BioShares Biotechnology Clinical Trials (BBC): $18.62, -$0.46, -35.9% YTD

BioShares Biotechnology Products (BBP): $33.25, -$0.80, +7.9% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures indicated a lower start for Wall Street as investors await a slew of economic data later in the day. Investors will watch out for U.S. third quarter gross domestic product, durable goods orders for November and weekly jobless claims data. European stock markets were trading broadly lower except Italy’s blue-chip FTSE MIB, which edged higher as investors shrugged off uncertainty over Monte die Paschi’s rescue plan. Major Asian markets declined and gold traded slightly lower. Oil prices declined on an unexpected rise in U.S. crude inventories and the dollar fell on profit-taking.

 

 

MARKET HIGHLIGHTS

 

TiGenix NV announced that it has received a confirmation notification from Takeda Pharmaceuticals International AG (Takeda) stating that it has decided to exercise its option to develop and commercialize Cx601 in both Japan and Canada.  This decision gives TiGenix the right to receive additional future milestone payments of up to 3,000,000 euros for both countries (1,500,000 individually) in the event of obtaining a marketing approval by the relevant Regulatory Authority, in either or both countries, including an early access program, or conditional approval, allowing patients with Crohn’s disease suffering from perianal fistula in these countries to gain access to Cx601. In addition to these approval milestones, TiGenix is eligible to receive price reimbursement milestones for up to 2,000,000 euros for both countries (1,000,000 individually) as well as double-digit royalties on net sales.

 

Genticel and Genkyotex, a Swiss privately-held biopharmaceutical company and the leader in NOX therapies, announced today that Genticel has signed a contribution agreement with the shareholders of Genkyotex pursuant to which, subject to the approval of Genticel’s shareholders at a meeting expected to be held in the first quarter of 2017, Genkyotex’s shareholders will contribute in kind 100% of the Genkyotex share capital (on a fully diluted basis) to Genticel, which will issue new shares in remuneration for the contribution. Upon completion of the proposed transaction, Genkyotex’s shareholders will hold 80% of Genticel’s share capital and voting rights (on a non-diluted basis).

 

Aurinia Pharmaceuticals announced that it has entered into an underwriting agreement with H.C. Wainwright & Co., LLC acting as sole book-running manager, and Cormark Securities Inc., as co-manager, under which the Underwriters have agreed to purchase 11,111,111 units from the Company at the price of US$2.25 per Unit for aggregate gross proceeds of approximately US$25.0 million, before underwriter fees and expenses. Each Unit consists of one common share of the Company and one-half of a warrant to buy one Share, with an exercise price of $3.00 per whole warrant. The Warrants have an exercise period of 5 years after the closing of the Offering.

 

Prima BioMed announced interim data from the AIPAC Phase IIb clinical trial for IMP321 in metastatic breast cancer (Active Immunotherapy PAClitaxel). The initial data confirms previous trial results showing IMP321 is safe and well tolerated.

 

XOMA announced several corporate actions to further streamline its operations to focus on XOMA 358 clinical development, monetize non-core assets, and strengthen its balance sheet. XOMA entered into two Royalty Interest Acquisition Agreements (together, the “Acquisition Agreements”) with HealthCare Royalty Partners II. Under the first Acquisition Agreement, XOMA sold its right to receive royalties on future sales of products subject to a License Agreement, dated August 18, 2005, between XOMA and Wyeth Pharmaceuticals (now Pfizer) (the “Pfizer License Agreement”) for a payment of $6,500,000 upfront, plus the potential for additional payments totaling $4,000,000 in the event of the achievement of three specified net sales milestones in 2017, 2018 and 2019. Under the second Acquisition Agreement, XOMA sold all rights to milestone payments and royalties under an Amended and Restated License Agreement dated October 27, 2006 between XOMA and Dyax (the “Dyax License Agreement” and, together with the Pfizer License Agreement, the “License Agreements”) for a payment of $11,500,000.

 

OvaScience announced a business update. The Company will continue to make AUGMENT available to patients at partner clinics in Canada and Japan and maintain its current commercial footprint. However, the Company will slow its commercial expansion, reassess its ongoing and planned clinical studies of AUGMENT, and undertake a corporate restructuring. These changes will enable the Company to extend its cash position into the first quarter of 2019 and increase its focus on the development of OvaPrime and OvaTure. Following the news, Credit Suisse analyst Kennen MacKay decreased his price target to $2 from $4.

 

Alexion Pharmaceuticals reported results from the PROTECT Study, a Phase II/III registration trial of eculizumab (Soliris) for the prevention of delayed graft function (DGF) after kidney transplantation in adult recipients of a deceased donor kidney. The primary endpoint of incidence of DGF with a two-dose regimen of eculizumab compared with placebo did not reach statistical significance. DGF is an early and serious complication of organ transplantation in which the transplanted organ fails to function normally immediately following transplantation, and was defined in the study as the requirement for dialysis for any reason in the first 7 days post-transplant. The primary endpoint also included incidence of death, graft loss, and loss to follow-up, including discontinuation.

