BioShares Biotechnology Clinical Trials (BBC): $20.19, +$0.14, -30.5% YTD

BioShares Biotechnology Products (BBP): $30.59, -$0.13, -0.7% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were mostly flat as attention turned to U.S. payrolls data, expected later this week, for further clues on the pace of rate hikes by the Federal Reserve. A busy economic calendar comprises consumer confidence data, CaseShiller’s housing price index, Texas services sector outlook and the Dallas Fed services revenue figures. European markets advanced and Asian shares closed higher. The dollar held firm while gold edged lower. Oil futures rose supported by production suspensions in the U.S. Gulf due to an expected tropical storm and speculation that producers meeting in Algeria next month will act to prop up prices.

 

 

MARKET HIGHLIGHTS

 

Alcobra announced financial results for the three and six months ended June 30, 2016.  General and administrative expenses in the second quarter 2016 were $1.4 million, compared with $1.2 million in the second quarter 2015.  Cash, marketable securities, and deposits totaled $61.1 million at June 30, 2016, compared with $65.2 million at March 31, 2016 and $69.7 million at the end of 2015.

 

Kamada announced positive top-line results, meeting the primary endpoint of the Company’s U.S. Phase 2 clinical trial of its proprietary inhaled Alpha-1 Antitrypsin (AAT) therapy for the treatment of Alpha-1 Antitrypsin Deficiency (AATD). AATD is an orphan disease currently treated by intravenous AAT augmentation therapy. The U.S. Phase 2 clinical trial was a double-blind, placebo-controlled study evaluating the safety and efficacy of AAT by inhalation in 36 AATD patients. Patients were treated with Kamada’s AAT for inhalation (80 mg/day or 160 mg/day) or placebo via the eFlow® device for 12 weeks during the double-blind period.  Primary efficacy measures included antigenic AAT levels and Anti-Neutrophil Elastase inhibitory (ANEC) levels in the lung as well as additional anti-proteolitic and anti-inflammatory biomarkers. Following this double-blind period, eligible patients (total of 26) entered an additional 12-week open-label extension study with the active drug (160mg/day) to further assess safety and tolerability.  AATD patients treated with Kamada’s inhaled AAT demonstrated a significant increase in endothelial lining fluid (ELF) AAT antigenic level compared to the placebo group [median increase 4551 nM, p-value<0.0005 (80 mg/day, n=12), and 13454 nM, p-value<0.002 (160mg/day, n=12)]. These results are more than twice the increase of ELF antigenic AAT level (+2600 nM) observed in Kamada’s previously completed intravenous (IV) AAT pivotal study (60mg/kg/week). Antigenic AAT represents the total amount of AAT in the lung, both active and inactive.

 

Santhera Pharmaceuticals announced that the Office of Orphan Products Development at the US Food and Drug Administration granted Santhera an award of USD 246,000 in support of its ongoing Phase I trial with omigapil (CALLISTO) in patients with congenital muscular dystrophy (CMD).  Santhera is conducting CALLISTO in collaboration with the US National Institutes of Health. The FDA awards grants through the Orphan Products Grants Program to support the clinical development of products for use in rare diseases where no current therapy exists.

 

Orexigen Therapeutics announced that Valeant Canada, a subsidiary of Valeant Pharmaceuticals International or its affiliates, will commercialize Contrave (naltrexone HCl / bupropion HCl extended release) in Canada. Under the terms of the agreement between Valeant and Orexigen’s wholly owned subsidiary Orexigen Therapeutics Ireland Ltd., Valeant will be responsible for obtaining Canadian regulatory approval and for all commercialization activity and expenses. Orexigen will supply Contrave tablets to Valeant Canada or its affiliates for an agreed transfer price and certain potential regulatory and sales milestone payments. Orexigen expects Valeant to file with Health Canada for regulatory approval by January 2017.

 

Rigel Pharmaceuticals announced that fostamatinib, its oral spleen tyrosine kinase (SYK) inhibitor, met the primary endpoint in the first of two double-blind studies in the FIT Phase III clinical program for the treatment of adult chronic/persistent immune thrombocytopenia (ITP). The study (n=76) showed that 18% of patients receiving fostamatinib achieved a stable platelet response compared to none receiving a placebo control (p=0.0261). A stable platelet response was defined as achieving greater than 50,000 platelets per uL of blood on at least four of the last six scheduled visits between weeks 14 and 24 of treatment. The results from the second FIT Phase III study are expected in October/November 2016. The most frequent adverse events were gastrointestinal-related, and the safety profile of the product was consistent with prior clinical experience, and no new or unusual safety issues were discovered. Following Rigel Pharmaceuticals’ report of positive results from the first of 2 identical Phase 3 studies of fostamatinib in ITP, BMO analyst Do Kim increased his price target to $6 from $4; Piper Jaffray analyst Joshua Schimmer increased his price target to $11 from $10.

