BioShares Biotechnology Clinical Trials (BBC): $21.60, +$0.17, -25.6% YTD

BioShares Biotechnology Products (BBP): $35.60, +$0.63, +15.5% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were little changed, a day after the S&P 500 ended close to its record high. The dollar scaled to its highest level in almost 14 years against a basket of currencies as U.S. inflation and interest rates are expected to head higher, while gold slipped. The greenback’s rise against the yen raised hopes of an earnings boost to Japanese exporters, lifting Japan’s Nikkei. European shares nudged lower. Oil prices recouped losses, buoyed by renewed hopes that OPEC might agree production cuts.

 

 

MARKET HIGHLIGHTS

 

BioTime announced details of positive data from its Renevia® pivotal trial, reported via a presentation at the 14th annual International Federation for Adipose Therapeutics and Science meeting (IFATS) on Thursday, November 17, in San Diego. The presentation was based on data from the “run-in,” testing sample subjects to the European pivotal trial. Highlights of the presentation included:  Adipose progenitor cells (fat cells) obtained from a liposuction aspirate remained viable and were observed to proliferate when combined with the Renevia hydrogel; The Renevia gel and progenitor cells were successfully administered in the run-in subjects with no serious adverse events; and, 3D-image analysis suggests that the grafts retained volume over the assessment period, and the treating physician-observed incremental volume was retained in select patients who had progressed to the one-year follow-up evaluation.

 

Gemphire Therapeutics will provide a corporate update at the Piper Jaffray conference on Tuesday, November 29th, and the LD Micro Main Event conference on Wednesday, December 7th.

 

Sensorion announced that new preclinical results obtained with SENS-401, the Company’s drug candidate being developed for the treatment of acute sensorineural hearing loss, were presented at the Annual Meeting of the Society for Neuroscience (SfN), Neuroscience 2016, in San Diego, CA, on November 16, 2016.  The data were presented in an abstract entitled, “Significantly improved recovery of severe noise-induced hearing loss by the orally available, clinical drug candidate SENS-401.”

 

Apricus Biosciences announced that it has received feedback in response to its previously announced Type B Meeting request to the FDA. The purpose of the FDA meeting request was to confirm Apricus’ strategy for addressing the deficiencies contained in the 2008 Complete Response letter. Based upon our expert panel’s review of the FDA’s feedback, and the available Vitaros clinical and non-clinical data used to obtain regulatory approvals outside of the U.S., the Company believes that there is a viable regulatory pathway for resubmission of the Vitaros NDA in the U.S. and, as such, we intend to re-submit the NDA as soon as possible in 2017. Specifically, the FDA provided clarity on the requirements needed to address the deficiencies in the 2008 Complete Response letter to include suggested additional analysis of existing clinical and non-clinical data. The FDA feedback did not indicate that new clinical studies would be required for re-submission. Importantly, the FDA determined that Vitaros, under current regulations, is now considered a drug-device combination and, as such, Apricus was advised to meet with the Office of Product Quality to confirm the necessary device engineering and compliance requirements for the NDA re-submission.

 

Spectrum Pharmaceuticals received a Complete Response Letter from the FDA with respect to the Company’s NDA for QAPZOLA (apaziquone for intravesical instillation). On November 15, 2016, the Company met with the FDA to discuss the strategy for further development of QAPZOLA. Based on the discussions, the Company is evaluating a new smaller study that would replace the ongoing Phase III program in which enrollment has been stopped.  

 

On November 14, 2016, OncoGenex Pharmaceuticals committed to a further reduction in the company’s workforce in order to preserve the company’s resources as it determines future strategic plans. The Company will eliminate five positions and estimates that it will incur approximately $750,000 in cash expenditures as a result of the workforce reduction, substantially all of which will be severance costs. The Company expects the workforce reduction to be substantially complete in the fourth quarter of 2016.

 

Novocure announced that a long-term analysis of the full trial cohort from its Phase III pivotal EF-14 trial of Optune in combination with temozolomide for the treatment of newly diagnosed glioblastoma (GBM) confirmed the superior survival results seen at interim analysis. The long-term analysis demonstrated superior two-, three- and four-year survival of patients treated with Optune together with temozolomide compared to temozolomide alone. The interim analysis results – published in the Journal of the American Medical Association (JAMA) 1 in December 2015 – showed significant extension of both progression free and overall survival in newly diagnosed GBM patients receiving Optune with temozolomide compared to temozolomide alone.

