BioShares Biotechnology Clinical Trials (BBC): $23.33, +$0.41, +26.7% YTD

BioShares Biotechnology Products (BBP): $38.21, +$0.23, +16.7% YTD

 

 

MARKET COMMENTARY

 

U.S. stocks looked set to open higher on Friday after an upbeat monthly jobs report underscored the strength of the U.S. economy and firmed the odds for the first interest rate hike this year. The Labor Department data showed 235,000 jobs were added in the public and private sectors in February, blowing past economists’ average estimate of 190,000 as the construction industry recorded its largest gain in nearly 10 years. Unemployment rate stood at 4.7 percent, while average earnings edged up 0.2 percent.

 

 

MARKET HIGHLIGHTS

 

Prothena Corporation plc announced that clinical data from the Phase 1b multiple ascending dose study of PRX002 in patients with Parkinson`s disease will be highlighted in an oral presentation in the late-breaking therapeutic strategies session at the 13th International Conference on Alzheimer`s and Parkinson`s Diseases (AD/PD), to be held March 29 – April 2, in Vienna, Austria. PRX002, also known as RG7935, is a monoclonal antibody for the potential treatment of Parkinson`s disease and other related synucleinopathies, and is the focus of a worldwide collaboration between Prothena and Roche. A Phase 2 clinical study of PRX002/RG7935 in patients with Parkinson`s disease is expected to begin in 2017.

 

BioLife Solutions reported operational highlights and financial results for the fourth quarter and full year of 2016.  Net loss attributable to BioLife was $3.3 million for the fourth quarter of 2016, and included a one-time, non-cash loss on deconsolidation charge of $2.8 million related to the company’s restructuring of its biologistex joint venture. Excluding this charge, the net loss attributable to BioLife for the fourth quarter was $0.5 million compared to $1.1 million in Q4 2015. Net loss attributable to BioLife for 2016 was $6.9 compared to $4.2 million in 2015. Excluding the one-time, non-cash loss on deconsolidation, net loss for 2016 was $4.1 million vs. $4.2 million in 2015.

 

STRATA Skin Sciences reported financial results for the quarter and year ended December 31, 2016.  Net loss for the year 2016 was $3.3 million or ($0.75) per diluted share, which included other income of $5.4 million for the change in fair value of warrant liability, $4.9 million in interest expense, $6.4 million in depreciation and amortization expenses and $0.3 million for income tax expense. This compares with a net loss in 2015 of $27.9 million or ($3.27) per diluted share, which included a deemed dividend of $3.0 million, other income of $1.8 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $10.2 million in interest expense, $0.5 million in acquisition costs and $4.0 million in depreciation and amortization expenses.  As of December 31, 2016 the Company had cash, cash equivalents and short-term investments of $3.9 million, compared with $3.3 million as of December 31, 2015.

 

Zogenix announced financial results for the fourth quarter and year ended December 31, 2016.  Total net loss for the year ended December 31, 2016, was $69.7 million, or $2.81 per share, compared with net income of $26.1 million, or $1.22 per share, in the year ended December 31, 2015, which included the net gain on the sale of the Zohydro ER business.  As of December 31, 2016, the Company had cash and cash equivalents totaling $91.6 million, as compared to $155.3 million as of December 31, 2015.  Zogenix believes it has sufficient funds to support operations into the first half of 2018.

 

TxCell SA announced its financial results for 2016. Cash and cash equivalents of €3.5 million as of December 31, 2016 (compared to €9.2 million as of December 31, 2015), excluding proceeds from the February 2017 capital increase (€11.1 million gross proceeds).  Full-year net loss of €13.6 million (compared to €11.3 million in 2015).

 

Gemphire Therapeutics announced that it has entered into a securities purchase agreement for a private placement with a select group of accredited investors. The private placement will consist of 1,324,256 units sold at a price of $9.47 per unit for gross proceeds of approximately $12.5 million. Each unit consists of one share of Gemphire’s common stock and a warrant to purchase 0.75 shares of Gemphire’s common stock. The warrants have an exercise price of $10.40 per share and will be exercisable for a period of five years from the date of issuance. The private placement is expected to close on or about March 15, 2017 and is subject to the satisfaction of customary closing conditions.

