BioShares Biotechnology Clinical Trials (BBC): $19.92, +$0.09, +8.2% YTD

BioShares Biotechnology Products (BBP): $35.67, +$0.17, +8.9% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures pointed to a higher open as the focus shifted to the nonfarm payrolls numbers scheduled to release later in the day. Also on the economic calendar are Markit PMI, durable goods, ISM non-manufacturing PMI and total vehicle sales data. Strong corporate results helped the European stocks edge higher, while the day closed mixed in Asia markets. Gold prices slipped as the dollar recovered some lost ground against the euro and yen. Oil edged up on fears that U.S. could issue new sanctions on Iran.

 

 

MARKET HIGHLIGHTS

 

Pernix Therapeutics Holdings provided an update on the Company’s arbitration with GlaxoSmithKline (“GSK”).  Pernix and GSK had been in arbitration regarding claims related to the Treximet asset purchase agreement and supply agreement.  On January 31, 2017, the arbitration tribunal issued opinions in favor of GSK, awarding it damages and fees in the amount of approximately $35 million, plus interest (estimated to be approximately $2 to $5 million).  The tribunal also denied Pernix’s claim that GSK breached its obligations under the supply agreement.  Pernix has already paid to GSK, or into an escrow account, an aggregate of $16.5 million, which will offset the total award.  Pernix is reviewing the opinions, including the amount of interest, and intends to work with GSK to conclude the matter.

 

Palatin Technologies announced the closing of its license agreement with AMAG Pharmaceuticals for exclusive North American rights to develop and commercialize Rekynda™ (bremelanotide), an investigational product designed for on-demand treatment of hypoactive sexual desire disorder (HSDD) in pre-menopausal women.  Palatin received an initial payment of $60,000,000 under the license agreement.

 

Neovacs received a positive data review from the Independent Data and Safety Monitoring Board (IDSMB) that allows the Company to continue the Phase IIb clinical trial with lead product candidate, IFNα Kinoid for the treatment of Lupus.

 

Catalyst Biosciences will present a corporate overview at the 19th Annual BIO CEO & Investor Conference, being held in New York City February 13-14, 2017.

 

After yesterday’s close, Amgen reported 4Q16 non-GAAP EPS of $2.89, which compares to $2.61 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $2.79. Total revenue for 4Q16 was $5.97 billion, which compares to $5.54 billion for the same period a year ago. This compares to a mean estimate of $5.74 billion. Following Amgen’s earnings, BMO analyst Ian Somaiya increased his price target to $202 from $197; Leerink analyst Geoffrey Porges decreased his price target to $163 from $169; Credit Suisse analyst Alethia Young decreased her price target to $178 from $180; Goldman analyst Terence Flynn decreased his price target to $208 from $218; Oppenheimer analyst Leah Rush Cann increased her price target to $175 from $166; Jefferies analyst Eun Yang decreased her price target to $194 from $198; Bernstein analyst Aaron Gal increased his price target to $170 from $160; Morgan Stanley analyst Matthew Harrison increased his price target to $192 from $187.

 

Amgen announced that the FOURIER trial evaluating whether Repatha (evolocumab) reduces the risk of cardiovascular events in patients with clinically evident atherosclerotic cardiovascular disease (ASCVD) met its primary composite endpoint (cardiovascular death, non-fatal myocardial infarction (MI), non-fatal stroke, hospitalization for unstable angina or coronary revascularization) and the key secondary composite endpoint (cardiovascular death, non-fatal MI or non-fatal stroke). No new safety issues were observed.

 

AMAG Pharmaceuticals announced the closing of the licensing agreement with Palatin Technologies for exclusive North American commercial rights to Rekynda (bremelanotide), an investigational product developed for on-demand treatment of hypoactive sexual desire disorder (HSDD) in pre-menopausal women. The agreement was announced on January 9, 2017, and its closing broadens AMAG’s presence in women’s health.