 

PharmAkea announced the extension of their strategic collaboration with Celgene which was established to leverage PharmAkea’s proprietary drug discovery platform and novel small-molecule therapies targeting fibrotic diseases. Under the terms of the agreement, Celgene committed $9 million to PharmAkea to extend the collaboration for 9 months. PharmAkea announced the original 3-year collaboration with Celgene in October of 2013.  PharmAkea is currently conducting a Phase I SAD and MAD trial, as well as toxicology studies that will enable Phase II trials on its lead program, a small molecule LOXL2 inhibitor. The Company is also conducting IND-enabling studies in preparation for a Phase I trial on its second program, an Autotaxin inhibitor.

 

Agios Pharmaceuticals announced the first data from the dose expansion cohorts of the Phase I study evaluating single agent AG-120 in isocitrate dehydrogenase-1 (IDH1) mutant positive glioma and chondrosarcoma. The glioma data were presented at the Society for Neuro-Oncology (SNO) Annual Meeting in Scottsdale, AZ and the chondrosarcoma data were presented last week at the annual meeting of the Connective Tissue Oncology Society (CTOS) in Lisbon, Portugal.

 

Mallinckrodt Pharmaceuticals announced results from a clinical pharmacokinetic (PK) study examining the effect of IV morphine on the absorption of orally administered acetaminophen. The company also revealed findings from three retrospective claims-based analyses providing health economic insights on use of IV acetaminophen versus oral acetaminophen for managing post-operative pain in patients undergoing spine surgery, cholecystectomy (removal of the gall bladder) or hysterectomy. Study results will be presented in moderated ePoster sessions at the 15th Annual Pain Medicine Meeting of the American Society of Regional Anesthesiology and Pain Medicine (ASRA) in San Diego.

 

Argos Therapeutics and its partner Cellthera Pharm, a subsidiary of Pharmstandard focused on personalized therapeutics, announced the presentation of data on a murine ("mouse") model developed by Cellthera to determine functional activity of a therapy modeled after Argos’ AGS-003 individualized immunotherapy. The data were presented at the Society for Immunotherapy of Cancer (SITC) 31(st) Annual Meeting, which was held November 11-13 in National Harbor, Maryland. The data presented demonstrated the favorable effects of the AGS-003-like therapy as a single agent and in combination with sunitinib and a PD-1 checkpoint inhibitor in a murine model of renal cell carcinoma (RCC).

 

Athenex announced a new collaboration to conduct a Phase Ib study that will evaluate the safety and tolerability of oraxol, Athenex’s oral form of paclitaxel, in combination with Eli Lilly ‘s CYRAMZA (ramucirumab), a vascular endothelial growth factor (VEGF) Receptor 2 antagonist, in patients with advanced gastric (stomach) and esophageal cancer. Patient enrollment, currently expected to start in 2017, is planned at sites in the U.S. and Asia. Athenex will be the sponsor of the clinical trial and Lilly will supply CYRAMZA.

 

Tenax Therapeutics announced that it has completed patient enrollment for its Phase III LEVO-CTS trial in cardiac surgery. The Company will lock its database after 30-day follow-up from the final patient, and currently expects to report top-line results in January 2017 in conjunction with the study’s lead investigators at Duke Clinical Research Institute (DCRI).

 

BioSpecifics Technologies announced positive, highly statistically significant results from a Phase IIb study of CCH for the treatment of cellulite, or edematous fibrosclerotic panniculopathy. Trial subjects receiving CCH showed statistically significant levels of improvement in the appearance of cellulite with treatment, as measured by the trial’s primary endpoint (p<0.001), compared to those subjects receiving placebo. CCH was well-tolerated in the actively treated subjects with most adverse events being mild to moderate in severity, and primarily limited to the local injection area.

 

Aegerion Pharmaceuticals announced that Japan’s Ministry of Health, Labor & Welfare (MHLW) has approved pricing of JUXTAPID in Japan. The pricing authorization follows Japanese regulatory approval of Juxtapid for the treatment of homozygous familial hypercholesterolemia (HoFH) on September 28, 2016.

