BioShares Biotechnology Clinical Trials (BBC): $20.44, -$0.17, -29.6% YTD

BioShares Biotechnology Products (BBP): $30.78, -$0.17, -0.2% YTD

 

 

MARKET COMMENTARY

 

Wall Street was set to start lower as investors geared up for central bankers’ annual meeting in Jackson Hole later in the week, with Fed Chair Janet Yellen due to speak the following day. Investors
expect the Federal Reserve to give a signal this week that it is gearing up to raise interest rates. Oil prices, another factor weighing on investor sentiment, declined nearly 3 percent as China ramped up exports of refined products. European markets were
in the red while Asian stocks closed mixed. The dollar rose after comments from Fed Vice Chairman Stanley Fischer prompted more bets on a U.S. interest rate hike by the end of this year and gold fell. The National Activity Index for July occupies the day’s
economic calendar.

 

 

MARKET HIGHLIGHTS

 

Medicrea announced that it has completed its previously announced €20 million financing to support further US market penetration of the UNiD™ Patient-Specific Rods and to begin commercializing
the technology in new international markets. The financing consisted of 4 years, 6.75% €15 million Convertible Bonds and €5 million in equity.

 

VBI Vaccines announced that, following a review of safety data from the limited safety immunization period, the Data Safety Monitoring Board has no objection to VBI continuing with the enrollment
of participants across all sites and dose groups in the Phase I clinical study to evaluate its preventative cytomegalovirus vaccine candidate.

 

Achaogen announced that on August 19, 2016, the compensation committee of the Company’s board of directors granted nine new employees options to purchase an aggregate of 55,000 shares of the
Company’s common stock and 27,500 restricted stock units.

 

Zealand Pharma announced that Sanofi has submitted updated information on the pen delivery device for iGlarLixi to the U.S. Food and Drug Administration (FDA) as part of the New Drug Application
(NDA) for the product. IGlarLixi is a once-daily, fixed-ratio combination of lixisenatide (Adlyxin™) and insulin glargine 100 Units/mL (Lantus®) for the treatment of adults with type 2 diabetes. The submission of the additional information, requested by the
FDA, constitutes a Major Amendment to the NDA, resulting in an extension of the Prescription Drug User Fee Act (PDUFA) goal date by three months. A U.S. regulatory decision on iGlarLixi is now expected before the end of November 2016.

 

Pfizer and Medivation announced that they have entered into a definitive merger agreement under which Pfizer will acquire Medivation, a biopharmaceutical company focused on developing
and commercializing small molecules for oncology, for $81.50 a share in cash for a total enterprise value of approximately $14 billion. The Boards of Directors of both companies have unanimously approved the merger, which is expected to be immediately accretive
to Pfizer’s Adjusted Diluted EPS upon closing, approximately $0.05 accretive in the first full year after close with additional accretion and growth anticipated thereafter. Pfizer does not expect the transaction to impact its current 2016 financial guidance.

 

AstraZeneca and
Eli Lilly announced they have received FDA Fast Track designation for the development program in Alzheimer’s disease for AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in Phase III clinical trial. The FDA’s Fast Track programme
is designed to expedite the development and review of new therapies to treat serious conditions and tackle key unmet medical needs.

 

Sanofi announced that it has submitted updated information on the pen delivery device as part of the NDA for the investigational once-daily fixed-ratio combination of basal insulin glargine 100
Units/mL and GLP-1 receptor agonist lixisenatide for the treatment of adults with Type II diabetes. The additional information, submitted at FDA’s request, constitutes a Major Amendment to the NDA, resulting in an extension of the PDUFA goal date by three
months, to November 2016.

 

Pfizer announced that the FDA has approved TROXYCA ER (oxycodone hydrochloride and naltrexone hydrochloride) extended-release capsules, for oral use, CII for the management of pain severe enough
to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. TROXYCA ER has properties that are expected to reduce abuse when crushed and administered by the oral and intranasal routes. However,
abuse of TROXYCA ER by these routes is still possible. It is the only oxycodone with oral abuse-deterrent features described in the labeling.