 

Palatin Technologies will be presenting at the 29th Annual ROTH Conference on Tuesday, March 14, 2017, at 11:00 a.m. Pacific Time.

 

Endocyte announced their plan to collaborate with Seattle Children’s Research Institute and Dr. Michael Jensen for the development of Endocyte’s SMDC platform in the chimeric antigen receptor T-cell (CAR T-cell) immunotherapy setting through the use of Endocyte’s proprietary SMDC bi-specific adaptor molecules.

 

BeiGene announced the dosing of the first patient in a pivotal clinical trial of BGB-3111, an investigational Bruton’s Tyrosine Kinase (BTK) inhibitor, in Chinese patients with relapsed or refractory chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL). BGB-3111 is also currently being evaluated in a pivotal Phase II clinical trial in Chinese patients with relapsed or refractory mantle cell lymphoma (MCL) and a global Phase III clinical trial in comparison with ibrutinib for the treatment of patients with Waldenström’s Macroglobulinemia.

 

Galapagos announced two new Phase II studies investigating filgotinib in small bowel Crohn’s disease as well as in fistulizing Crohn’s disease. These studies are being led by filgotinib collaboration partner Gilead Sciences. The first additional Crohn’s disease Phase II study is a multi-center, randomized, double-blind, placebo-controlled study to assess the safety and efficacy of the investigational selective JAK1 inhibitor filgotinib in adult patients with small bowel Crohn’s disease. Approximately 100 patients in North America and Europe are planned to be randomized in the study to receive one of two doses of filgotinib or placebo, administered for 24 weeks. The primary objective will be to compare filgotinib to placebo in establishing clinical remission, defined as CDAI<150, in patients with small bowel Crohn’s disease at week 24.

 

Novogen Limited announced changes to the company’s senior management which support the transformation of Novogen from a discovery research organisation to one focused on clinical development, with GDC-0084 preparing for phase II and Cantrixil now in phase I trials.

 

Alkermes announced in an 8-K that the United States Patent and Trademark Office Patent Trials and Appeal Board upheld the claims challenged via the inter partes review process of U.S. Patent Nos. 8,663,685, 8,440,703, 8,354,437 and 8,007,826 (the “IPR Proceeding”), which are Orange Book-listed patents for AMPYRA (dalfampridine) Extended Release Tablets, 10 mg. These patents, as well as U.S. Patent No. 5,540,938, which was not involved in the IPR Proceeding and is also an AMPYRA Orange Book-listed patent, have also been challenged in the U.S. District Court for the District of Delaware. The Court has completed the trial of the case, but not yet issued its decision.

 

Intec Pharma announced that it has entered into agreements with several investors for the private placement of 2,289,638 ordinary shares of the Company, at a price of $4.40 per share, for gross proceeds of approximately $10 million. The chairman of the board of directors, Mr. John Kozarich, and two other directors of Intec, Messrs. Zvika Joseph and Giora Carni, have participated in the private placement.

 

Merck announced the release of two advanced Fertility Technologies products for improved efficiency in the assisted reproductive treatment (ART) lab, Eeva Test 3.0 and Geri humidified incubation. These first-in-class technologies will provide embryologists with in-depth information and control over the environment in which the embryo grows to support healthy embryo development and assessment.

 

Valeant Pharmaceuticals International announced that it has increased the maximum aggregate principal amount of its outstanding 6.75% Senior Notes Due 2018 (the "Notes") that it may purchase pursuant to its previously announced offer to purchase for cash upon terms and subject to the conditions set forth in the Offer to Purchase, dated March 7, 2017, as supplemented by this release, and a related Letter of Transmittal. The Company announced that it has increased the maximum aggregate principal amount of Notes that may be purchased pursuant to the tender offer from $600,000,000 to $1,100,000,000. All other terms and conditions of the tender offer will remain the same.

