BioShares Biotechnology Clinical Trials (BBC): $21.96, +$0.02, +19.3% YTD

BioShares Biotechnology Products (BBP): $36.86, +$0.02, +12.5% YTD

 

 

MARKET COMMENTARY

 

Wall Street looked set to follow European markets lower, after Britain’s Prime minister called for an early election on June 8 and as investors remained cautious ahead of Sunday’s French election. Asian stock markets closed mostly lower. On the economic front, investors will look forward to data on building permits, housing starts and manufacturing output. IBM, Yahoo and Intuitive Surgical are some of the major companies scheduled to report results after the closing bell. Oil prices slipped on news that U.S. shale oil output in May is expected to post the biggest monthly increase in more than two years, undermining efforts to cut oversupply. Gold steadied after touching five month highs in the previous session, bolstered by the dollar softening versus the yen and tensions in the Korean peninsula.

 

 

MARKET HIGHLIGHTS

 

Eiger BioPharmaceuticals announced the appointment of Lisa Porter, M.D. to lead the development of exendin 9-39 for the treatment of post-bariatric hypoglycemia (PBH).

 

Mateon Therapeutics announced interim data from its first scheduled analysis of the ongoing Phase 2/3 study (FOCUS) in patients with platinum resistant ovarian cancer (prOC). The interim analysis was conducted after the first 20 patients enrolled into the trial had been treated for at least two months or had discontinued from the trial. The analysis was conducted primarily to evaluate the safety of the triplet drug combination as well as to evaluate early signs of efficacy.  No significant safety issues were identified in the interim analysis, and the overall safety profile of CA4P was similar to or better than results seen in previous randomized trials of CA4P. Most adverse events that occurred more frequently in the CA4P-treated arm were mild to moderate in severity.

 

Valneva SE announced that it has entered into a commercial agreement with Danish biotech company Bavarian Nordic (OMX:  BAVA, OTC:BVNRY), for the production of poxvirus-based vaccines using Valneva`s EB66® cell-line technology.  The agreement grants Bavarian Nordic the rights to develop and commercialize multiple poxvirus-based vaccines on the EB66® cell-line.  Bavarian Nordic`s vaccine candidates are currently produced on chicken embryonic fibroblast (CEF) and the company will explore the potential of switching to Valneva`s EB66® technology.  Valneva will support Bavarian Nordic in establishing and optimizing the manufacturing process on EB66® for future large scale industrialization under a dedicated service agreement.

 

Arena Pharmaceuticals announced the pricing of an underwritten public offering of 60,000,000 shares of its common stock, offered at a price to the public of $1.15 per share.  The gross proceeds from the offering are expected to be $69.0 million, before deducting the underwriting discounts and commissions and offering expenses payable by Arena.  Arena has granted the underwriters a 30‑day option to purchase up to 9,000,000 additional shares of common stock. All of the shares are being offered by Arena.  The offering is expected to close on April 21, 2017, subject to customary closing conditions.  Arena anticipates using the net proceeds from the offering for clinical and preclinical development of drug candidates, for general corporate purposes, including working capital and costs associated with manufacturing services, and for capital expenditures.

 

Bioblast Pharma announced that in response to a written notification from the Listing Qualifications Department of The NASDAQ Stock Market LLC that the Company does not satisfy the Nasdaq Global Market continued listing requirement set forth in Nasdaq Stock Market Rule 5450(b)(1)(A) which requires that the company maintain a minimum of $10,000,000 in stockholders’ equity, Bioblast will transfer the listing of its ordinary shares to the Nasdaq Capital Market, which requires a minimum of $2,500,000 in stockholders’ equity for continued listing.

 

Aurinia Pharmaceuticals announced that it has signed a Definitive Agreement granting Merck Animal Health, known as MSD Animal Health outside of the United States and Canada, worldwide rights to develop and commercialize Aurinia’s patented nanomicellar voclosporin ophthalmic solution (VOS) for the treatment of dry eye syndrome in dogs.  Under the terms of this agreement Aurinia will receive an upfront payment and is eligible to receive further payments based on certain development and sales milestones.  Furthermore, Aurinia will receive royalties based on global product sales. Merck Animal Health will be responsible for the remaining clinical development and commercialization of VOS for use in the animal health field, while Aurinia retains all human health rights. The companies will share in the final work product and any technical knowledge that may be generated during the collaboration.

