BioShares Biotechnology Clinical Trials (BBC): $20.05, +$0.59, -31.0% YTD

BioShares Biotechnology Products (BBP): $30.40, +$0.25, -1.4% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were slightly lower, a day after disappointing results from telecom companies weighed on markets. European shares inched higher, buoyed by a $47 billion tobacco buyout offer by British American Tobacco to Reynolds American and some well-received earning updates from companies including SAP. Asian markets closed mostly lower. The euro came under pressure, after the European Central Bank shot down talk of tapering its easy money stance. Oil prices edged up, supported by signs that physical fuel markets were tightening after two years of ballooning oversupply. Gold edged lower.

 

 

MARKET HIGHLIGHTS

 

The Medicrea Group announced that it has received two unique 510(k) clearances from the U.S. Food and Drug Administration (FDA) for its PASS® XS posterior fixation and LigaPASS® XS band connector components designed to address pediatric spinal deformities in small stature patients.

 

Windtree Therapeutics will host a conference call and webcast (including a slide presentation) at 8:00 a.m. EDT on Tuesday, October 25, 2016 to provide updates on the AEROSURF® phase 2 clinical program and the lung deposition study in non-human primates.

 

TRACON Pharmaceuticals announced today that it has issued inducement awards to two new non-executive employees.

 

CymaBay Therapeutics announced that a late-breaking presentation describing results from a phase 2 proof-of-concept study of MBX-8025 in patients with primary biliary cholangitis (PBC) will be delivered at the Annual Meeting of the American Association for the Study of Liver Diseases (AASLD) in Boston, November 11-15, 2016.  MBX-8025 is an orally administered potent and selective peroxisome proliferator-activated receptor delta (PPAR?) agonist.

 

Alkermes announced positive topline results from FORWARD-5, the third Phase III efficacy study to read out from the FORWARD pivotal program for ALKS 5461, a once-daily, oral investigational medicine with a novel mechanism of action for the adjunctive treatment of major depressive disorder (MDD) in patients with an inadequate response to standard antidepressant therapies. The study met its prespecified primary endpoint showing treatment with ALKS 5461 significantly reduced symptoms of depression in patients with MDD compared to placebo. ALKS 5461 was generally well tolerated. The most common adverse events observed for ALKS 5461 were nausea, dizziness and fatigue. Based on these results, along with the substantial data collected to date on the efficacy and safety of ALKS 5461 for the treatment of MDD, the company plans to request a meeting with the FDA Division of Psychiatric Products to discuss the filing strategy for this Fast Track designated medicine. Following the news, Citi analyst Liav Abraham increased her price target to $62 from $53; Credit Suisse analyst Vamil Divan increased his price target to $70 from $52; Leerink analyst Paul Matteis increased his price target to $70 from $57; Jefferies analyst Biren Amin increased his price target to $70 from $62; JP Morgan analyst Cory Kasimov upgraded the stock to “overweight” from “neutral” and increased his price target to $78 from $51; Goldman Sachs analyst Terence Flynn increased his price target to $48 from $35.

 

PTC Therapeutics announced that its joint development program in Spinal Muscular Atrophy (SMA) with Roche and the SMA Foundation (SMAF) initiated a Phase II study in pediatric and adult Type II/III SMA patients. The study, named SUNFISH, is a two-part study investigating the safety, tolerability and efficacy of RG7916, an oral small molecule survival motor neuron 2 (SMN2) splicing modifier. The first part of the study will evaluate safety and tolerability through escalating doses of RG7916. After dose selection, the study will transition into the pivotal second part evaluating the efficacy of RG7916. Initiation of the pivotal second part of the study is expected to begin in 2017 and will trigger a $20 million milestone payment to PTC from Roche. A similarly designed two-part study to evaluate RG7916 in Type I SMA patients is expected to begin in the coming months. SMA is a rare genetic disorder that results in neuromuscular disability beginning in infancy and is the leading genetic cause of mortality in infants and young children.