 

Valeant Pharmaceuticals International announced that it has priced its previously announced offering of $1.25 billion aggregate principal amount of 6.50% senior secured notes due 2022 (the "2022 Notes") and $2 billion aggregate principal amount of 7.00% senior secured notes due 2024 (the "2024 Notes" and, together with the 2022 Notes, the "Notes"). The aggregate size of the offering reflects an increase of $750 million from the previously announced offering size. The offering is expected to close on or about March 21, 2017. The offering of Notes is being conducted in connection with the Company’s previously announced refinancing and amendment of its existing credit agreement (the "Refinancing"). The net proceeds of the offering together with the proceeds from a new term loan in connection with the Refinancing are expected to be used to repay certain loans outstanding under the Company’s credit facilities and to repurchase $1.1 billion principal amount of the Company’s outstanding 6.75% Senior Notes due 2018 (the "2018 Notes"), including through the previously announced tender offer for the Company’s 2018 Notes (the "Tender Offer"). The Company anticipates that it will pay down $350 million of revolving credit facility borrowings under the Company’s credit facilities with proceeds of this offering and cash on hand.

 

Tris Pharma announced that it has appointed Paul Rogers as its new Chief Commercial Officer to lead Tris’ brand business.

 

Mylan announced the U.S. launch of Desvenlafaxine Extended-release Tablets, 50 mg and 100 mg, a generic version of Pfizer’s Pristiq Tablets. Mylan received final approval from the FDA for its ANDA for this product, which is indicated for the treatment of major depressive disorder.

 

BioCryst Pharmaceuticals announced the pricing of an underwritten public offering of 5,294,118 shares of its common stock, offered at a price to the public of $8.50 per share.  The gross proceeds from this offering to BioCryst are expected to be $45.0 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by BioCryst.  BioCryst has granted the underwriters a 30-day option to purchase up to an additional 794,117 shares of its common stock.  The offering is expected to close on or about March 15, 2017, subject to customary closing conditions. BioCryst expects to use the net proceeds of this offering for general corporate purposes, including future clinical development of BCX7353, continued development of its second generation HAE compounds, including for other indications, and the advancement of its other preclinical rare disease programs. J.P. Morgan Securities LLC is acting as sole book-running manager for the offering. Piper Jaffray & Co. is acting as lead manager and JMP Securities LLC is acting as co-manager for the offering.

 

Fibrocell Science announced that it will effect a one-for-three reverse stock split of its common stock at 5:00 pm ET today.  Beginning with the opening of trading on March 13, 2017, the Company’s common stock will trade on the NASDAQ Capital Market on a split-adjusted basis under a new CUSIP number 315721308.

 

 

ANALYST RECOMMENDATIONS

 

Citi analyst Yigal Nochomovitz downgraded Loxo Oncology to “neutral” from “buy” and decreased his price target to $45 from $49, citing management is executing business plan very well but stock now fairly valued.

 

Goldman analyst Salveen Richter downgraded Ionis to “sell” from “neutral” and decreased her price target to $25 from $28, citing IONS is an early pioneer of antisense RNA therapies and while the technology has the potential to address “undruggable” targets in broad therapeutic areas, a lackluster track record of developing successful drugs along with platform toxicity indicates a “show me” story.  

 

SunTrust analyst Yatin Suneja upgraded Sierra Oncology to “buy” from “hold,” citing the company’s lead candidate SRA737 (an oral Chk1 inhibitor) has produced favorable preclinical data, in-line with other clinical candidates targeting similar pathway(s), and could have wide applicability across multiple tumor types.

 

Following BluePrint Medicines’ earnings, Canaccord analyst Arlinda Lee increased her price target to $40 from $35; Raymond James analyst Christopher Raymond increased his price target to $41 from $34.

 

Goldman analyst Jami Rubin added Abbvie to the “Conviction List” and increased her price target to $80 from $74, citing investors continue to underappreciate the substantial cash flow generation from Humira over the next five years (~$60bn on a cumulative basis) and the company’s diversified late stage pipeline.

 

Following Epizyme’s earnings, Leerink analyst Geoffrey Porges increased his price target to $31 from $24.

 

BMO analyst M. Ian Somaiya upgraded Tetraphase Pharmaceuticals to “outperform” from “market perform” and increased his price target to $10 from $6, citing as the analyst view the update on cUTI, in particular IV to oral step-down, a near free call option for investors.