 

BioPharmX released final findings from its Phase IIa safety study of BPX-01 that show the unique topical gel formulation of minocycline reduced facial P. acnes by more than 90 percent after four
weeks — a statistically significant advantage over the study’s control vehicle. Daily application of BPX-01 resulted in a statistically significant reduction of P. acnes at four weeks compared to baseline. The reduction at four weeks was also statistically
significant between BPX-01 and the vehicle control. No adverse cutaneous effects were observed, no clinically significant hematologic or chemistry alterations occurred, and no minocycline was detected in the plasma at any timepoint.

 

Puma Biotechnology announced that the MAA for neratinib has been validated by the EMA. Validation of the MAA confirms that the submission is complete and starts the EMA’s formal review process.
The potential indication for neratinib is for the extended adjuvant treatment of HER2-positive early stage breast cancer that has previously been treated with trastuzumab (Herceptin)-based adjuvant therapy. The MAA submission is based upon the ExteNET Phase
III study, which reached its primary endpoint whereby neratinib demonstrated a statistically significant reduction of risk of invasive disease recurrence or death versus placebo.

 

Regeneron Pharmaceuticals announced an agreement with the Biomedical Advanced Research and Development Authority (BARDA) of the U.S. Department of Health and Human Services (HHS) to manufacture
and study two antibody therapies for the potential prevention and treatment of Middle East Respiratory Syndrome (MERS). Regeneron has previously published details on how its proprietary VelociGene and VelocImmune technologies enabled the rapid identification
and preclinical validation of these antibody candidates.

 

Akebia Therapeutics announced the publication of a retrospective analysis indicating persistently greater mortality in dialysis-dependent chronic kidney disease (DD-CKD) patients with erythropoiesis-stimulating
agent hyporesponse (ESAhr). The article, titled “Spectrum and Burden of Erythropoiesis-Stimulating Agent Hyporesponsiveness Among Contemporary Hemodialysis Patients,” was published online in the American Journal of Kidney Diseases.

 

Versartis announced the completion of enrollment in the Phase III VELOCITY trial of somavaratan in pediatric GHD. With 137 patients enrolled, the trial is powered at >90% to demonstrate non-inferiority
of somavaratan compared to daily rhGH. Patients will be followed for the primary trial endpoint of height velocity at 12 months, as well as safety and pharmacodynamic secondary endpoints. Top-line results are anticipated in Q3 2017.

 

IntelGenx announced the successful completion of a pilot clinical study for Montelukast VersaFilm that demonstrated a significantly improved pharmacokinetic profile against the reference product.
Montelukast is a unique drug repurposing opportunity for the treatment of degenerative diseases of the brain, such as mild cognitive impairment and Alzheimer’s disease, the most prominent form of dementia. The study data confirmed that buccal absorption of
the drug from the Montelukast film product resulted in a significantly improved bioavailability of the drug compared to the commercial tablet. The study was designed as a single-dose, randomized, two-way cross-over pilot study in 8 healthy subjects. AUC(0-inf)
was 3863 +/- 1343 ng/ml*h(-1) for the IntelGenx product vs. 2697 +/- 1003 ng/ml*h(-1) for the reference product Singulair(R) tablets, representing a 52% increase in bioavailability of the drug after administration of the IntelGenx film product. In addition,
the study data confirmed that Montelukast crosses the blood/brain barrier when administered using IntelGenx’ Versafilm delivery technology.  The Company has begun preparation for a Phase II-a proof-of-concept (POC) study. Patient enrolment for this study is
expected to commence in Q1/2017. The Company expects the results from the study to be available in Q4/2017. Based on the outcome of this first efficacy trial in humans, IntelGenx will be actively seeking a partnership or alliance opportunity to further advance
developmental work and commercialization of this product.

