BioShares Biotechnology Clinical Trials (BBC): $17.32, +$0.99, -40.4% YTD

BioShares Biotechnology Products (BBP): $28.89, +$0.80, -6.3% YTD

 

 

MARKET COMMENTARY

 

Hillary Clinton’s bid for the White House got fresh momentum after news that she will not face criminal charges related to her private email server, pushing U.S. stock index futures higher. Employment trends and consumer credit data are on the economic calendar. Investors will also watch for results from major companies including Marriott International and News Corp that are scheduled to report after the closing bell. European bourses followed movement in Asian markets. Oil prices rose, boosted by a commitment from OPEC to stick to a deal to cut output. A stronger dollar hurt gold prices.

 

 

MARKET HIGHLIGHTS

 

DelMar Pharmaceuticals announced that the Company and its research collaborators have presented data at two scientific conferences hosted by the American Association for Cancer Research (AACR).  The data demonstrate that, upon treatment, VAL-083 rapidly forms cross-links on the DNA of cancer cells leading to cell cycle arrest in the S/G2 phase and lethal double-strand DNA breaks.  This mechanism is distinct from other alkylating agents used in the treatment of cancer such as temozolomide, nitrosoureas or platinum-based chemotherapy.  Because VAL-083′s mechanism differs from the others it is not subject to the same resistance mechanisms and therefore may be used to treat patients whose tumors are resistant to other therapies.

 

Kedrion Biopharma, and Kamada Ltd. announced that the U.S. Food and Drug Administration (FDA) has accepted for review a Biologics License Application (BLA) for a human anti-rabies immunoglobulin (IgG) therapy. Rabies is a life-threatening condition that impacts approximately 40,000 people in the U.S. each year. At present, U.S. healthcare professionals have only two rabies IgG therapy options from which to select in preventing the onset of rabies in someone who may have been exposed to the deadly virus.  The post-exposure prophylaxis treatment being developed by Kedrion Biopharma and Kamada is a human plasma-derived immunoglobulin (IgG) and has the potential to provide stability and secure availability in a market that has experienced inconsistent supply and supply shortages in recent years.

 

Alcobra announced that management will participate in the Stifel Healthcare Conference on November 15, the Jefferies London Healthcare Conference on November 17, the 28th Annual Piper Jaffray Healthcare Conference on November 29th, and the Oppenheimer Life Sciences Summit on November 29th.

 

Foamix Pharmaceuticals will report its financial results for the third quarter ended September 30, 2016 before the market open, and will host a corporate update conference call and webcast on Wednesday, November 16, at 8:30am Eastern Time.

 

Aurinia Pharmaceuticals released its financial results for the third quarter ended September 30, 2016.  For the third quarter ended September 30, 2016, the Company reported a consolidated net loss of $7.4 million or $0.21 per common share, as compared to a consolidated net loss of $5.2 million or $0.16 per common share for the same period in 2015.  The Company had cash, cash equivalents and short term investments of $15.4 million at September 30, 2016 compared to $12.1 million at June 30, 2016 and $15.8 million at December 31, 2015.

 

Rexahn Pharmaceuticals announced financial results for the third quarter ended September 30, 2016.  Rexahn’s net loss was $2.9 million, or $0.01 per share, for the three months ended September 30, 2016, compared to a net loss of $4.0 million, or $0.02 per share, for the three months ended September 30, 2015.  Rexahn’s cash and investments totaled approximately $21.8 million as of September 30, 2016, compared to approximately $23.4 million as of December 31, 2015. 

 

Biogen and Ionis Pharmaceuticals announced that SPINRAZA (nusinersen), an investigational treatment for spinal muscular atrophy (SMA), met the primary endpoint at the interim analysis of CHERISH, the Phase III study evaluating SPINRAZA in later-onset (consistent with Type II) SMA. The analysis found that children receiving SPINRAZA experienced a highly statistically significant improvement in motor function compared to those who did not receive treatment. SPINRAZA demonstrated a favorable safety profile in the study.

 

Cempra announced that the majority of the FDA Antimicrobial Drugs Advisory Committee (AMDAC) voted (7-6) that efficacy results of Cempra’s solithromycin outweigh the risks for the treatment of community-acquired bacterial pneumonia (CABP). Members of AMDAC voted unanimously (13-0) that there was substantial evidence of the efficacy of solithromycin for CABP. The committee also voted (12-1) that the risk of hepatotoxicity with solithromycin had not been adequately characterized and discussed a variety of potential approaches to further characterize the existing liver safety information on solithromycin. The target date for the FDA to take action under the PDUFA is December 27 and 28, 2016 for the oral and IV filings, respectively.

