Picked Up A Range Of Potential Billion Dollar Indications

By
-
Roche

On December 1, 2015, Roche Holding AG (OTCMKTS:RHHBY) announced it has picked up a license to develop a VAP-1 inhibitor – a novel clinical stage inflammatory disease candidate currently being developed by UK based, Upsher-Smith subsidiary, Proximagen. Roche already hit headlines yesterday as it backed out of a much hyped collaboration with Polyphor, and so the news comes as a bit of a surprise to wider markets. Overlooking near term reactions, however, the latest deal gives Roche access to a promising candidate with a number of potential billion-dollar indications. As such, let’s take a look at the science behind the therapy, in an attempt to try and gauge its chances of getting an FDA green light, and in turn, the financial implications of commercialization.

First then, what is a VAP-1 inhibitor? VAP stands for vascular adhesion protein, which is a common synonym for an enzyme called AOC3. The process by which these things work is pretty complicated, but for the purpose of this discussion, let’s just say they are responsible for the oxidation of amines in our body, which are formed when amino acids breakdown into a nitrogen atom and what’s called a lone pair (just meaning two electrons). A lot of the commonly known neurotransmitters are amines – think dopamine, serotonin etc. Anyway, VAP-1 oxidizes two amines called methylamine and aminoacetone to create formaldehyde and methylglyoxal. These latter two substances (called aldehydes, for those interested) induce inflammation, through the recruitment of leukocytes (just another name for white blood cells) to the region in which the oxidation takes place. As the name suggests, VAP-1 inhibits the oxidation process. In doing so, Proximagen hypothesizes, it reduces inflammation and can be used in a variety of inflammatory indications. The exact indication for which Roche will end up carrying Proximagen’s VAP-1 forward remains to be seen; indeed, Roche itself does not yet know. The company has structured the deal in a way that will see both parties try VAP-1 inhibition out in a range of indications (rheumatoid arthritis looks to be a contender) and Roche will assume responsibility for development and commercialization if the tests indicate efficacy.

Staying on this note, what’s in it for Proximagen? Well, as yet, we haven’t got any info on the specifics from a financial perspective. To put forward a reasonable assumption, this is likely because Roche and Proximagen aren’t sure which indication they will carry into phase III, meaning they don’t yet know the size of the market they will be targeting. What we do know, is that both companies will conduct the phase IIs with a view to moving forward into phase III with the most promising candidates. The assumption here, then, is that Roche will fund the trials in return for exclusive choice on which molecules it wants to take forward.

There are also a number of milestone payments earmarked for Proximagen (again, exact details are not yet known) attributed to both the development process and the commercialization phase – if we get that far.

So, what’s next? Well, it’s early days in from a development perspective. Proximagen has only conducted some small scale, pre clinical studies of its VAP-1 candidate, and it will likely be at least Q1 2017 before we see and molecule moved into phase III. Having said this, the Roche collaboration means time to commercialization has probably halved compared to a solely Proximagen-run trial, purely as a result of the economies of scale (and the lack of funding issues) associated with a big pharma partnership. With this in mind, catalysts to look towards as potential upside drivers are interim data relating to the various indications. We have already mentioned one, rheumatoid arthritis, that could be a real blockbuster if efficacy and safety is demonstrated. In light of its potential, any data that infers a candidate is effective in RA therapy would translate to some immediate upside. Other conditions to keep an eye on are any oncologic indication (some cancers are inflammatory in nature) and Crohn’s disease – both of which present minimum billion-dollar annual revenue potential as unlabeled, first line indications (think Johnson & Johnson‘s (NYSE:JNJ) Remicade for Crohn’s).

Story continues below
1...14,61314,61414,615...14,629Page 14,614 of 14,629

EDITOR PICKS

POPULAR POSTS

POPULAR CATEGORY

© Market Exclusive 2019