 

Tokai Pharmaceuticals and Otic Pharma announced that the two companies, together with the shareholders of Otic Pharma, have entered into a definitive share purchase agreement under which the shareholders of Otic Pharma will become the majority owners of Tokai. The transaction will result in a NASDAQ-listed company focused on the development and commercialization of products for ENT disorders, including Otic Pharma’s lead candidate which is a nasally-administered, combination drug product (OP-02) intended to address the underlying cause of otitis media and Eustachian tube dysfunction (OM/ETD), a condition that affects more than 700 million people around the world every year. The company will operate under the name OticPharma, Inc., and will be led by Gregory J. Flesher, current CEO of Otic Pharma Ltd. Current President and CEO of Tokai, Jodie Morrison, will remain as a member of the board of directors.

 

Novelion Therapeutics announced that its subsidiary has submitted a MAA to the EMA seeking approval for metreleptin as replacement therapy to treat complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy (GL) and in a subset of patients with partial lipodystrophy (PL).

 

Ionis Pharmaceuticals announced that it has earned $5 million milestone payment from Janssen Biotech associated with the validation of an undisclosed target to treat patients with a gastrointestinal (GI) autoimmune disease. Under the collaboration, Ionis and Janssen will continue to evaluate the target with the goal of advancing an antisense drug into development.

 

NeuroDerm announced that it completed patient enrollment and treatment in trial 006 of ND0612H, the company’s continuously administered levodopa/carbidopa (LD/CD) solution. ND0612H, administered subcutaneously through a belt pump, is designed to deliver steady LD/CD levels to advanced Parkinson’s patients with motor fluctuations that cannot be adequately controlled with oral therapy and to become an alternative to treatments with surgical intervention.

 

Ironwood Pharmaceuticals and Allergan announced topline data from a Phase IIb clinical trial evaluating an investigational linaclotide colonic release-2 (CR2) formulation in adult patients with irritable bowel syndrome with constipation (IBS-C). The data showed that CR2, as intended, numerically improved abdominal pain and other abdominal symptoms, such as bloating and discomfort, relative to placebo, with no apparent effect on bowel movement function. These findings support further investigation of CR2 in specific GI indications where patients experience abdominal pain but are not necessarily constipated, such as IBS-Mixed, IBS with diarrhea, ulcerative colitis and diverticulitis. The companies plan to engage with the FDA to discuss next steps for advancing CR2 into a Phase IIb dose-ranging clinical trial in patients with non-constipation subtypes of IBS.

 

Horizon Pharma and its affiliate Horizon Therapeutics Canada Limited, announced that QUINSAIR (levofloxacin inhalation solution) is now available in Canada for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis (CF). QUINSAIR is the first inhaled fluoroquinolone antibiotic to receive marketing authorization from Health Canada.

 

Immunomedics announced the issuance of U.S. Patent 9,522,959 for additional claims under the patent family, "Dosages of immunoconjugates of antibodies and SN-38 for improved efficacy and decreased toxicity." The issued patent provides additional coverage for IMMU-140, the third antibody-drug conjugate (ADC) based on the Company’s award-winning SN-38 platform technology. The lead investigational product from that program is sacituzumab govitecan (IMMU-132), which has continued to produce encouraging results in a Phase II study in patients with metastatic triple-negative breast cancer (TNBC), and has been designated a Breakthrough Therapy by the FDA for TNBC patients who have received at least two prior therapies for their late-stage disease.

 

Impax Laboratories announced the launch of a generic version of Kadian (morphine sulfate) Extended Release Capsules, USP CII 20, 30, 50, 60, 80, 100 mg.

 

Protalix BioTherapeutics announced that the last patient has been enrolled in the company’s Phase II clinical trial of AIR DNase (PRX-110) for the treatment of Cystic Fibrosis (CF). The Company expects to report interim top-line results from this study during the first week of January 2017, and full results before the end of the first quarter of 2017.

 

Helix BioPharma announced that it has signed a non-binding letter of intent (LOI) with ProMab Biotechnologies to develop cell based therapies. The LOI calls for both companies to complete a due diligence and establish a collaboration to develop chimeric antigen receptor T cell therapy (CAR-T) for hematological malignances and solid tumors. The collaboration will seek to exploit Helix novel single-domain antibodies based CAR-T and ProMab’s proprietary vector designs, antibodies library and cell based production know-how.

 

BeiGene announced the dosing of the first patient in a Phase I clinical trial of BGB-290, a potent and selective PARP inhibitor, in Chinese patients with advanced solid tumors.

