BioShares Biotechnology Clinical Trials (BBC): $19.48, +$0.27, +5.8% YTD

BioShares Biotechnology Products (BBP): $35.06, +$0.16, +7.1% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were little changed ahead of a clutch of economic data and Federal Reserve Chair Janet Yellen appearance later in the day. Building permits, housing starts and initial claims data are on the economic calendar. Shares of IBM and American Express will be in focus as they report quarterly results after the closing bell. European markets were lower. Asian stocks closed mostly higher and the Nikkei index closed up on a weaker yen. Oil bounced back from a one-week low as the International Energy Agency said global oil markets were tightening. Gold came under pressure as Yellen advocated lifting U.S. interest rates gradually.

 

 

MARKET HIGHLIGHTS

 

BioTime and its subsidiary, Cell Cure Neurosciences, today announced that an abstract evaluating OpRegen® in patients with advanced dry Age-Related Macular Degeneration (dry-AMD) based on the ongoing Phase I/IIa clinical trial will be presented at the Association for Research in Vision and Opthalmology (ARVO) meeting taking place from May 7-11, 2017, in Baltimore, Maryland.

 

Heron Therapeutics announced the pricing of an underwritten public offering of $150 million of shares of its common stock, offered at a price of $12.20 per share. Heron Therapeutics, Inc. has granted the underwriters a 30-day option to purchase up to an additional $22.5 million of shares of common stock. The offering is expected to close on or about January 24, 2017, subject to customary closing conditions. BofA Merrill Lynch, Cowen and Company, LLC and Leerink Partners LLC are acting as joint book-running managers for the offering. Cantor Fitzgerald & Co. and JMP Securities LLC are acting as lead managers and Noble Capital Markets, LifeSci Capital, Aegis Capital Corp and Lake Street Capital Markets are acting as co-managers for the offering.

 

Cytori Therapeutics announced it has entered into a definitive agreement to acquire certain assets from privately held Azaya Therapeutics, a leader in the research, development and manufacturing of nanoparticle and protein-stabilized liposomal therapeutics. The Acquisition is subject to customary closing conditions, including obtaining third party consents and approvals and obtaining the approval of Azaya’s stockholders, and is expected to close on or prior to February 28, 2017. The Acquisition, if consummated, would provide Cytori with a proprietary liposomal nanoparticle technology platform that would expand and complement the Company’s leadership position in regenerative medicine.

 

Abeona Therapeutics announced that the EMA Committee for Orphan Medicinal Products has granted Orphan Drug Designation (EMA/OD/226/16) for Abeona’s gene therapy program ABO-101 for children impacted by Sanfilippo syndrome type B (MPS IIIB), a rare autosomal recessive disease that causes neurocognitive decline, speech loss, loss of mobility, and premature death in children.

 

PharmAthene and Altimmune announced the signing of a definitive agreement for the merger of PharmAthene and Altimmune in an all-stock transaction. Altimmune’s current investors include Novartis Venture Fund, HealthCap, Truffle Capital and Redmont Capital. The combined company will be a fully-integrated and diversified immunotherapeutics company with four clinical stage and one preclinical stage programs. The proposed transaction does not affect PharmAthene’s previously announced special one-time cash dividend of $2.91 per share of common stock.

 

Synthetic Biologics confirmed plans to initiate a Phase IIb/III adaptive pivotal trial for SYN-010, the Company’s modified-release reformulation of lovastatin lactone designed to reduce methane production by certain microorganisms (M. smithii) in the gut to treat the underlying cause of irritable bowel syndrome with constipation (IBS-C). The Company anticipates initiating this trial by the end of the first quarter of 2017.

 

Mallinckrodt announced that it has reached agreement with the FTC to resolve, without admission of wrongdoing, the previously disclosed FTC investigation into the acquisition by Questcor Pharmaceuticals, of Synacthen Depot, a synthetic ACTH product, in 2013. The product became part of Mallinckrodt’s portfolio with its August 2014 acquisition of Questcor. Under the agreement, Mallinckrodt will license the drug to a licensee, identified by the FTC as Marathon Pharmaceuticals, to develop and pursue possible FDA approval of Synacthen Depot in two indications – Infantile Spasms (IS) and Nephrotic Syndrome (NS). The licensee will also acquire exclusive rights to the Synacthen trademark in the U.S. Under the agreement, Mallinckrodt will also pay $100 million to settle claims made by the FTC and five states – $90 million of which will be paid within 10 business days, $10 million within 90 days – plus $2 million to reimburse the states’ legal fees.