 

Array BioPharma announced results from a Phase II study of ARRY-797, an oral, selective p38 mitogen-activated protein kinase inhibitor, in patients with lamin A/C-related dilated cardiomyopathy (LMNA-related DCM), a rare, degenerative cardiovascular disease caused by mutations in the LMNA gene and characterized by poor prognosis.  The trial results were presented at the European Society of Cardiology Congress 2016 in Rome, Italy. The results demonstrated an absolute mean change from baseline of 69 meters on the six-minute walk test (6MWT) at week 12, the study’s primary endpoint (baseline 6MWT ranged from 246 to 412 meters).  This magnitude of improvement exceeded historical benchmarks for 6MWT that have served as the basis for recent approvals of other drugs in other rare diseases.  ARRY-797 administration also resulted in sustained improvements in N-terminal pro-brain natriuretic peptide (NT-proBNP), functional capacity and cardiac function through 48 weeks in LMNA-related DCM patients. Patients who rolled over to a continuing treatment protocol maintained improvements in the 6MWT and NT-proBNP levels through 72 weeks of treatment.  Other secondary endpoints measured including echocardiographic measures of left and right ventricular function and patient-reported outcomes using the Kansas City Cardiomyopathy Questionnaire (KCCQ), both mirrored the favorable improvements seen with the 6MWT.

 

Portola Pharmaceuticals announced interim results from the ongoing Phase IIIb/IV ANNEXA-4 study of AndexXa (andexanet alfa), a Factor Xa inhibitor antidote. In this study of patients with Factor Xa inhibitor-associated acute major bleeding, a preliminary analysis of interim data from 67 patients (of whom 47 were evaluated for efficacy) showed that AndexXa rapidly and substantially reversed anti-Factor Xa activity (the anticoagulant mechanism of these drugs) when administered as a bolus, and sustained this reversal when followed by a 120-minute infusion. Additionally, 79 percent of these patients achieved excellent or good hemostasis (stoppage of bleeding) over a 12-hour period following infusion. These interim results were presented orally today in a Late-Breaking Science Hot Line session at the European Society of Cardiology (ESC) 2016 Congress in Rome. The interim results were published simultaneously online by The New England Journal of Medicine (NEJM).

 

Biocept announced a preferred provider agreement with Teneovita Medical, a division of Teneovita Medical Innovations. Under the agreement, Teneovita will market and distribute Biocept’s Target Selector liquid biopsy testing services to major cancer hospitals, individual oncology practices, and integrative oncology centers.

 

Sage Therapeutics announced the publication of a study conducted with collaborators from Massachusetts General Hospital (MGH) on the epidemiology of super-refractory status epilepticus (SRSE). The paper, titled "Burden of illness for super-refractory status epilepticus," was recently published in the Journal of Medical Economics (doi: 10.1080/13696998.2016.1223680).

 

Compugen disclosed that its LINKS computational platform, initially designed for the characterization and differentiation of existing novel drug target candidates, has been enhanced to include the in silico discovery of new immuno-oncology drug targets, with a specific focus on the discovery of myeloid targets within the tumor microenvironment (TME). LINKS now allows the Company to broaden its existing repertoire of immune checkpoint targets, which already includes a few myeloid targets, predicted by algorithms and methodologies previously developed by the Company. The myeloid targets, now being experimentally validated by the Company, have the potential to transform cancer treatment in patients that are non-responsive to treatments with current checkpoint inhibitors.

 

Boehringer Ingelheim Pharmaceuticals and Qualcomm through its subsidiary, Qualcomm Life, announced a new collaboration to develop a connectivity solution for the RESPIMAT inhaler, the platform inhaler for the Boehringer Ingelheim family of respiratory therapies, to help improve COPD treatment outcomes.

 

ARIAD Pharmaceuticals announced it has completed the rolling submission of the NDA for its investigational anaplastic lymphoma kinase (ALK) inhibitor, brigatinib, to the FDA. ARIAD is seeking U.S. marketing approval of brigatinib for patients with metastatic ALK-positive (ALK+) non-small cell lung cancer (NSCLC) who are resistant or intolerant to crizotinib. The Company is seeking accelerated approval for brigatinib from the FDA and has requested a priority review of the application, which, if granted, would allow for approval of brigatinib eight months after the NDA submission, as opposed to 12 months for a standard review.