 

Portola Pharmaceuticals announced that it has signed a $150 million royalty agreement with HealthCare Royalty Partners (HCR). Under the terms of the agreement, Portola received $50 million at closing and may receive an additional $100 million upon FDA approval of AndexXa (andexanet alfa) in exchange for a tiered, mid-single-digit royalty based on worldwide sales of the agent. The agreement is subject to a maximum total royalty payment of 195 percent of the $150 million funded by HCR, at which time the agreement would expire.

 

Stemline Therapeutics provided an update on its ongoing pivotal Phase II trial in blastic plasmacytoid dendritic cell neoplasm (BPDCN), using Stemline’s experimental compound, SL-401. BPDCN at present has no approved treatment.

 

Bristol-Myers Squibb announced the FDA has approved Opdivo injection, for intravenous use for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials. The recommended dose for mUC is 240 mg administered as an intravenous infusion over 60 minutes every two weeks until disease progression or unacceptable toxicity. In the CheckMate -275 trial, 19.6% (95% CI: 15.1-24.9; 53/270) of patients responded to treatment with Opdivo. The percentage of patients with a complete response was 2.6% (7/270) and the percentage of patients with a partial response was 17% (46/270). Among responders, the median duration of response was 10.3 months (range: 1.9(+)-12.0(+) months). The median time to response was 1.9 months (range: 1.6-7.2).

 

Merck announced that the FDA has accepted for review two sBLAs for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, in patients with locally advanced or metastatic urothelial cancer, a type of bladder cancer. Specifically, the application for first-line use was accepted and granted Priority Review for the treatment of these patients who are ineligible for cisplatin-containing therapy. The application for second-line use was also accepted and granted Priority Review for these patients with disease progression on or after platinum-containing chemotherapy. The PDUFA, or target action, date for both applications is June 14, 2017.

 

Bionomics Limited announced the completion of the first milestone in its ongoing collaboration with Merck to develop novel candidates for treatment of cognitive dysfunction associated with Alzheimer’s disease. As part of a research collaboration and license agreement announced in June 2014 the first administration of a candidate therapy in a clinical trial triggers a US$10 million milestone payment to Bionomics.

 

bluebird bio announced treatment of the first patient under the amended study protocol in HGB-206, the company’s Phase I study of its LentiGlobin Drug Product in patients with severe sickle cell disease (SCD). This study now incorporates several changes to the study protocol with the goal of increasing production of therapeutic anti-sickling hemoglobin (HbA(T87Q) ).

 

Innovus Pharmaceuticals announced that its partner J&H Co., received approval to commercialize Zestra from the Korean Government. Innovus Pharma announced on November 29, 2016 the signing of an exclusive license and distribution agreement with J&H for the commercialization of Zestra in South Korea. The exclusive ten-year agreement includes a minimum of $2 million per year in sales of Zestra to the Company for a total of $20 million over the life of the ten-year term of the agreement.

 

Bionomics announced the completion of the first milestone in its ongoing collaboration with Merck to develop novel candidates for treatment of cognitive dysfunction associated with Alzheimer’s disease. As part of a research collaboration and license agreement announced in June 2014 the first administration of a candidate therapy in a clinical trial triggers a US$10 million milestone payment to Bionomics.

 

Asterias Biotherapeutics announced the company is extending the expiration date of certain warrants. The decision to extend the warrants takes into consideration Asterias’ recent announcement of positive interim efficacy results from its ongoing SCiStar Phase I/IIa clinical trial that showed additional motor function improvement at 6 months and 9 months following administration of 10 million AST-OPC1 cells in patients with complete cervical spinal cord injuries (AIS-A patients).  Further data will become available in the third quarter of 2017 evaluating 12-month safety and efficacy results for this AIS-A 10 million cell cohort, as well as 6-month efficacy and safety data for the currently-enrolling AIS-A 20 million cell and AIS-B 10 million cell cohorts.