 

Amgen announced that a Phase III study evaluating XGEVA (denosumab) versus zoledronic acid met the primary endpoint of non-inferiority in delaying the time to first on-study skeletal-related event (SRE) in patients with multiple myeloma. The secondary endpoints of superiority in delaying time to first SRE and delaying time to first-and-subsequent SRE were not met. The hazard ratio of XGEVA versus zoledronic acid for overall survival was 0.90. Adverse events observed in patients treated with XGEVA were generally consistent with the known safety profile of XGEVA. The most common adverse events (greater than 25 percent) in the XGEVA arm of the study were diarrhea and nausea.

 

Merck announced that the phase III KEYNOTE-045 trial investigating the use of KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, in patients with previously treated advanced urothelial cancer, met the primary endpoint of overall survival (OS). In this trial, KEYTRUDA was superior compared to investigator choice chemotherapy. Based on a pre-specified interim analysis, an independent Data Monitoring Committee (DMC) has recommended that the trial be stopped early.

 

Dermira presented data from its DRM01 Phase IIb clinical trial at the 35(th) Anniversary Fall Clinical Dermatology Conference in Las Vegas. Positive topline results from the DRM01 Phase IIb dose-ranging clinical trial were previously reported in May 2016. The trial evaluated the safety and efficacy of DRM01, a novel, small molecule designed to inhibit sebum production following topical application. The primary endpoints for the trial were absolute changes from baseline in inflammatory and non-inflammatory lesion counts and the proportion of patients achieving at least a two-point improvement from baseline on the five-point Investigator’s Global Assessment (IGA) scale. Each endpoint was assessed by comparison of baseline values with those measured at the end of a 12-week treatment period.

 

CEL-SCI announced following up on its press release issued on September 26, 2016, the company received the Partial Clinical Hold letter from the FDA. CEL-SCI has started working on a response to the FDA and will work diligently with the FDA to seek to have the partial clinical hold lifted.

 

NANOBIOTIX announced that its Asia-Pacific partner, PharmaEngine, has dosed its first patient in a new Phase I/II trial in patients with head and neck cancers patient receiving radiotherapy plus chemotherapy, this October. The trial is evaluating the optimal dose, safety and preliminary efficacy of Nanobiotix’s lead product.

 

Boehringer Ingelheim Pharmaceuticals announced that The American Journal of Pharmacy Benefits (AJPB) published results from a real-world analysis comparing healthcare resource utilization data among nearly 4,000 recently diagnosed non-valvular atrial fibrillation (NVAF) patients newly treated with Pradaxa (dabigatran etexilate mesylate) or warfarin. The analysis shows that patients treated with PRADAXA experienced fewer all-cause annual hospitalizations, emergency room (ER) visits and physician office visits, than those treated with warfarin.

 

Newron Pharmaceuticals S.p.A. and its partners Zambon S.p.A. and US WorldMeds, LLC, announced that the FDA considers the September 2016 re-submission of the U.S. NDA by Newron to be a complete, Class 2 response to FDA’s March 28, 2016 CRL, and has determined the user fee goal date (PDUFA date) to be March 21, 2017.

 

NeuroVive Pharmaceutical AB announced that the license agreement with Arbutus Biopharma has been terminated and all rights to the NVP018 compound have been reverted back to NeuroVive. The agreement, signed in 2014, was related to the development and commercialization of NeuroVive’s compound NVP018 for oral treatment of Hepatitis B viral infection.

 

QIAGEN N.V. announced launch of QIAscout, a novel instrument for isolation of viable single cells from samples to enable cost-efficient, accurate single-cell analysis for next-generation sequencing (NGS), polymerase chain reaction (PCR) and other downstream applications. The QIAscout instrument, the size of a hand-held mobile device, adds to QIAGEN’s Sample to Insight portfolio of solutions for single-cell analysis in research fields such as oncology, immunology, neurobiology and stem-cell biology.