 

Horizon Pharmaceuticals reported 3Q16 non-GAAP EPS of $0.70, which compares to $0.42 for the same period a year ago. The company beat the First Call non-GAAP EPS mean estimate of $0.63. Total revenue for 3Q16 was $273.7 million, which compares to $226.5 million for the same period a year ago. This compares to a mean estimate of $270.0 million.

 

ARIAD Pharmaceuticals reported 3Q16 GAAP EPS loss of $0.14, which compares to a loss of $0.29 for the same period a year ago. The company beat the First Call GAAP EPS mean estimate loss of $0.19. Total revenue for 3Q16 was $46.0 million, which compares to $29.1 million for the same period a year ago. This compares to a mean estimate of $42.9 million.

 

Vertex Pharmaceuticals announced the results of a Phase III study of ORKAMBI (lumacaftor/ivacaftor) in children with cystic fibrosis (CF) ages 6 through 11 who have two copies of the F508del mutation. The study met its primary endpoint of absolute change in lung clearance index (LCI(2.5) ) through 24 weeks of treatment, demonstrating a statistically significant improvement in LCI(2.5) among patients treated with ORKAMBI compared to placebo. LCI is a sensitive measure of lung function in early CF disease and the EMA agreed to the primary endpoint for this study. In the first half of 2017, Vertex plans to submit a MAA line extension to the EMA for the use of ORKAMBI in this patient population. Data from a previous Phase III open-label safety study in children ages 6 through 11 supported the FDA approval of ORKAMBI in September 2016. In this second study, ORKAMBI was well tolerated with safety data that were similar to data from the previous Phase III study. There are approximately 3,400 children ages 6 through 11 who have two copies of the F508del mutation in Europe.

 

Amgen announced that the FDA has approved the sBLA for the expanded use of ENBREL (etanercept), making it the first and only systemic therapy to treat pediatric patients (ages 4-17) with chronic moderate-to-severe plaque psoriasis. The approval is based on results from a Phase III one-year study and its five-year open-label extension study to evaluate the safety and efficacy of ENBREL in pediatric patients, ages 4 to 17, with chronic moderate-to-severe plaque psoriasis. In addition to demonstrating significant efficacy, the adverse events were similar to those seen in previous studies in adults with moderate-to-severe plaque psoriasis.

 

Exelixis announced the presentation of new data from clinical trials of cobimetinib in combination with other therapies to treat forms of advanced melanoma. Data from Phase Ib trials of cobimetinib in combination with atezolizumab, and with atezolizumab and vemurafenib, respectively, form the basis for two Genentech-sponsored Phase III pivotal trials anticipated to start in 2017. Additionally, data from a pooled analysis of the combination of cobimetinib and vemurafenib demonstrate the potential for the combination to deliver lasting clinical benefit.

 

Bayer announced that a sNDA for Stivarga (regorafenib) tablets has been submitted to the FDA for the second-line systemic treatment of patients with unresectable hepatocellular carcinoma (uHCC). Stivarga is currently approved for the treatment of patients with metastatic colorectal cancer (mCRC) who have previously been treated with fluoropyrimidine-, oxaliplatin-, and irinotecan-based chemotherapy, an anti-VEGF therapy, and, if RAS wild type, an anti-EGFR therapy, as well as the treatment of patients with locally advanced, unresectable, or metastatic gastrointestinal stromal tumor (GIST), who were previously treated with imatinib mesylate and sutinib maleate.

 

Ophthotech and Ajinomoto Althea entered into a Clinical and Commercial Services Agreement. Pursuant to the Services Agreement, Althea has agreed to provide clinical and commercial fill/finish services for Ophthotech’s product candidates Fovista and Zimura, as well as any future product candidates that the parties may mutually agree. The Services Agreement has an initial term that will expire on the earlier of (i) eight years following the achievement of certain production and validation milestones under the CRA (as defined below) and (ii) December 31, 2027, absent termination by either party in accordance with the terms of the Services Agreement. The initial term of the Services Agreement may be extended by mutual agreement of the parties. The amount payable by Ophthotech to Althea under the Services Agreement is based on the volume of product that Ophthotech orders, subject to reduction following the successful validation of certain high-speed fill/finish line equipment specified in the CRA, and further subject to periodic adjustments over the term of the Services Agreement. In addition, in the event that Ophthotech orders a specified volume of product, Althea has agreed to supply biological or pharmaceutical drug products meeting certain parameters exclusively to Ophthotech. Ophthotech may cancel any purchase order under the Services Agreement at any time, subject to the payment of specified cancellation fees. Ophthotech may terminate the Services Agreement, without cause, as of any date following the third anniversary of the effective date upon six months’ prior notice to Althea. Each party also has the right to terminate the Services Agreement for other customary reasons such as material breach and bankruptcy.