 

Applied Genetic Technologies announced the appointment of Michael Goldstein, M.D., M.B.A. as Chief Medical Officer (CMO) effective as of December 1, 2016. Dr. Goldstein will be responsible for leading the company’s clinical trials, providing medical oversight, and contributing to the overall strategic direction of the company. AGTC’s current Vice President and CMO, Jeffrey D. Chulay, M.D., DTM&H, will remain with the company as Executive Director of Clinical Strategy. 

 

Alexion Pharmaceuticals announced that researchers presented new data from an analysis of patients enrolled in the Global atypical Hemolytic Uremic Syndrome (aHUS) Registry, demonstrating that initiation of Soliris (eculizumab) prior to kidney transplant reduces the risk of dialysis post-transplant in    patients with aHUS. Specifically, results showed that starting Soliris prior to transplant reduced the likelihood of dialysis three-fold compared to initiating Soliris post-transplant. There was also a four-fold reduction in chronic dialysis when Soliris was initiated prior to transplant and maintained in accordance with labeled dosing. Further, the need for dialysis increased after transplant if Soliris was discontinued. These data were presented in an oral session at the 2016 annual meeting of the American Society of Nephrology (ASN) in Chicago.

 

PharmAthene announced that its Board of Directors has declared a special one-time cash dividend of $2.91 per share of common stock, payable on February 3, 2017 to holders of record as of January 24, 2017.

 

Neurotrope announced that it entered into a definitive securities purchase agreement with accredited investors to raise approximately $20.2 million in a private placement of common stock and warrants exercisable for common stock. In the private placement, the Company has agreed to sell shares of its common stock at a purchase price of $.20 per share and five-year warrants to purchase an equal number of the Company’s shares of common stock, at an exercise price of $0.40 per share. The private placement is being led by new and existing investors.

 

Motif Bio announced the pricing of its initial public offering in the United States of approximately 2.44 million American Depositary Shares (ADSs) with 50% warrant coverage. Each ADS, representing 20 ordinary shares of Motif, and warrant to purchase 0.5 ADSs are being offered at an offering price to the public of $6.98 per ADS and warrant combination. Motif has granted the underwriters a 30-day option to purchase up to an additional 292,618 ADSs and/or 146,309 warrants to cover over-allotments, if any, in the U.S. offering.  Each full ADS warrant will have a per ADS exercise price of $8.03. The ADS warrants are exercisable immediately and have a term of five years. The ADSs and warrants are scheduled to begin trading on The NASDAQ Capital Market on November 18, 2016 under the symbols "MTFB" and "MTFBW, " respectively.  H.C. Wainwright is acting as the sole book-running manager for the U.S. offering.

 

Spring Bank Pharmaceuticals announced that it has entered into a securities purchase agreement for the sale of approximately $15 million of Spring Bank common stock and warrants in a private placement financing with a select group of accredited investors. The private placement was led by MPM Capital, Oncology Impact Fund with participation by additional new and existing investors.

 

 

ANALYST RECOMMENDATIONS

 

Oppenheimer analyst Jay Olson assumed coverage of Prothena, citing a reallocation of analyst resources.

 

Raymond James analyst Elliot Wilbur initiated coverage of Mallinckrodt with an “outperform” rating and $72 price target, citing pervasive negative sector sentiment compounded by another salvo from short sellers on the company’s flagship asset Acthar afford a compelling entry point into a name with what is one of the more sustainable top- and bottom-line growth trajectories within the specialty pharmaceutical sector.

 

Following Endologix’s news of Nellix being delayed, Stifel analyst Rick Wise decreased his price target to $13 from $16; Oppenheimer analyst Steven Lichtman decreased his price target to $11 from $15; Leerink analyst Ravi Mara decreased his price target to $8 from $11; Piper Jaffray analyst Brooks West decreased his price target to $12 from $15.

 

Janney analyst Debjit Chattopadhyay initiated coverage of Vertex Pharmaceuticals with a “neutral” rating and $98 fair value estimate, citing the company heads into 2017 with multiple value drivers.