BioShares Biotechnology Clinical Trials (BBC): $21.94, +$0.37, +19.2% YTD

BioShares Biotechnology Products (BBP): $36.84, +$0.40, +12.5% YTD

 

 

MARKET COMMENTARY

 

Following a long holiday weekend, U.S. stock index futures pointed to a lower open as geopolitical tensions dampened investor sentiment. Rising tensions over North Korea pushed gold higher, and kept the safe-haven Japanese currency in demand, nudging the dollar to a five-month low. Shares of Netflix and United Continental Holding will be watched as they are due to report quarterly results after the closing bell. NAHB housing market index, net capital inflows and foreign buying are on the economic calendar. European markets were closed for Easter holidays, while Asian shares closed mixed. Crude oil slid lower on signs that the United States is continuing to add output, largely counteracting strong economic growth in China and OPEC efforts to cut production.

 

 

MARKET HIGHLIGHTS

 

Arena Pharmaceuticals announced three data presentations on etrasimod (APD334) at ASPET 2017 at Experimental Biology (EB).  The conference is taking place April 22-26 at McCormick Place Convention Center in Chicago, IL.  The presentations encompass preclinical data highlighting the potent and selective immunomodulatory effects of etrasimod in inflammatory bowel disease (IBD), including ulcerative colitis (UC).

 

DURECT Corporation announced today that it will present clinical data on DUR-928 at the International Liver Congress 2017 (the 52nd annual meeting of the European Association for the Study of the Liver (EASL)), which will be held April 19-23 in Amsterdam.  The poster presentation will report safety, pharmacokinetics and biomarker data from both cohorts of a Phase 1b study utilizing DUR-928 in patients with nonalcoholic steatohepatitis (NASH).

 

Eli Lilly and Incyte announced that the FDA has issued a CRL for the NDA of the investigational medicine baricitinib, a once-daily oral medication for the treatment of moderate-to-severe rheumatoid arthritis (RA). The letter indicates that the FDA is unable to approve the application in its current form. Specifically, the FDA indicated that additional clinical data are needed to determine the most appropriate doses. The FDA also stated that additional data are necessary to further characterize safety concerns across treatment arms. The companies disagree with the agency’s conclusions. The timing of a resubmission will be based on further discussions with the FDA. Following the news, JP Morgan analyst Cory Kasimov decreased his price target of Incyte to $149 from $155; Piper Jaffray analyst Joshua Schimmer downgraded Incyte to “neutral” from “overweight” and decreased his price target to $124 from $140;Jefferies analyst Brian Abrahams decreased his price target to $148 from $165;SunTrust analyst Peter Lawson decreased his price target to $145 from $160; Barclaysanalyst Geoff Meacham decreased his price target to $180 from $185; BMO analyst Ian Somaiya decreased his price target to $144 from $170; Nomura analyst Christopher Marai decreased his price target to $144 from $148; Morgan Stanley analyst Andrew Berens decreased his price target to $142 from $150; William Blair analyst Katherine Xu decreased her fair value estimate to $169 from $170; Goldman Sachs analyst Salveen Richter decreased her price target to $136 from $149.

 

Cleveland BioLabs announced that the EMA has accepted the company’s pediatric investigation plan (PIP), paving the way for submission of a MAA for entolimod as a medical radiation countermeasure.

 

OncoMed Pharmaceuticals reported top-line results from the company’s randomized 145-patient Phase II PINNACLE clinical trial of tarextumab (anti-Notch2/3, OMP-59R5) in combination with etoposide plus either cisplatin or carboplatin chemotherapy (“chemotherapy”) in previously untreated patients with extensive-stage small cell lung cancer.  Results for the combination of tarextumab plus chemotherapy were undifferentiated from those of chemotherapy plus placebo, and therefore the trial did not meet its primary endpoint of progression-free survival or secondary endpoints of overall survival and biomarkers reflective of Notch pathway gene activation.