 

Actelion announced that the MERIT study to assess the efficacy, safety and tolerability of macitentan in patients with inoperable chronic thromboembolic pulmonary hypertension (CTEPH; Pulmonary hypertension group 4) has met its primary endpoint.

 

Neovacs announced the enrolment of the first U.S. patient in its international Phase IIb clinical study of IFNalpha Kinoid in lupus.

 

Intec Pharma announced that the protocol for the Accordance Study, the company’s global Phase III clinical trial of the Accordion Pill Carbidopa/Levodopa (AP-CD/LD) as a treatment for Parkinson’s disease (PD) symptoms in advanced PD patients, has been amended to reflect input from key opinion leaders and biostatisticians specializing in PD. The protocol amendment reduces the study’s sample size from 460 patients to 328 patients, but does not alter the objectives, endpoints or statistical power (90%) of the global Phase III clinical trial. The amendment was submitted to and reviewed by the FDA and the Agency had no comments to these proposed changes. The Accordance study is a multicenter, randomized, double-blind, double-dummy, parallel, active-controlled Phase III trial in the United States, Europe and Israel. The study is now expected to enroll approximately 328 participants across the two original arms: AP-CD/LD or Sinemet IR, an immediate release carbidopa levodopa medication that is currently on the market. The primary efficacy endpoint of the study is change from baseline to end of treatment in the percentage of daily "Off time" during waking hours.

 

Aduro Biotech highlighted an oral presentation given by the company’s chief scientific officer, Thomas Dubensky Jr., Ph.D., at the 4th European Society of Medical Oncology (ESMO) Symposium on Immuno-Oncology held last week in Lausanne, Switzerland. The data, generated from multiple preclinical models, demonstrated important changes in the tumor microenvironment and the activation of acute and systemic tumor-specific immune cell responses following intratumoral administration of ADU-S100 (also known as MIW815), an investigational STING (Stimulator of Interferon Genes) Pathway Activator immunotherapy. Importantly, these preclinical data underscore the ability for ADU-S100 to induce tumor-specific memory mediated by immune cells (e.g. T-cells and NK-cells) whereby the immune system is able to eliminate specific cancerous cells upon their reintroduction without further therapy. Additionally, the anti-tumor efficacy achieved with ADU-S100 was enhanced by combination with an anti-PD-1 immune checkpoint inhibitor, and resulted in the complete eradication of local and distal tumors.

 

Lexicon Pharmaceuticals announced that it has obtained exclusive research, development and commercialization rights to LX9211 (BMS-986176), a development candidate for neuropathic pain that was jointly developed by Lexicon and Bristol-Myers Squibb as part of their neuroscience drug discovery alliance. Additional small molecule compounds acting through the same target as LX9211 are also included in the exclusive arrangement. LX9211 is currently completing IND-enabling studies, with Phase I clinical trials anticipated to commence during 2017.

 

Myriad Genetics announced that it will submit its BRACAnalysis CDx test for approval by Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) in parallel with the PMDA review of AstraZeneca’s novel PARP inhibitor, olaparib.

 

Versartis presented safety, efficacy, and IGF-I data from somavaratan treatment in the combined Phase IIa and ongoing VISTA long-term safety study for pediatric GHD today during the 8th International Congress of the GRS & IGF Society.

 

Cytokinetics announced the publication of preclinical data characterizing a smooth muscle myosin (SMM) inhibitor that induces smooth muscle relaxation. The manuscript titled, "Highly Selective Inhibition of Myosin Motors Provides the Basis of Potential Therapeutic Application," published in PNAS, Proceedings of the National Academy of Sciences, illustrates a mechanism of action with potential relevance for diseases of smooth muscle hypercontractility such as asthma and chronic obstructive pulmonary disease. The research was conducted in collaboration with Anne Houdusse, Institut Curie, Paris, France.

 

Progenics Pharmaceuticals announced that its wholly-owned subsidiary MNTX Royalties Sub has entered into a $50 million term loan agreement with a fund managed by HealthCare Royalty Partners secured by, and to be repaid from, royalties from future sales of RELISTOR. Under the terms of the loan agreement, the lenders have no recourse to Progenics Pharmaceuticals, Inc., the parent company or to any of its assets other than the RELISTOR royalty rights.