 

MabVax Therapeutics Holdings announced the closing of its public offering of common stock and Series F Preferred Stock and warrants for a total of $9.4 million, including approximately $800,000
received from the underwriter in exercising the full amount of its over-allotment option. Sold in the offering were a combination of common stock and Series F Preferred Stock at $4.81 per share of common stock or Series F Preferred Stock, and included one
Class A warrant exercisable at $5.55 per share and one Class B warrant exercisable at $6.29 per share for each share of common stock or Series F Preferred Stock sold in the offering. Both
OPKO Health and Dr. Phillip Frost, CEO and Chairman of OPKO Health, participated in the offering. The total gross proceeds of the public offering were before the underwriter’s discount and expenses. The warrants are immediately exercisable and expire
August 17, 2019. Neither the warrants nor the Series F Preferred Stock will be separately listed on any securities exchange or other trading market.
Laidlaw & Company (UK) Ltd. acted as the sole book-running manager for this offering including exercise of the over-allotment option.

 

Reuters reported that
XBiotech
filed for a stock shelf offering of up to 7 million shares.

 

MarketWatch reported that
Thar Pharmaceuticals plans an IPO to raise up to $50 million, according to a filing with the SEC.
SunTrust Robinson Humphrey is listed as the sole underwriter for the offering. The company plans to trade on the Nasdaq under the ticker symbol “THAR”.

 

On August 19, 2016,
Exelixis
entered into separate, privately negotiated exchange agreements  with certain holders of the Company’s 4.25% Convertible Senior Subordinated Notes due 2019. Under the terms of the Exchange Agreements, the holders agreed to exchange an aggregate
principal amount of approximately $71.3 million of Notes held by them in exchange for an aggregate of approximately 13,424,945 shares of the Company’s common stock. In addition, pursuant to the Exchange Agreements, the Company will make an aggregate cash payment
of approximately $0.7 million to the holders for additional exchange consideration. The exchange transactions are expected to close on or about August 25, 2016, subject to customary closing conditions. Immediately following the exchange of the Notes contemplated
by the Exchange Agreements, approximately $48.1 million in aggregate principal amount of the Notes will remain outstanding.

 

PixarBio announced the opening of the oversubscription of our private placement memorandum. In order to allow institutions to complete diligence, and are extending the closing date of the PPM
to September 9, 2016. They expect to close the oversubscription up to $30,000,000 and to begin public trading the second week of September.

 

Valeant Pharmaceuticals announced that Paul S. Herendeen has been appointed Executive Vice President, Finance and will take over the role of Chief Financial Officer from Robert L. Rosiello effective
immediately.  Mr. Rosiello will remain at Valeant as Executive Vice President, Corporate Development and Strategy

 

Moleculin Biotech announced the appointment of Jonathan P. Foster as Executive Vice President and CFO.

 

Editas Medicine announced the appointment of Charles Albright, Ph.D. as Chief Scientific Officer.

 

 

ANALYST RECOMMENDATIONS

 

Rodman &Renshaw
analyst Raghuram Selvaraju assumed coverage of Mateon Therapeutics with a “buy” rating and $2 price target, citing Mateon represents an underrated prospect with significant upside potential for the long-term investor.

 

Rodman &Renshaw
analyst Raghuram Selvaraju initiated coverage of HTG Molecular Diagnostics
with a “buy” rating and $5 price target, citing the global cancer/tumor profiling market has been growing swiftly as the industry shifts towards personalized precision medicine requiring molecular profiling.

 

The following analysts initiated coverage of
Kadmon Holdings: JMP Securities Michael King analyst with a “market outperform” rating and $16 price target;
Jefferies analyst Biren Amin with a “buy” rating and $12 price target;
HC Wainwright
analyst Andrew Fein with a “buy” rating $25 price target.

 

Stifel analyst Stephen Willey downgraded
Relypsa to “hold” from “buy,” citing expectations the proposed transaction from Galenica closes in a timely manner.

 

Canaccord analyst Mark Massaro decreased his price target of
HTG Molecular Diagnostics to $5.50 from $6.00, citing postponed Project Janus development for the remainder of 2016 to focus R&D resources to custom high-value assay development and Lung Fusions clinical trials.

 

CL King analyst David Westenberg downgraded
Illumina to “neutral” from “buy,” citing the recent run-up in the stock.

 

Evercore analyst Mark Schoenebaum has temporarily suspended coverage of
Pfizer due to Evercore’s role in the transactions.