 

Impax Laboratories provided an update and additional information to patients, physicians and customers on its epinephrine injection, USP auto-injector, 0.15 mg and 0.3 mg., the authorized generic of Adrenaclick.

 

OncoMed Pharmaceuticals announced the completion of patient enrollment in the Phase II "PINNACLE" clinical trial of tarextumab (anti-Notch2/3, OMP-59R5) for the treatment of small cell lung cancer (SCLC). The PINNACLE study enrolled 145 patients with extensive-stage SCLC who had not received prior treatment. Topline data from the Phase II trial are expected to be reported at the end of 2016 or in early 2017.

 

Ampio Pharmaceuticals announced publication in the peer-reviewed journal Biochemistry and Biophysics Reports that further describes the modes of action (MOA) of Ampion in the treatment of Osteoarthritis.

 

CSL Behring announced that the FDA has accepted for review the company’s BLA for its low-volume subcutaneous (SC) C1-Esterase Inhibitor (C1-INH) Human replacement therapy, CSL830, as prophylaxis to prevent Hereditary Angioedema (HAE) attacks. HAE is a rare genetic disorder caused by a deficiency of C1-INH, one of the proteins that work with the body’s immune system to control inflammation. Symptoms of HAE include episodes of swelling in the face, abdomen, larynx and extremities and can be fatal if untreated.

 

Reuters reported that Mylan has hired banks for a euro-denominated multi-tranche debut euro bond, a day after the under-fire drugmaker announced it would launch a generic version of its EpiPen allergy injection at half the price. The company has mandated Deutsche Bank, Citigroup, ING and JP Morgan to host a series of investor meetings in Europe from September 7-9.

 

Oragenics announced that it has received feedback from the FDA in response to the company’s request for a Type C meeting, concerning Phase II study protocols for the Company’s OM therapeutic candidate, AG013. As part of the clinical protocol for the study, Oragenics expects to file the IND update in late 2016 and initiate the study with AG013 in the United States and Europe during early 2017.

 

Spotlight Innovation announced that Prof. Hengli Tang has co-authored a study, published in Nature Medicine on August 29, 2016, reporting two classes of compounds: one that protects Zika virus-infected neural cells from programmed cell death ("apoptosis") and another that directly inhibits Zika virus replication. According to the study, when used in combination, compounds from the two classes enhanced the neuroprotective effect.

 

Mitsubishi Tanabe Pharma announced that the FDA has accepted the company’s NDA for edaravone (MCI-186) an intravenous treatment for amyotrophic lateral sclerosis (ALS), a rapidly progressive neurological disease. A decision on the application is anticipated on June 16, 2017 based on the PDUFA. If approved, the medicine will be commercialized, under the brand name RADICAVA, through the newly-formed MT Pharma America.

 

Daiichi Sankyo Europe GmbH announced results from the global phase IIIb ENSURE-AF study of 2,199 patients with non-valvular atrial fibrillation (NVAF) undergoing electrical cardioversion (low-energy shocks to trigger normal heart rhythm). The study demonstrated that oral, once-daily edoxaban (known by the brand name LIXIANA outside the US and SAVAYSA in the US) met the study’s primary endpoints, demonstrating comparable efficacy and safety to well-managed enoxaparin/warfarin (mean time in therapeutic range on warfarin was 70.8%) for the prevention of stroke and other blood clot complications. Results from ENSURE-AF were presented during a Hot Line session and late-breaking oral presentation at ESC Congress 2016 in Rome, and published online in The Lancet.

 

Oculus Innovative Sciences announced the commercial launch into the U.S. dermatology market of the company’s newest dermatology product, Lasercyn. Under the supervision of a healthcare professional, Lasercyn is intended for the management of post-non-ablative laser therapy procedures, post-microdermabrasion therapy and following superficial chemical peels. Lasercyn may also be used to relieve itch and pain from minor skin irritations, lacerations, abrasions and minor burns.

 

Innovus Pharmaceuticals announced the launch of its brain health supplement, RecalMax, in the U.S. An estimated 12 million people suffer from neurodegenerative diseases such as Alzheimer’s, for which the use of RecalMax may help, in the U.S., Europe, and Japan. That represents an estimated market of more than $3 billion per year.