 

Apricus Biosciences announced a reverse stock split of its shares of common stock at a ratio of 1-for-10. The reverse stock split will be effective at 5:00 p.m. Pacific Time on October 21,  2016. As of the open of the market on October 24, 2016, the Company’s common stock will begin trading on a split-adjusted basis.

 

Endo International announced that Suketu Upadhyay, Executive Vice President and Chief Financial Officer, is leaving the Company effective November 22, 2016 to assume a senior-level finance position at a global biopharmaceutical company. Blaise Coleman, Endo’s Senior Vice President of Global Finance Operations, will serve as Interim Chief Financial Officer. The Company will promptly begin a search for a permanent Chief Financial Officer.

 

Alimera Sciences announced that its United Kingdom subsidiary, Alimera Sciences Limited (Limited), has amended its $35 million term loan agreement (the Amendment) with Hercules Capital, Inc. Under the Amendment, Hercules has agreed to provide Limited up to $10 million in additional financing upon the achievement by Alimera and its subsidiaries of certain revenue milestones.

 

ARIAD Pharmaceuticals acknowledged the receipt of a Congressional letter and reaffirmed its commitment to discovering and developing treatments for patients with rare cancers.

 

Targovax presented the scientific rationale for the clinical development of ONCOS-102 in the treatment of malignant mesothelioma at the European Society of Gene and Cell Therapy 2016 in Florence, Italy.

 

Puma Biotechnology announced that the underwriters for its public offering of 3,750,000 shares of its common stock at $40.00 per share have elected to exercise in full their option to purchase up to an additional 562,500 shares of common stock at the public offering price, less the underwriting discounts and commissions. The closing for the additional purchase of 562,500 shares is expected to take place concurrently with the closing for the initial purchase of 3,750,000 shares on October 25, 2016, subject to customary closing conditions. Citigroup and J.P. Morgan are acting as lead book-running managers, Credit Suisse is acting as joint book-running manager and BofA Merrill Lynch is acting as lead manager for the offering. Stifel is acting as co-manager for the offering.

 

Adimmune successfully placed NT$ 1.5 bn (~US$ 48 mn) guaranteed convertible bonds due 2021 (the "Bonds"). This is the largest fund raising event in Taiwan’s healthcare sector in 2016.

 

 

ANALYST RECOMMENDATIONS

 

Bank of America Merrill Lynch analyst Tazeen Ahmad initiated coverage of Avexis with a “buy” rating and $64 price objective, citing recently released Phase I data in the most severe patients showed impressive improvements in motor function and mortality.

 

Stifel analyst Stephen Willey initiated coverage of Xenon Pharmaceuticals with a “buy” rating and $18 price target, citing Xenon has successfully leveraged its Extreme Genetics drug discovery platform.

 

Barclays analyst Geoff Meacham assumed coverage of the SMid-cap oncology subsector including: Advaxis with an “overweight” rating and $20 price target; ARIAD Pharmaceuticals with an “underweight” rating and $9 price target; Seattle Genetics with an “overweight” rating and $53 price target; Acceleron Pharma with an “overweight” rating and $42 price target.

 

Barclays analyst Douglas Tsao assumed coverage of the following companies: Alkermes with an “overweight” rating and $66 price target; Halozyme with an “overweight” rating and $16 price target; Trevena with an “overweight” rating and $15 price target.

 

Barclays discontinued coverage of the following stocks following the departure of Jonathan Eckard: Cerulean Pharmaceuticals, Esperion Therapeutics, Intercept Pharmaceuticals, Ionis Pharmaceuticals, Juno Therapeutics, Kite Pharma, Mirati Therapeutics, and Novocure.

 

HC Wainwright analyst Shaunak Deepak decreased his price target of Rigel Pharmaceuticals to $6 from $7, citing reduced probability of success of fosta.

 

Goldman analyst Stephen Stewart revised his price target of the following companies: Jazz Pharmaceuticals to $186 from $187; Mallinckrodt to $75 from $83.