 

Heat Biologics filed a prospectus supplement pursuant to which it may sell shares of its common stock, par value $0.0002 per share, having an aggregate offering price of up to $17,500,000 through FBR Capital Markets & Co. The Company and FBR entered into an At Market Issuance Sales Agreement, dated August 15, 2016 (the “Sales Agreement”) pursuant to which the Company may sell from time to time, at its option, the Shares through FBR, as sales agent. Sales of shares of common stock made pursuant to the Sales Agreement, if any, will be made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-199274) filed with the SEC, the base prospectus, dated October 23, 2014, filed as part of such registration statement and the Prospectus Supplement, dated February 3, 2016, as filed by the Company with the SEC.

 

Auris Medical Holding AG announced that it has added a third clinical-stage development program to its pipeline and is expanding into the field of vestibular disorders. Under the product code AM-125, the Company will develop betahistine dihydrochloride in a spray formulation for the intranasal treatment of Meniere’s disease and vestibular vertigo.

 

Axovant Sciences announced that it has entered into a $55.0 million debt financing agreement with Hercules Capital.

 

Immunovaccine announced Pierre Labbé, CPA, CA, ICD, will join the Company as Chief Financial Officer (CFO), effective February 20, 2017. In this role, Mr. Labbé will be responsible for leading the company’s financial strategy and operations, with an emphasis on expanding financing and business development operations as the Company continues to advance its clinical program and expand its pipeline.

 

Natera announced the appointment of Mike Brophy as Natera’s new CFO, effective February 1, 2017.

 

NxStage Medical announced that Allan Collins, M.D., FACP, a recognized worldwide leader in nephrology, has joined NxStage as Chief Medical Officer to help continue to advance NxStage’s innovative pipeline and to expand patient access to its life-changing therapies.

 

Pfizer announced that it has entered into an accelerated share repurchase agreement with Citibank N.A. to repurchase $5 billion of Pfizer’s common stock. This agreement is part of Pfizer’s existing share repurchase authorization.

 

Neos Therapeutics announced the pricing of an underwritten public offering of 5,000,000 shares of its common stock at a public offering price of $5.00 per share, before underwriting discounts and commissions. In addition, Neos has granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of common stock at the public offering price, less underwriting discounts and commissions. This offering is expected to close on February 8, 2017, subject to customary closing conditions. Cowen and Company and BMO Capital Markets are acting as joint book-running managers and JMP Securities is acting as a lead manager for the offering.

 

 

ANALYST RECOMMENDATIONS

 

Stifel analyst Thomas Shrader initiated coverage of Bioverativ with a “buy” rating and $54 price target, citing the initial offerings of Eloctate and Alprolix are cash cows with reasonable if not explosive growth prospects.

 

Goldman analyst Stephan Stewart revised his price target of the following companies: Endo International decreased to $17 from $19; Impax decreased to $15 from $16; Momenta increased to $18 from $16; Mallinckrodt decreased to $60 from $64; Pacira increased to $44 from $40.

 

Chardan analyst Gbola Amusa downgraded Clovis Oncology to “sell” from “neutral,” citing weak IP and limited indications that suggest over-valuation.

 

JP Morgan analyst Anupam Rama downgraded Array Biopharma to “neutral” from “buy” and increased his price target to $10 from $8, citing model adjustments.

 

Cowen analyst Ritu Baral initiated coverage of Axovant Sciences with an “outperform” rating and $22 price target, citing conviction in AXON’s dementia pipeline.

 

Cowen analyst Ken Cacciatore downgraded AMAG Pharmaceuticals to “market perform” from “outperform” and decreased his price target to $25 from $35, citing concerns that future business development will destroy value.

 

Citi analyst Garen Sarafian downgraded Parexel to “neutral” from “buy” and decreased his price target to $66 from $71, citing nearer term pressures impacting guidance for the remainder of its Fiscal Year elevates the company’s risk profile with longer-term visibility.

 

Leerink analyst Jason Gerberry increased his price target of Ardelyx to $22 from $18, citing higher probability of success for tenapanor heading into the Phase 3 readout in ESRD patients in 1Q’17.