 

Bristol-Myers Squibb announced the results of ONO-4538-12 demonstrating Opdivo (nivolumab) significantly reduced the risk of death by 37% (HR 0.63; p<0.0001) in patients with previously treated advanced gastric cancer refractory to or intolerant of standard therapy, a condition without current standard-of-care treatments. ONO-4538-12 is a Phase III, randomized, double-blind, placebo-controlled clinical trial evaluating Opdivo’s efficacy and safety in such patients. The primary endpoint of the study is overall survival (OS). Median OS was 5.32 months (95% CI: 4.63 to 6.41) for patients treated with Opdivo, compared to 4.14 months (95% CI: 3.42 to 4.86) (p<0.0001) for those treated with placebo. In addition, the 12-month OS in the Opdivo group was 26.6% (95% CI: 21.1 to 32.4) versus 10.9% (95% CI: 6.2 to 17.0) in the placebo group. Patients treated with Opdivo also experienced an objective response rate of 11.2% (95% CI: 7.7 to 15.6) compared to 0% (95% CI: 0.0 to 2.8) with placebo and a median duration of response of 9.53 months (95% CI: 6.14 to 9.82), which were secondary endpoints.

 

AbbVie announced the FDA approved IMBRUVICA (ibrutinib) for the treatment of patients with relapsed/refractory (R/R) marginal zone lymphoma (MZL) who require systemic therapy and have received at least one prior anti-CD20-based therapy. This indication is approved under accelerated approval based on overall response rate (ORR), and continued approval may be contingent upon verification and description of clinical benefit in a confirmatory trial. IMBRUVICA is jointly developed and commercialized by Pharmacyclics, an AbbVie company, and Janssen Biotech.

 

Shire announced that the FDA has acknowledged receipt of the Class 2 resubmission of a NDA for SHP465, a long-acting, triple-bead, mixed amphetamine salts formulation. SHP465 is being evaluated as a potential once-daily treatment for Attention-Deficit/Hyperactivity Disorder (ADHD). The FDA is expected to provide a decision on or around June 20, 2017, the designated PDUFA action date. Shire resubmitted the NDA for SHP465 in response to the Approvable Letter from the FDA (May 18, 2007) that requested additional clinical studies and classified the response as a Class 2 resubmission with a review goal of six months.

 

Egalet announced the closing of the second $40 million tranche of the $80 million secured debt financing announced August 31, 2016. The second tranche was triggered by the approval from the FDA of ARYMO ER abuse-deterrent, extended-release (ER) tablets C-II on January 9, 2017. In addition, the company announced that it will issue options to purchase stock to employees in Egalet’s recently internalized salesforce. Egalet plans to use the net proceeds from this transaction to support commercialization of ARYMO ER and for general corporate purposes. Morgan Stanley acted as sole placement agent for the transaction. Additionally, Egalet has sold a royalty right to the note purchasers, representing a right to receive an aggregate 1.5% royalty on net sales of ARYMO ER.

 

QIAGEN announced details for completion of a synthetic share repurchase plan that combines a direct capital repayment with a reverse stock split. The capital repayment forms part of a commitment announced in July 2016 to return $300 million to shareholders by the end of 2017.

 

Otonomy announced the enrollment of the first patients in a Phase II clinical trial evaluating OTO-104 for the prevention of hearing loss in cancer patients undergoing chemotherapy with platinum-based agents. This multicenter trial is designed to assess the feasibility, safety and exploratory efficacy of OTO-104 given by intratympanic administration in subjects at risk for ototoxicity from cisplatin chemotherapy.

 

Catabasis Pharmaceuticals announced the publication of Phase I data on edasalonexent in adult subjects. Edasalonexent is a potential disease-modifying therapy being developed for Duchenne muscular dystrophy (DMD). The Phase I trials demonstrated that edasalonexent (CAT-1004), an oral inhibitor of NF-kB, was safe, well tolerated, and inhibited activated NF-kB in adult subjects and the data are presented in an article titled "A Novel NF-kB Inhibitor, Edasalonexent (CAT-1004), in Development as a Disease-Modifying Treatment for Patients with Duchenne Muscular Dystrophy: Phase I Safety, Pharmacokinetics, and Pharmacodynamics in Adult Subjects" in the Journal of Clinical Pharmacology (J Clin Pharmacol. 2017 Jan 11. doi: 10.1002/jcph.842.)

 

Allergan announced the approval of RHOFADE cream by the FDA for the topical treatment of persistent facial erythema (redness) associated with rosacea in adults. Approval was based on two clinical studies that evaluated the primary efficacy endpoint on day 29.

 

Adamis Pharmaceuticals announced that the FDA has accepted for review the Company’s NDA for its Epinephrine Pre-filled Syringe ("PFS") product candidate for the emergency treatment of anaphylaxis. Filed on December 15, 2016, the resubmission was intended to address the issues raised by the FDA in the agency’s June 2016 CRL. The FDA indicated that it considered the resubmission to be a complete response to the CRL.

