Things are relatively quiet right now in the biotechnology sector given that the Thanksgiving period in the US has slowed down the usual flow of fresh information in the space. This doesn’t mean there is nothing to discuss, however, and as we head into a fresh week, there’s a strong chance we’re going to see a quick return to considerable volatility.
With this in mind, here is a look at some of the companies to keep an eye on near-term and what to look for from each.
The first company in focus today is Prescient Therapeutics Ltd (ASX:PTX). This one’s a small Australian biotechnology company that will likely be a new name for many but it’s grabbing headlines already this week on news that the FDA has allowed it to restart a clinical trial that was previously put on hold. The trail is investigating the safety and efficacy of a drug called PTX-200 in patients with breast cancer but, earlier this year, the FDA placed a clinical hold on the investigation when reports hit press that a woman taking the drug had died due to liver failure.
Initial concerns were that this liver failure came about on the back of dosing with the active compound but the company maintained that the death wasn’t due to complications with its own drug but instead was rooted in the fact that the woman was also taking paclitaxel, which is a standard of care chemotherapy asset that is known to affect liver metabolism.
Despite the company’s suggestion that the drug was safe, Prescient was forced to halt a total of three trials, one being the already discussed breast cancer trial and two others – one looking at the drug in acute myeloid leukemia (AML) and the other an investigation into efficacy in ovarian cancer.
Back in September, the FDA allowed the company to resume its AML trial and, as per the latest news, the ovarian cancer trial is now back underway. The breast-cancer trial is yet to resume but, given the latest news, there’s a good chance we will see said resumption at some point near term.
Prescient has picked up a bit of strength on the back of the second resumption but the third and final resumption, when it hits press, will likely be a major upside driver.
The second company in focus today is on the total opposite end of the scale – biotech and healthcare behemoth Novo Nordisk A/S (ADR) (NYSE:NVO).
Novo is trying to get a drug called semaglutide to market as a treatment for patients with type II diabetes the company has spent the last few years collecting what a month into some very robust data supportive of an approval. Back in December last year, Novo submitted a new drug application (NDA) to the FDA seeking approval in its target indication and, while the agency didn’t specify a PDUFA date, markets expect an announcement somewhere in the region of December 5, 2017.
That means we should see some news at some point either this week or next. If it’s approved, semaglutide is expected to be a real revenue generator for Novo so, when the news hits (assuming it’s favorable) there’s a good chance we will see the company’s market capitalization boost on the back the announcement.
So what are the chances of approval?
In short, very good.
An advisory panel met back in October to discuss the drug from a safety and efficacy perspective and the outcome of the meeting was that all panel members voted in favor of approval, with the vote count coming in at 16 to 0.
The FDA doesn’t have to follow the recommendation of its panel, of course, but, more often than not, the agency will make the same decision that the panel did and this points towards a near-term approval for the company in the type II diabetes indication.
Keep in mind that this is a binary event and there is a chance that the FDA will turn down the application for some as yet unknown reason but, given the size of Novo, the risk of a regulatory decline is somewhat mitigated from a percentage points impact perspective as compared to a similar situation in a company with little to no approved assets on its books.