 

Neurocrine Biosciences announced that Timothy P. Coughlin will be stepping down from his position as Chief Financial Officer in mid-February for personal reasons. The Board has initiated a replacement search and Mr. Coughlin has agreed to continue with the Company through 2017 to facilitate a smooth transition of responsibilities.

 

Genentech, a member of the Roche Group announced that data from three Phase III studies of its investigational medicine OCREVUS (ocrelizumab) – the OPERA I and OPERA II studies in relapsing multiple sclerosis (RMS) and the ORATORIO study in primary progressive multiple sclerosis (PPMS) – were published in the December 21, 2016 online issue of the New England Journal of Medicine (NEJM). Data from the OCREVUS Phase III studies showed consistent and clinically meaningful reductions in major markers of disease activity and progression compared with Rebif (interferon beta-1a) in RMS and with placebo in PPMS. The primary endpoint was met in all three studies, which includes relative reduction of annualized relapse rate in the RMS studies and relative reduction in the progression of clinical disability sustained for at least 12 weeks in the PPMS study. Key secondary endpoints in all three studies were also met, including multiple measures of disability progression and brain lesion activity.

 

Genomic Health announced that based on unparalleled clinical evidence, the American Joint Committee on Cancer (AJCC) incorporated the Oncotype DX test in its recently published Eighth Edition AJCC Cancer Staging Manual. Representing a rigorous, multi-disciplinary assessment, the updated criteria identify Oncotype DX as the only multi-gene test with Level I evidence to determine formal staging of breast cancer patients, based on clinical evidence in more than 63,000 patients.

 

Ligand Pharmaceuticals announced it has entered into a worldwide license agreement with ONO PHARMACEUTICAL CO., LTD. Under the license, ONO will be able to use the OmniRat, OmniMouse and OmniFlic platforms to discover fully human mono- and bispecific antibodies. Ligand is eligible to receive annual platform access payments, development milestone payments and royalties for each product incorporating an OmniAb antibody. ONO will be responsible for all costs related to the programs.

 

Motif Bio announced that it has issued, in aggregate, 14,510,770 new ordinary shares in the Company following the conversion by Amphion Innovations and Amphion Innovations US, of the Convertible Promissory Notes ("CPNs"). The CPNs which totaled $3,550,786 were converted in accordance with their terms at $0.2447 per share. Following the conversion, the Amphion Parties hold no further CPNs and their holdings total 43,240,645 ordinary shares, being 22% of the Company.

 

Biohaven Pharmaceutical announced that it has enrolled the first patient in its potentially pivotal Phase IIb/III clinical trial assessing the efficacy and safety of its drug candidate BHV-4157 in patients with hereditary spinocerebellar ataxia (SCA). SCA is a rare and debilitating neurodegenerative disorder with no currently approved therapies. In May 2016, the FDA granted the company’s request for orphan drug designation for BHV-4157, a new chemical entity (NCE) that modulates brain glutamate, for the treatment of SCA. SCA is estimated to affect approximately 10,000 to 20,000 people in the United States. The standard of care treatment is supportive treatment, and no medications are currently approved for this debilitating condition.

 

PharmaMar has announced the signing of an exclusive license, development and commercialization agreement with Chugai Pharmaceutical for its third marine-derived anticancer drug PM1183 (lurbinectedin) in Japan. Under the terms of this agreement, PharmaMar will receive an upfront payment of €30 million, along with double-digit tiered royalties, and will also be eligible for receiving payments in line with the progress of the development and sales milestones; potentially worth over €100 million.

 

Celgene announced that the National Institute for Health and Care Excellence (NICE) has issued a final appraisal determination (FAD) recommending the use of OTEZLA (apremilast) for the treatment of adult patients with active psoriatic arthritis who have had an inadequate response to or have been unable to tolerate Disease Modifying Anti-Rheumatic Drugs (DMARDs). OTEZLA does not require pre-screening for tuberculosis or regular laboratory monitoring.

 

Chugai Pharmaceutical announced that the primary endpoint has been met for the global phase lll HAVEN 1 study evaluating emicizumab (ACE910) prophylaxis for once-weekly subcutaneous injection with patients 12 years of age or older with hemophilia A and inhibitors to factor Vlll. A statistically significant reduction in the number of bleeds was confirmed in patients treated with emicizumab prophylaxis compared to those receiving no prophylactic treatment. The study also met all secondary endpoints, including a statistically significant reduction in the number of bleeds over time with emicizumab prophylaxis treatment in an intra-patient comparison in people who had received prior bypassing agent prophylaxis treatment. The most common adverse events with emicizumab were injection site reactions, consistent with prior studies.

 

Senomyx entered into a purchase agreement with Lincoln Park Capital Fund, pursuant to which the Company has the right to sell to LPC from time to time in its sole discretion up to $14,000,000 in shares of the Company’s common stock (“Common Stock”) over the next 24 months, subject to certain limitations and conditions set forth in the Purchase Agreement.