 

Aduro Biotech announced an exclusive license agreement with Stanford University for state-of-the-art neoantigen identification technology developed by Dr. Hanlee Ji, associate professor of medicine at Stanford. Aduro will leverage its proprietary live, attenuated double-deleted Listeria (LADD) immunotherapy platform to engineer personalized LADD-based cancer therapies (pLADD) encoding multiple neoantigens identified through this technology. The company plans to initially evaluate pLADD for the treatment of cancers of the gastrointestinal tract, including colorectal cancer, with a Phase I clinical trial expected to be initiated in 2017. Pursuant to the terms of the agreement, Aduro received an exclusive license to the proprietary bioinformatics algorithms and computational workflows for neoantigen identification and selection. The accurate identification of neoantigens, tumor markers that are unique to an individual’s tumor, is believed to be critical in the development of a patient-specific cancer treatment. Aduro’s LADD technology, which has been shown in clinical studies to remodel the tumor microenvironment, will be used to create a patient-specific immunotherapy that is engineered to enable the presentation of multiple selected neoantigens in dendritic cells, with the aim of inducing a targeted, robust anti-cancer immune response.

 

Revance Therapeutics announced presentations of clinical data for DaxibotulinumtoxinA Injectable (RT002) at TOXINS 2017, the Third International Neurotoxin Association Conference, taking place at the Meliá Castilla Hotel in Madrid, Spain, January 18-21, 2017.

 

AquaBounty Technologies, a majority-owned subsidiary of Intrexon, announced that it has completed the listing of its common shares on the NASDAQ Stock Market and finalized the equity subscription from Intrexon.

 

Zynerba Pharmaceuticals announced that it intends to offer and sell, subject to market conditions, shares of its common stock in an underwritten public offering. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. In addition, Zynerba intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares of its common stock offered in the public offering.  Jefferies and Piper Jaffray are acting as joint book-running managers. Zynerba intends to use the net proceeds of the proposed offering to continue to fund the clinical development of ZYN002 and ZYN001, for research and development, and for general corporate purposes, which may include capital expenditures and funding its working capital needs.

 

Matinas BioPharma Holdings announced the successful completion of its tender offer to amend and exercise certain categories of existing warrants, which expired at 5:00 p.m. Eastern Standard Time on January 13, 2017. The gross cash proceeds from the warrant exercises were $13.5 million with net cash proceeds, after deducting warrant solicitation agent fees and other estimated offering expenses, totaling approximately $12.7 million.

 

Can-Fite BioPharma announced that it has entered into definitive agreements with institutional investors to receive gross proceeds of $5 million. In connection with the offering, the Company will issue 2,500,000 registered American Depository Shares (ADSs) of Can-Fite at a purchase price of $2.00 per ADS in a registered direct offering. Additionally, for each ADS purchased by investors, the investors will receive an unregistered warrant to purchase 50% of an ADS. The warrants have an exercise price of $2.25 per ADS, shall be exercisable six months following the issuance date and will expire five and one-half years from the issuance date. The closing of the offering is expected to take place on or about January 24, 2017, subject to the satisfaction of customary closing conditions. Rodman & Renshaw, a unit of H.C. Wainwright & Co. is acting as the exclusive placement agent in connection with this offering.

 

Anavex Life Sciences and the International Rett Syndrome Foundation, doing business as Rettsyndrome.org announced that Rettsyndrome.org has committed a financial grant of a minimum of $0.6 million to cover the majority of a planned U.S. multicenter Phase II clinical trial of ANAVEX 2-73 for the treatment of Rett syndrome.

 

InVivo Therapeutics Holdings announced that a new patient has been enrolled into The INSPIRE Study (InVivo Study of Probable Benefit of the Neuro-Spinal Scaffold for Safety and Neurologic Recovery in Subjects with Complete Thoracic AIS A Spinal Cord Injury). Travis Dumont, M.D., an INSPIRE Principal Investigator, performed the implantation on January 16, 2017, approximately 67 hours after the injury occurred.

 

The Milner Therapeutics Institute announced Pfizer as a partner to the Milner Therapeutics Consortium. Pfizer has agreed to join the Consortium, which enables the efficient transfer of materials between industry and academia and allocation of funds for partnering opportunities in Cambridge. Dr Ron Newbold, Vice President, External R&D Innovation at Pfizer, will join the Milner Innovation Board.

 

Swedish Orphan Biovitrum AB announced that the first patients have been enrolled in the A-SURE study (NCT02976753).  A-SURE is a 24-month real-world study evaluating the effectiveness of Elocta compared to conventional FVIII products in the prophylactic treatment of patients with haemophilia A in Europe.

 

Oncolytics Biotech announced that Matt Coffey PhD, MBA, has been appointed to the role of President and Chief Executive Officer, effective immediately. Dr. Coffey had been serving as the Company’s Interim President and Chief Executive Officer since early November 2016.

 

 

ANALYST RECOMMENDATIONS

 

Maxim analyst Gabrielle Zhou initiated coverage of Biolife Solutions with a “buy” rating and $3 price target, citing expectations for revenue to continue to grow as awareness builds and the cell therapy space grows.

 

Barclays analyst Geoff Meacham increased his price target of Incyte to $135 from $105, citing more value to the pipeline given recent details.

 

Bank of America/Merrill Lynch analyst Tazeen Ahmad increased her price target of Tesaro to $165 from $125, citing more robust expectations for niraparib.