 

Syros Pharmaceuticals announced that research from its scientific founders validates CDK12 and CDK13, members of the transcriptional cyclin-dependent kinase family that play a critical role in regulating gene expression, as promising new drug targets for a range of aggressive and difficult-to-treat cancers. These findings were possible as a result of the discovery of a highly selective CDK12 and CDK13 inhibitor by Syros’ scientific founders and underscore the potential of Syros’ pioneering approach for understanding and drugging transcriptional targets to advance a new wave of medicines that control the expression of disease-driving genes. The research from Nathanael Gray’s lab at Dana-Farber Cancer Institute and Richard Young’s lab at the Whitehead Institute for Biomedical Research, which was published online in the peer-reviewed scientific journal Nature Chemical Biology (Zhang T., et al., “Covalent targeting of remote cysteine residues to develop CDK12 and CDK13 inhibitors”), shows that inhibiting CDK12 and CDK13 with a small molecule selectively decreases the expression of DNA damage response genes and super-enhancer associated transcription factors implicated in cancer, including acute leukemia and breast and ovarian cancers. The results suggest that a selective CDK12 and CDK13 inhibitor could be effective as a monotherapy in certain cancers and as a combination therapy in other cancers by increasing their susceptibility to targeted therapies involved in DNA damage repair such as PARP1 inhibitors.

 

Neurocrine Biosciences announced that it has submitted a NDA to the FDA for once-daily dosing of valbenazine in treating tardive dyskinesia. The NDA for valbenazine includes the results from the Kinect 2 and Kinect 3 clinical trials which evaluated over 330 tardive dyskinesia patients. Data from these studies along with the results from another 18 clinical trials, extensive preclinical testing and drug manufacturing data were included in the NDA submission. The Company expects to receive notification of the acceptance of the NDA, as well as the timeframe for NDA review from the FDA in October 2016.

 

Albany Molecular Research announced a restructuring plan with respect to certain operations in the U.S and Europe, in connection with its previously announced acquisition of Prime European Therapeuticals S.p.A – Euticals. Under the restructuring plan, the Company expects that it will incur certain one-time cash and non-cash charges related to a reduction in force and other transition activities between $5.7 and $7.3 million. This includes non-cash fixed asset impairment charges of approximately $0.06 million relating to the closure of a Euticals site and non-cash share-based compensation modification charges of approximately $0.16 million. Cash charges will consist of $5.5 – $7.1 million of employee and other related costs and will primarily be paid during the second half of 2016. The Company expects the majority of these charges to be recorded in the second half of 2016.

 

Alexion Pharmaceuticals announced that the EC has granted orphan drug designation (ODD) to ALXN1007, a novel anti-inflammatory monoclonal antibody targeting complement protein C5a, for the treatment of graft-versus-host disease (GVHD). Alexion is currently investigating ALXN1007 in patients with acute GVHD of the lower gastrointestinal tract (GI-GVHD), a severe and life-threatening rare autoimmune disease that can occur as a complication of stem cell or bone marrow transplantation.

 

 

ANALYST RECOMMENDATIONS

 

JonesTrading analyst George Zavoico initiated coverage of Catalyst Biosciences with a BUY rating and $4.50 Target

 

The following analysts initiated coverage of Gemphire Therapeutics: Jefferies analyst Matthew Andrews with a “buy” rating and $15 price target; RBC analyst Adnan Butt with an “outperform” rating and $25; Canaccord analyst John Newman with a “buy” rating and $17 price target.

 

Piper Jaffray analyst Charles Duncan initiated coverage of Sophiris Bio with an “overweight” rating and $7 price target, citing potential of its lead candidate topsalysin to usher-in a new paradigm in treating localized prostate cancer and BPH.

 

Bank of America analyst Tazeen Ahmad initiated coverage of Tesaro with a “neutral” rating and $97 price objective, citing the company is developing a PARP inhibitor called niraparib for multiple tumor types.

 

Janney analyst Debjit Chattopadhyay initiated coverage of Galapagos with a “buy” rating and fair value estimate of $64, citing Galapagos’ discovery engine has generated differentiated, novel MOA drugs with two programs targeting RA and CF translating into significant licensing deals.

 

Jefferies analyst Brian Abrahams upgraded Karyopharm to “buy” from “hold” and increased his price target to $12 from $7, citing increasing confidence that NT data–particularly from the STORM trial– will support a path forward and potential role for selinexor in the future MM landscape, which presents a significant revenue opportunity.

 

Barclays analyst Jonathan Eckard decreased his price target of Cerulean Pharmaceuticals to $2 from $5, citing the failed Ph2 renal cancer trial for CERU’s most advanced program justifies a pullback in the shares.