 

GeNeuro announced today the initiation of a Phase 2a clinical study in Australia with GNbAC1 in patients with Type 1 diabetes (T1D). GNbAC1 is a monoclonal antibody designed to neutralise MSRV-Env, a pathogenic protein that has been detected in the pancreas of T1D patients. GeNeuro is already evaluating GNbAC1 in Phase 2 clinical studies in patients with multiple sclerosis (MS), a disease in which evidence shows MSRV-Env to be a potential causal factor.

 

Reuters reported that Johnson & Johnson reported quarterly revenue that missed estimates due to slowing pharmaceutical sales, but the company, which is in the process of closing its $30 billion acquisition of Actelion, raised its 2017 forecast. The company raised its 2017 forecast to reflect the Actelion acquisition, which is expected to close in the second quarter. J&J raised its sales expectations to $75.40 billion-$76.10 billion and adjusted profit to $7.00-$7.15 per share. The diversified healthcare company said sales rose to $17.77 billion in the first quarter from $17.48 billion a year earlier, but came in below analysts’ average estimate of $18.04 billion, according to Thomson Reuters I/B/E/S. Net earnings in the first quarter were $4.42 billion, or $1.61 per share, compared with $4.46 billion, or $1.59 per share, in the year-earlier period. Excluding items, J&J earned $1.83 per share, beating Street expectations of $1.77, helped by lower operating expenses and taxes.

 

XOMA announced the presentation of positive data from pre-clinical studies investigating the activity of its anti-PTH1R antagonist monoclonal antibody (mAb). The antibody is a potential first-in-class therapeutic agent for the treatment of hyperparathyroidism (HPT) and humoral hypercalcemia of malignancy (HHM). These presentations were made at the American Association for Cancer Research (AACR) and the Endocrine Society (ENDO) annual meetings.

 

Rigel Pharmaceuticals announced that it has submitted a NDA to the FDA for fostamatinib in patients with chronic and persistent immune thrombocytopenia (ITP).

 

Biocept announced that it has been awarded Japanese Patent No. 6081434 entitled, DEVICES AND METHODS OF CELL CAPTURE AND ANALYSIS. The issued patent covers the use of antibodies for the capture of any target of interest from any sample type on a device surface. This includes CTCs, as well as other targets of interest such as sub-cellular vesicles and exosomes that are shed by solid tumors into the blood stream. This patent is broader than previously issued patents owned by the Company, and is the nineteenth patent issued to Biocept related to its core liquid biopsy technology.

 

Protalix BioTherapeutics announced new, promising results from a preclinical trial conducted in collaboration with Prof. Raphael Schiffmann, Director, Institute of Metabolic Disease at the Baylor Research Institute, Dallas, Texas.  It was demonstrated that treatment of Fabry mice with pegunigalsidase alfa (PRX-102) slows the progression of small fiber neuropathy when compared to treatment of Fabry mice with currently approved enzyme replacement therapies, and when compared to untreated Fabry mice.

 

RedHill Biopharma announced that it has received notices of allowance from the USPTO for two new patents covering BEKINDA (RHB-102)(1). Once granted, the patents are expected to be valid until at least 2034.

 

Lion Biotechnologies highlighted that a publication in the journal Science provided new translational data from a clinical trial of TIL therapy for the treatment of advanced metastatic cervical cancer conducted at the Surgery Branch of the National Cancer Institute (NCI). This trial has been supported in part by Lion under a Cooperative Research and Development Agreement (CRADA) with Dr. Steven Rosenberg, Chief of the Surgery Branch, National Cancer Institute (NCI), National Institutes of Health.

 

Allergan announced that it has entered into a clinical trial agreement with Novartis to conduct a Phase IIb study, using Allergan’s cenicriviroc (CVC) and Novartis’ lead FXR agonist for the treatment of non-alcoholic steatohepatitis (NASH). The Phase IIb study will assess the safety, efficacy and tolerability of this multi-therapy treatment approach for NASH.  The financial details of this transaction are not disclosed.

 

Novartis announced that the FDA has granted Breakthrough Therapy designation to CTL019, an investigational chimeric antigen receptor T cell (CAR-T) therapy, for the treatment of adult patients with relapsed and refractory (r/r) diffuse large B-cell lymphoma (DLBCL), who have failed two or more prior therapies. This is the second indication for which CTL019 has received this designation; the first being for the treatment of r/r B-cell acute lymphoblastic leukemia (ALL) in pediatric and young adult patients.