 

Amicus Therapeutics announced the closing of its previously announced private offering of $250 million aggregate principal amount of 3.00% convertible senior notes due 2023, including the full exercise by the initial purchasers of their option to purchase up to an additional $25 million aggregate principal amount of notes on the same terms and conditions, solely to cover over-allotments. Amicus anticipates that the aggregate net proceeds of the offering will be approximately $243.0 million. Goldman Sachs, J.P. Morgan Securities, BofA Merrill Lynch and Leerink Partners acted as bookrunners for the offering, and Cowen acted as lead manager. Amicus used approximately $13.5 million of the net proceeds from the offering to fund the payment of the cost of the capped call transactions and approximately $82.2 million of the net proceeds from the offering to refinance existing unsecured debt. Amicus intends to use the balance of the net proceeds from the offering for general corporate purposes.

 

RedHill Biopharma announced the pricing of its previously announced underwritten public offering and its concurrent registered direct offering of ADSs and warrants to purchase ADSs for expected aggregate gross proceeds, before deducting underwriting agent discounts and commissions, placement agent fees and other offering expenses, of approximately $38 million. The pricing for the underwritten public offering was for a total number of 2,250,000 ADSs, each representing ten of its ordinary shares, and warrants to purchase 1,125,000 ADSs, for expected gross proceeds of approximately $23 million. The pricing for the concurrent registered direct offering was for a total number of 1,463,415 ADSs and warrants to purchase 731,708 ADSs for expected gross proceeds of approximately $15 million. The price in both offerings is $10.25 for a fixed combination of one ADS and a warrant to purchase 0.5 of an ADS. The warrants in both offerings will have a per ADS exercise price of $13.33, and have a term of three years. Roth Capital Partners is acting as sole book-running manager and Echelon Wealth Partners is acting as Canadian manager for the underwritten public offering with respect to sales in Canada. Roth Capital Partners is acting as placement agent in the registered direct offering. The Company intends to use the proceeds from both offerings to fund clinical development programs, for potential acquisitions, to support commercial operations and for general corporate purposes.

 

 

ANALYST RECOMMENDATIONS

 

BTIG analyst Robert Hazlett initiated coverage of CoLucid Pharmaceuticals with a “buy” rating and $58 price target, citing CoLucid is focused on the development of a novel medicine for migraine headache.

 

Cantor Fitzgerald analyst Elemer Piros initiated coverage of Zynerba Pharmaceuticals with an “overweight” rating and $28 price target, citing by the end of the year, Zynerba will have three ongoing Phase II programs with its lead candidate, ZYN002, a transdermal synthetic cannabidiol, with results in 1H17.

 

Following Merus’s announcement of a bispecific collaboration with Incyte, Citi analyst Yigal Nochomovitz upgraded Merus to “buy” from “neutral” and increased his price target to $26 from $19.

 

Leerink analyst Jason Gerberry initiated coverage of Cardiome with an “outperform” rating and $4.75 price target, citing the company’s ability to drive meaningful operating and financial leverage through the launch of several new products.

 

Mizuho analyst Irina Koffler upgraded Sucampo to “buy” from “neutral,” citing accretive convertible debt financing and subsequent negative market reaction.

 

Piper Jaffray analyst Charles Duncan resumed coverage of PDL BioPharma with an “overweight” rating and $4 price target, citing the PDL strategy offers multiple avenues for outsized investor returns in 12+ months.

 

JP Morgan analyst Anupam Rama initiated coverage of Sarepta with an “overweight” rating and $40 price target, citing greater clarity on market dynamics / time to work with payers and pipeline data on the horizon.

 

HC Wainwright analyst Carol Ann Werther initiated coverage of Catabasis Pharmaceuticals with a “buy” rating and $14 price target, citing the company has focused on NK-kB inhibition, an anti-inflammatory target, which has potential if successfully to modulate the progression of disease in many conditions.

 

Piper Jaffray analyst Edward Tenthoff initiated coverage of Vericel with an “overweight” rating and $6 price target, citing the development of cell therapies for knee cartilage repair, severe burns and heart failure.

 

BTIG analyst Robert Hazlett increased his price target of Paratek to $47 from $45, citing compelling Phase III data in hand for ABSSSI (skin) infections, two additional significant pivotal trials due in mid- 2017, and modest economics from Allergan’s novel Phase III acne drug Sarecycline also attributable to Paratek.

 

Raymond James analyst Elliot Willbur initiated coverage of Flexion Therapeutics with a “buy” rating and $35 price target, citing Flexion is developing a novel and durable injectable product candidate known as Zilretta, an intra-articular formulation of approved corticosteroid triamcinolone acetonide.