 

Genentech, a member of the Roche Group, announced interim results from the Phase III HAVEN 2 study evaluating emicizumab prophylaxis in children less than 12 years of age with hemophilia A and inhibitors to factor VIII. At this interim analysis after a median of 12 weeks of treatment, emicizumab prophylaxis showed a clinically meaningful reduction in the number of bleeds over time. These findings are consistent with results from the Phase III HAVEN 1 study in adults and adolescents (12 years of age or older) with hemophilia A and inhibitors to factor VIII, in which emicizumab prophylaxis showed a statistically significant and clinically meaningful reduction in the number of bleeds over time compared to no prophylaxis, as well as compared to prior prophylaxis with bypassing agents. The most common adverse events with emicizumab in the HAVEN 2 study were injection site reactions and nasopharyngitis (common cold symptoms).

 

Abbott and Alere announced that the companies have agreed to amend the existing terms of their agreement for Abbott’s acquisition of Alere. Under the amended terms, Abbott will pay $51 per common share to acquire Alere, for a new expected equity value of approximately $5.3 billion, reduced from the originally expected equity value of approximately $5.8 billion.

 

CytoDyn announced that its application for Orphan Drug Designation (ODD) was not granted by the Office of Orphan Products Development of the FDA because PRO 140 appears to have the potential to treat more than just the subset of multi-drug resistant HIV patients for which the designation was requested.

 

Bristol-Myers Squibb and Nordic Bioscience announced a collaboration agreement to develop biomarker technology to potentially aid in the diagnosis and monitoring of fibrotic diseases including Non-alcoholic steatohepatitis (NASH).

 

Novocure announced that data from a post hoc analysis of the EF-14 pivotal Phase III clinical trial of Optune in combination with temozolomide for the treatment of newly diagnosed glioblastoma (GBM) have been published in CNS Oncology. The objective of the pre-specified post hoc analysis was to evaluate the efficacy and safety of Optune when added to physician’s best choice second-line treatment after first disease recurrence among patients enrolled in the EF-14 trial. The analysis shows that the median overall survival of patients treated with Optune in combination with physician’s best choice second line chemotherapy increased by 28 percent compared to patients treated with physician’s best choice second line chemotherapy alone from 9.2 months to 11.8 months (HR= 0.70, p= 0.049). Bevacizumab, alone or in combination with chemotherapy, was the most frequently used second-line treatment. The analysis also shows that the median overall survival of patients treated with Optune in combination with bevacizumab increased by 31 percent compared to patients treated with bevacizumab alone from 9.0 months to 11.8 months (HR=0.61, p= 0.043).

 

Nabriva Therapeutics announced that its supervisory board and management board approved the relocation of the holding company of Nabriva AG and its subsidiaries (“Nabriva Group”) from Austria to Ireland. The Redomiciliation Transaction will be effected by the exchange of American depositary shares (“Nabriva AG ADSs”) and shares (the “Exchange Offer”) of Nabriva AG for shares of Nabriva Therapeutics Plc (“Nabriva Ireland”), a newly-formed Irish public limited company, with Nabriva Ireland becoming the publicly-traded parent entity of Nabriva AG. Once the Exchange Offer is completed, the current Austrian publicly-traded parent company, will become a subsidiary of the newly-formed Irish company, and it is expected that Nabriva Ireland will then become the publicly-traded parent company of the Nabriva Group and its subsidiaries with its tax residency in Ireland.

 

Myriad Genetics announced that new data comparing BRCA1 and BRCA2 variant classifications between Myriad Genetics and a commonly used public genetic database was published in the journal The Oncologist.  A key finding was that the public database provided discrepant variant classifications more than 26 percent of the time, which can introduce uncertainty and diminish patient care.

 

Synergy Pharmaceuticals announced that Gary G. Gemignani has been appointed as Executive Vice President and CFO, effective April 17, 2017. Mr. Gemignani replaces Senior Vice President, Finance, Bernard Denoyer, who will assist in the transition process until his retirement on July 1, 2017.

 

CRISPR Therapeutics and Casebia Therapeutics, a joint-venture established by CRISPR Therapeutics and Bayer AG for developing CRISPR-based therapeutics in select disease areas, announced they have signed a collaboration agreement with StrideBio, a US-based company developing novel AAV vectors for in vivo gene delivery applications. Under the terms of the agreement, StrideBio will use its proprietary platform to develop AAV vectors with improved properties such as tissue specificity and reduced susceptibility to immune responses.  CRISPR Therapeutics and Casebia will have an option to exclusively license AAV vectors with desired properties for use in their in vivo gene-editing programs.  StrideBio will receive development funding, milestones and royalties on licensed vectors, and retain certain rights to use the novel AAV vectors for gene therapy applications.