 

HitGen announced that the company has entered into a multi-year research collaboration and license agreement with Pfizer to build and screen novel DNA-encoded libraries (DELs) in order to potentially discover unique small molecule leads to be used in drug development. Through the collaboration, HitGen and Pfizer scientists will apply HitGen’s advanced technology platform and research capabilities in the design, synthesis, and screening of multiple proprietary DELs for Pfizer’s drug discovery efforts. In addition, HitGen will screen their own DELs, consisting of billions of compounds, against a selected number of Pfizer’s therapeutic targets. Novel lead compounds from the HitGen DELs will be licensed exclusively to Pfizer for further research and development. Pfizer will fund the research at HitGen.

 

Egalet announced that the submission of a prior approval supplement (PAS) for OXAYDO (oxycodone HCl, USP) tablets C-II, seeking approval of 10 mg and 15 mg dosage strengths, has been  accepted for filing by the FDA.  The submission is based on a pharmacokinetic study demonstrating bioequivalence (BE) of OXAYDO to its reference drug, Roxicodone (oxycodone hydrochloride tablets USP) at the 15 mg dosage strength.

 

Enzyvant announced that the FDA has granted RVT-802, Enzyvant’s investigational tissue-based therapy for the treatment of complete DiGeorge Syndrome (cDGS), Breakthrough Therapy designation as well as Regenerative Medicine Advanced Therapy (RMAT) designation. Both designations confer special access to the Office of Tissues and Advanced Therapies for development guidance as well as expedited review pathways.

 

Sucampo Pharmaceuticals announced the publication of a new study in an independent scientific journal that confirms the unique composition of VTS-270, a 2-Hydroxypropyl-beta-cyclodextrin (HPβCD) product under investigation as a novel treatment for Niemann-Pick Disease Type C1 (NPC-1). In this study, researchers demonstrated that VTS-270 has a low degree of consistently specific hydroxypropylation, or degree of substitution (DS), as well as a low level of doubly charged hetero-dimers as seen through an ion mobility false color representation, or heat map. The analysis was based on ion distribution and abundance profiles using mass spectrometry methodology as a means for assessing key molecular activity.

 

Ionis Pharmaceuticals announced a collaboration and license agreement with Suzhou Ribo Life Science Co., Ltd. (Ribo) to develop and commercialize RNA-targeted therapeutics in China. Ionis granted Ribo a license for the right to commercialize in China two Ionis Generation 2+ antisense drugs in metabolic disease and cancer and an option to license a third pre-specified Generation 2+ antisense drug. In addition, Ribo will be responsible for conducting a multi-year research and drug discovery program to identify drugs that utilize Ionis’ ssRNAi technology. Ionis will receive an undisclosed up-front payment and equity in Ribo. Ionis retains the rights to develop and commercialize ssRNAi technology and all drugs under the collaboration outside of China.

 

Prometic Life Sciences announced that it has received concurrence from the FDA on the design of the first of its PBI-4050’s planned Phase II/III clinical trials for IPF based on the efficacy data generated in the recently completed 40 patient Phase II open-label study.

 

RXi Pharmaceuticals announced that Gerrit Dispersyn, Dr. Med Sc. has been appointed as RXi’s Chief Development Officer effective April 24, 2017.   Dr. Dispersyn will bring a wealth of experience to RXi in both clinical and product development.

 

Antibe Therapeutics provided an update on its clinical development program for ATB-346, its lead drug that targets the global need for a safer drug for chronic pain and inflammation.

 

Regen BioPharma, in conjunction with its medicinal chemistry partner, ChemDiv, has identified three new series of compounds that activate NR2F6. These compounds are small molecules and were identified using Regen’s patented screening methodology and unique chemical libraries.

 

BioSpecifics Technologies announced that it has initiated an open-label, dose escalation Phase I clinical trial of XIAFLEX for the treatment of uterine fibroids.

 

Evoke Pharma announced that the Company has reached an agreement to work in partnership with Spaulding Clinical Research for its planned comparative exposure pharmacokinetic (PK) trial for its lead product candidate, Gimoti, a patented nasal delivery formulation of metoclopramide for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in adult women. The pivotal PK trial conducted in healthy volunteers is designed to establish bioequivalence with the listed drug, Reglan Tablets, and may serve as a basis for the 505(b)(2) NDA planned for submission to the FDA.