 

MabVax Therapeutics Holdings announced that the company has been issued Patent No. 9,475,874 by the USPTO for its clinical stage HuMab5B1 fully-human monoclonal antibody that forms the basis for the company’s MVT-5873 and MVT-2163 clinical development programs. Both programs are currently enrolling patients in Phase I clinical trials. MVT-5873 entered a Phase I clinical trial (ClinicalTrials.gov Identifier: NCT02672917) in February of this year as a treatment for patients with locally advanced or metastatic adenocarcinoma of the pancreas and other malignancies that express the same cancer antigen, which is highly prevalent on many gastrointestinal cancers. The diagnostic version of the antibody, MVT-2163, entered a Phase I clinical trial (ClinicalTrials.gov Identifier: NCT02687230) in July of this year as a next generation PET imaging agent for patients with pancreatic cancer. The company anticipates announcing interim results of both of these trials later this quarter regarding safety and targeting specifity to the cancer antigen.

 

Trovagene announced that the USPTO has issued Patent No 9,453,265 entitled "Method for Detection of High Risk Human Papillomavirus." The patent encompasses directed methods of detecting high-risk HPV infections by identifying mutations in the E1 gene of HPV in the urine of a patient, expanding the intellectual property covering Trovagene’s Precision Cancer Monitoring (PCM) technology. Trovagene now has 91 patents issued and 72 patent applications pending in the U.S. and internationally.

 

Lipocine reported the USPTO issued U.S. Patent number 9,480,690, entitled "High-Strength Testosterone Undecanoate Compositions" on November 1, 2016. The claims in the issued patent relate to dosing regimens associated with the oral administration of Testosterone Undecanoate  compositions. Bio-reversible TU is the key component in LPCN 1021.

 

Fortress Biotech has formed a new subsidiary company, Cellvation, to develop novel therapies for the treatment of traumatic brain injury ("TBI"). Cellvation has entered into an agreement with The University of Texas Health Science Center at Houston (UTHealth) to secure exclusive worldwide rights to three programs for TBI, including two Phase II cell therapies.

 

Neptune Technologies & Bioressources announced that the Australian Patent Office has confirmed the validity of all 97 claims under Neptune’s Australian composition of matter patent (AU 2002322233) (the "Neptune claims"). As a result, Neptune has overcome Enzymotec Ltd. and Enzymotec USA, Inc.‘s third attempt to invalidate any of the Neptune claims. Under the terms of a settlement and license agreement entered into with Enzymotec on April 27, 2014, Enzymotec’s royalty obligations in Australia are dependent on the continued validity of at least one of certain Neptune claims. Given the conclusions of the Australian Patent Office, Neptune is seeking recovery of all royalties payable to Neptune under the Agreement. In addition, Neptune has the right to terminate and revoke the license Agreement that allows Enzymotec to sell Krill oil in Australia should they continue to fail to respect their obligations.

 

Roche announced the launch of KAPA RNA HyperPrep product, a robust RNA library preparation solution for a range of sample types and input amounts. These kits provide a single-tube workflow and decrease processing time by 30 percent while maintaining quality.

 

Cocrystal Pharma announced positive data from a randomized, double-blind Phase Ia/Ib study of CC-31244, a pan-genotypic, potent NS5B non-nucleoside inhibitor (NNI), for the treatment of chronic hepatitis C virus (HCV) infection.

 

Pluristem Therapeutics announced that the State Intellectual Property Office of the People’s Republic of China has issued an allowance to Pluristem for its patent application titled, "Adherent Cells From Adipose or Placenta Tissues and Use Thereof In Therapy". The patent addresses methods of treating Ischemic conditions such as CLI using placental cells. Additional patents of Pluristem in China cover methods of expending placental cells in a 3D apparatus, various therapeutic uses of placental cells and devices for a 3D culture of placental cells.

 

PixarBio announced that it has completed the closing of the sale of common shares and warrants in a private placement transaction resulting in expected proceeds of approximately $23.4 million from its private placement memorandum financing plus a $10MM line of credit. The PPM closed $7.2 million in cash, and warrants as exercised worth $16.2 million.

 

Illumina announced the launch of TruSight Tumor 170, a 170 gene next-generation sequencing solution to support the transformation of the tumor-profiling paradigm from a series of single-gene tests to a multi-analyte approach, providing a more thorough picture of a tumor’s genomic landscape.

 

Teva Pharmaceutical Industries announced approval of generic Tribenzor 1 (olmesartan medoxomil, amlodipine and hydrochlorothiazide) tablets in the U.S. and is in the final stages of launch preparation. Teva also recently received approval and launched generic Azor 2 (amlodipine and olmesartan medoxomil) tablets in the U.S. These products enhance Teva’s antihypertensive portfolio.