 

AMAG Pharmaceuticals announced that it has submitted a sNDA to the FDA for the Makena subcutaneous auto-injector, a drug-device combination product. The current Makena intramuscular (IM) injection is the only FDA-approved treatment indicated to reduce the risk of preterm birth in women who are pregnant with one baby and who spontaneously delivered one preterm baby in the past.

 

Puma Biotechnology announced that the FDA has scheduled the NDA for neratinib for discussion by the Oncologic Drugs Advisory Committee (ODAC) on May 24, 2017. Neratinib is an investigational therapy for the extended adjuvant treatment of early stage HER2-positive breast cancer that has previously been treated with a trastuzumab containing regimen.

 

AmpliPhi Biosciences announced that the FDA provided positive feedback on the Company’s previously submitted detailed development proposal to commence a Phase II trial with its proprietary bacteriophage cocktail AB-SA01 for the treatment of antibiotic-resistant Staphylococcus aureus (S. aureus) infections in patients with chronic rhinosinusitis (CRS). The FDA’s feedback followed a Type B telephonic meeting held with AmpliPhi on February 21, 2017. In the official minutes from the meeting, the FDA acknowledged that phage therapy is an exciting approach to treatment of multidrug-resistant organisms and expressed a commitment to addressing the unique regulatory challenges that might arise during product development. AmpliPhi also announced that following a review of the status of its internal programs, resources and capabilities, the Company has begun to explore a wide range of strategic alternatives to maximize value for its shareholders. The Company has retained H.C. Wainwright & Co., LLC to advise the Company and its board of directors in this effort.

 

Oncobiologics announced that it has amended its Note and Warrant Purchase Agreement dated December 22, 2016 (the “NWPA”) and issued additional senior secured promissory notes that bear interest at a rate of 5.0% per year and mature on the one-year anniversary of the NWPA (the “Notes”) and 5-year warrants to purchase shares of its common stock at an exercise price of $3.00 per share (the “Warrants”) in connection therewith. Under the amended NWPA, on April 13, 2017 Oncobiologics issued an additional $3.5 million aggregate principal amount of Notes and an additional 1,165,500 Warrants.  Oncobiologics may issue up to $1.5 million of additional Notes and 499,500 Warrants in additional closings over 180 days from the original date of NWPA without approval of holders of the Notes.

 

AmpliPhi Biosciences announced that its board of directors has approved a one-for-ten reverse split of its outstanding common stock and a corresponding, proportional reduction in the number of its authorized shares of common stock, each to become effective pursuant to the filing of articles of amendment to AmpliPhi’s articles of incorporation.

 

 

ANALYST RECOMMENDATIONS

 

Ladenburg Thalmann analyst Christopher James initiated coverage of Bellerophon Therapeutics with a “buy” rating and $4.50 price target, citing Bellerophon is developing and optimizing INOpulse, a second generation, drug-device combination product for the outpatient management of chronic pulmonary diseases.

 

Leerink analyst Geoffrey Porges increased his price target of Vertex to $128 from $115, citing the recent positive phase III tezacaftor results in CF patients with F508del and residual function mutations.

 

HC Wainwright analyst Ed Arce decreased his price target of Cidara Therapeutics to $14 from $18, citing higher guided operating expenses in 2017.

 

BMO analyst Do Kim initiated coverage of Alnylam with an “outperform” rating and $73 price target, citing Alnylam has three late-stage drugs that are significantly de-risked and an additional two with potentially accelerated path to approval.

 

BMO analyst Do Kim initiated coverage of Halozyme with a “market perform” rating and $14 price target, citing valuation support from Halozyme’s ENHANZE platform, with visibility into $7bn of partnered drug sales.

 

BMO analyst Alex Arfaei downgraded Eli Lilly to “underperform” from “market perform” and decreased his price target to $71 from $73, citing the major setback with Bari in the U.S., coupled with ongoing headwinds for the mature franchises (e.g. Humalog), and cautious views on Abemaciclib, make the risk/reward in LLY shares unfavorable.

 

Cantor Fitzgerald analyst William Tanner decreased his price target of TherapeuticsMD to $33 from $34, citing model changes and anticipation the FDA will not approve TX-004 on the May 7 PDUFA date.