 

Imprimis Pharmaceuticals and Cameron Ehlen Group, d/b/a Precision Lens ("Precision Lens"), announced the signing of a three-year exclusive sales representation agreement.  Under the agreement, Precision Lens will deploy a dedicated sales team to introduce Imprimis’ ophthalmic portfolio into select geographies in the U.S., primarily focused in 13 states in the U.S. Midwest.

 

Cellectar Biosciences announced the Japanese Patent Office has granted a method of use patent for two of the company’s phospholipid drug conjugates (PDCs), CLR 131, the company’s lead compound, and CLR 125, each in combination with radiation and/or other therapies to treat cancer stem cells. CLR 125 is a radiotherapeutic isotope conjugated to the company’s proprietary PDC delivery platform, which may be uniquely suited to treat select cancer and micro-metastatic disease.

 

Galapagos announced the pricing of its U.S. public offering totaling $338 million gross proceeds of 3,750,000 new ordinary shares in the form of ADSs at $90 per ADS, before underwriting discounts. In addition, Galapagos has granted the underwriter an option to purchase up to an additional 562,500 ADSs, representing 15% of the ADSs placed in the offering. This option can be exercised during the 30 day period commencing 17 April 2017. The closing of the offering is expected to occur on 21 April 2017, subject to customary closing conditions. Each of the ADSs offered in the offering represents the right to receive one ordinary share. Morgan Stanley is acting as sole book-running manager for the proposed offering.

 

Agios Pharmaceuticals announced that it is offering to sell, subject to market and other conditions, up to 4.5 million shares of its common stock in an underwritten public offering. Agios also intends to grant the underwriters a 30-day option to purchase from it up to an additional 15% of the shares of common stock offered in the public offering. The proceeds of the offering are expected to be used to fund the company’s research, clinical development and pre-commercial activities. J.P. Morgan Securities and Goldman Sachs & Co. are acting as joint book-running managers for the offering.Cowen and Company is serving as lead manager.

 

Audentes Therapeutics announced that it intends to offer and sell 4,750,000 shares of its common stock in an underwritten public offering. In addition, Audentes intends to grant the underwriters a 30-day option to purchase up to an additional 712,500 shares of common stock. BofA Merrill LynchCowen and Company and Piper Jaffray are acting as joint book-running managers for the offering. Wedbush PacGrow is acting as a co-manager.

 

Axovant Sciences announced the closing of its underwritten public offering of 7,753,505 of its common shares at a price to the public of $18.54 per common share, including 1,011,326 common shares sold pursuant to the underwriters’ exercise in full of their option to purchase additional common shares. Gross proceeds to Axovant from the offering were approximately $143.7 million, before deducting underwriting discounts and commissions and estimated offering expenses. J.P. MorganMorgan Stanley and Jefferies acted as joint book-running managers for the offering. JMP SecuritiesBaird and H.C. Wainwright & Co. acted as co-managers.

 

 

ANALYST RECOMMENDATIONS

 

Following the news of the FDA’s Complete Response Letter to the baricitinib NDA, UBS analyst Carter Gould decreased his price target of Incyte to $136 from $140.

 

Canaccord analyst Mark Massaro increased his price target of Quidel to $24 from $22, citing Quidel likely just wrapped up its strongest February and March in the company’s history.

 

Deutsche Bank analyst Gregg Gilbert revised his price target for the following companies, citing lower 1Q17EPS estimates: Mylan to $51 from $52; Perrigo to $86 from $87; Valeant to $18 from $19.

 

SunTrust analyst Yatin Suneja initiated coverage of Global Blood Therapeutics with a “buy” rating and $56 price target, citing shares should outperform on clinical and regulatory newsflow.

 

Credit Suisse analyst Alethia Young assumed coverage of the following companies from Kennen MacKay: Acceleron with an “outperform” rating and $46 price target; Agios with an “outperform” rating and $61 price target; AnaptysBio with an “outperform” rating and $34 price target; BioMarin with an “outperform” rating and $112 price target; Clovis with an “outperform” rating and $74 price target; Incyte with an “outperform” rating and $174 price target; ObsEva with an “outperform” rating and $27 price target; Puma Biotechnology with an “outperform” rating and $58 price target; Ra Pharmaceuticals with an “outperform” rating and $19 price target; OvaScience with an “underperform” rating and $1 price target.