 

Takeda Pharmaceutical Company Limited and Koneksa Health announced an ongoing strategic collaboration to utilize new digital health tools in clinical trials.

 

Ascend Biopharmaceuticals announced interim results from the first nine patient of  its Phase I/IIa clinical trial evaluating the safety and clinical activity (as measured by clinical and histological clearance) of its lead candidate, ASN-002.  The study is evaluating three escalating doses in nodular basal cell carcinoma (nBCC) patients, a common type of skin cancer. The results showed that the treatment has a favorable safety profile and demonstrated encouraging signs of efficacy.  The complete response (CR) rate in the high dose cohort was 100%. In the second medium dose cohort, 67% of patients achieved a CR with 33% achieving a partial response.  The overall objective response rate observed for the medium and high doses was 100% and at the lowest dose administered, 33% of patients achieved a CR.

 

AquaBounty Technologies, a majority-owned subsidiary of Intrexon, announces that it has filed a registration statement for its common shares in the United States and has agreed to a conditional equity subscription from Intrexon.

 

Endo International announced the appointment of two Executive Leadership Team members. Terrance J. Coughlin has been named Executive Vice President and Chief Operating Officer and Tony Pera has been named President, Par Pharmaceutical, which is Endo’s U.S. Generics operating company. Both appointments are effective November 1, 2016.

 

 

ANALYST RECOMMENDATIONS

 

Guggenheim analyst Louise Chen assumed coverage of the following companies: AMAG Pharmaceuticals with a “buy” rating and $42 price target; TherapeuticsMD with a “buy” rating and $33 price target.

 

Following Regeneron’s earnings, Cowen analyst Phil Nadeau decreased his price target to $400 from $430; Piper Jaffray analyst Edward Tenthoff decreased his price target to $446 from $447; Barclays analyst Geoff Meacham decreased his price target to $375 from $425; Goldman Sachs analyst Terence Flynn decreased his price target to $514 from $533; Leerink analyst Geoffrey Porges decreased his price target to $504 from $513; Chardan Capital analyst Gbola Amusa decreased his price target to $300 from $325.   

 

Credit Suisse analyst Vamil Divan revised price targets for the following companies after 3Q earnings and ahead of the Credit Suisse Healthcare Conference: Alkermes to $71 from $70; Allergan to $301 from $329; Bristol Myers Squibb to $61 from $58; Galapagos to $56 from $48; Pfizer to $38 from $40.

 

Following Nektar Therapeutics’ earnings, Jefferies analyst David Steinberg increased his price target to $15 from $14.

 

Following Five Prime Therapeutics’ earnings, Credit Suisse analyst Kennen MacKay decreased his price target to $54 from $55.

 

Chardan Capital analyst Gbola Amusa decreased his price target of Spark Therapeutics to $47.50 from $55, citing lower likelihood that Spark Therapeutics has leading capabilities in bio-engineering AAV capsids.

 

Piper Jaffray analyst Joshua Schimmer downgraded BioMarin Pharmaceuticals to “neutral” from “overweight” and decreased his price target to $84 from $105, citing a number of under-appreciated (albeit theoretical) risks ahead; the analyst upgraded Biogen to “overweight” from “neutral”, citing there is time for BIIB to get its act together to maximize the value of its SMA franchise, and stop being M&A disciplined/ pipeline-undisciplined.

 

Lake Street Capital analyst Bruce Jackson increased his price target of TESARO to $150 from $114, citing a productive series of events that has positioned niraparib to launch during 2017 with a broader than expected label.

 

Bank of America Merrill Lynch analyst Sumant Kulkarni made changes to the following companies: downgraded Akorn to “underperform” from “buy” and decreased his price objective to $22 from $40; downgraded Impax Labs to “underperform” from “neutral” and decreased his price objective to $19 from $29; downgraded Teva to “neutral” from “buy” and decreased his price objective to $48 from $72.

 

Aegis Capital analyst Jason Wittes initiated coverage of the following companies: Neuralstem with a “buy” rating and $2.25 price target; Celldex Therapeutics with a “buy” rating and $10 price target.

 

Citi analyst Yigal Nochomovitz downgraded Merus to “neutral” from “outperform” and increased his price target to $19 from $14, citing MRUS is up ~100% in the last two months, surpassing the initiation target price of $14 and making risk/reward less favorable into YE16 data for lead breast cancer drug MCLA-128.