BioShares Biotechnology Clinical Trials (BBC): $18.89, -$0.26, +2.6% YTD

BioShares Biotechnology Products (BBP): $34.05, -$0.34, +4.0% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were little changed after early moves by President Donald Trump highlighting a protectionist stance on trade gave investors cause to rethink the post-election rally. Shares of Alcoa, Texas Instruments, 3M and Capital One Financial will be watched as they report quarterly results later in the day. Markit manufacturing PMI and existing home sales data are on the economic calendar. Upbeat economic data supported European shares and Asian markets closed mostly higher. Oil prices rose as OPEC’s output cut drained stocks, though analysts said higher output could eventually limit gains. Gold slipped from a two-month peak as the dollar recovered.

 

 

MARKET HIGHLIGHTS

 

MediciNova announced that the medical journal Neuropsychopharmacology has published a new article on MN-166 (ibudilast) written by Dr. Lara Ray and colleagues at the University of California, Los Angeles.  The article reports that MN-166 (ibudilast) was associated with mood improvements on the stress- and alcohol-cue exposures, as well as reductions in overall craving, depression and anxiety for alcohol in subjects diagnosed with alcohol use disorder (AUD).  Moreover, in the subjects that had higher depressive symptomatology, MN-166 (ibudilast) reduced the stimulant and mood-altering effects of alcohol compared to placebo.

 

Dow Jones reported that Johnson & Johnson posted revenue and profit increases, but the health-care giant released an underwhelming forecast for the year. The company said it expects earnings for the year of $6.93 to $7.08 a share and revenue of $74.1 billion to $74.8 billion. Analysts polled by Thomson Reuters said expected earnings per share of $7.11 on revenue of $75.1 billion. Chief Executive Alex Gorsky said revenue and profit gains were driven by its pharmaceutical and medical device businesses and that its consumer unit had increased profitability. The company also said it was evaluating potential strategic options, including a potential sale, for its diabetes care companies, including LifeScan Inc., Animas Corp. and Calibra Medical Inc. In total, its diabetes care unit had $462 million in sales in the quarter, a 3.8% decline.  In all for the December quarter, J& J posted a profit of $3.81 billion, or $1.38 a share, up from $3.22 billion, or $1.15 a share, in the same period a year before. Revenue rose 1.7% to $18.12 billion. Excluding certain items, adjusted earnings were $1.58 a share. Analysts had expected $1.56 in adjusted profit per share and revenue of $18.28 billion.

 

Intrexon announced that it has entered into a definitive agreement to acquire GenVec. Pursuant to the definitive agreement, upon the closing of the transaction GenVec stockholders will receive 0.297 of a share of Intrexon Common Stock in exchange for each share of GenVec common stock. This exchange ratio represents $7.00 per share of GenVec’s common stock based on Intrexon’s 5-day volume weighted average price as of January 23, 2017. GenVec stockholders will also receive a right to contingent consideration equal to 50% of any milestone or royalty payments received within 36 months after the closing of the transaction under GenVec’s Research Collaboration and License Agreement with Novartis. Consummation of the acquisition is subject to customary closing conditions, including GenVec stockholder approval, and is expected to occur in the second quarter of 2017.

 

TG Therapeutics announced that the FDA has granted orphan drug designation covering the combination of TG-1101 (ublituximab), the Company’s novel, glycoengineered anti-CD20 monoclonal antibody, and TGR-1202 the Company’s oral, next generation PI3K delta inhibitor, for the treatment of patients with diffuse large B-cell lymphoma (DLBCL). The combination of TG-1101 and TGR-1202 is currently being evaluated in the UNITY-DLBCL Phase IIb Trial for patients with relapsed or refractory DLBCL as well as the UNITY-CLL Phase III Trial for patients with both frontline and previously treated chronic lymphocytic leukemia (CLL).

 

Asterias Biotherapeutics announced positive efficacy results from the company’s ongoing SCiStar Phase I/IIa clinical trial that showed additional motor function improvement at 6-months and 9-months following administration of 10 million AST-OPC1 cells in AIS-A patients with complete cervical spinal cord injuries (SCI).

 

Flex Pharma announced that it is prioritizing its clinical programs in the severe neurological diseases of amytrophic lateral sclerosis (ALS), multiple sclerosis (MS) and peripheral neuropathies such as Charcot-Marie Tooth (CMT). The Company intends to initiate one or two additional proof-of-concept Phase II studies in these indications in the US this year with FLX-787, its transient receptor potential (TRP) ion channel activator, formulated as an oral disintegrating tablet. In late 2016, the Company began enrolling MS and ALS patients in two separate exploratory Phase II studies in Australia. These randomized, controlled, blinded, cross-over studies are designed to evaluate the safety and efficacy of FLX-787 in patients who suffer from cramps and spasticity as a consequence of their disease. The Company expects to report results from the exploratory MS study by year end 2017.

 

Therabron Therapeutics announced that the EMA Committee for Orphan Medicinal Products has granted Orphan Drug Designation for Therabron’s CG367 program, indicated for the treatment of Bronchiolitis Obliterans Syndrome (BOS).

 

Genentech, a member of the Roche Group, announced that the FDA has accepted the company’s sBLA for Actemra (tocilizumab) for the treatment of GCA, a chronic, potentially life-threatening autoimmune condition. The FDA also granted Priority Review Designation for Actemra for the treatment of GCA. The designation is based on the positive outcome of the Phase III GiACTA study evaluating Actemra in people with GCA. Results showed that Actemra, initially combined with a six-month steroid (glucocorticoid) regimen, more effectively sustained remission through one year compared to a six- or 12-month steroid taper regimen given alone in people with GCA.

 

ProMetic Life Sciences announced that its orally active lead drug candidate, PBI-4050, has been issued a Promising Innovative Medicine designation by the UK Medicines and Healthcare Products Regulatory Agency for the treatment of Alström Syndrome.

 

Trovagene announced the publication of study results in Clinical Cancer Research, demonstrating the analytical and clinical performance of Trovera urine and blood liquid biopsy tests to quantitatively assess KRAS mutations in patients with diverse advanced cancers. This data was also featured as a presentation at the 2017 Gastrointestinal Cancers Symposium on January 21(st) in San Francisco, CA.

 

InVivo Therapeutics Holdings announced that the patient enrolled in December in the INSPIRE study of the Neuro-Spinal Scaffold has improved from a complete AIS A spinal cord injury to an incomplete AIS B spinal cord injury in the time between discharge and the one-month evaluation. This is the sixth out of the eleven patients (54.5% conversion rate) in follow-up to have had an AIS grade improvement. Two patients who have not yet converted are early in follow-up, with conversion possible before the six-month endpoint. The INSPIRE conversion rate is considerably higher than rates observed in a range of SCI natural history databases.

 

Cellectar Biosciences announced that the USPTO has granted patent number 9,550,002, which covers method of use for the company’s lead compound, CLR 131, as well as CLR 125, for the treatment of cancer. The granting of this patent follows the company’s previous announcement of patent allowances for the use of the company’s phospholipid drug conjugate (PDC) delivery platform in these tumor types.

 

Propanc Health Group announced an update on the progress of additional pending patent applications, since the recent allowance of the Company’s first key patent application in the US this year.

 

Perrigo announced it has received FDA approval for its first-to-file ANDA referencing Taro Pharmaceuticals USA‘s Topicort Spray, 0.25% (desoximetasone topical spray, 0.25%). Prior patent litigation between the companies has been settled on confidential terms.

 

Aptuit announced the start of a collaboration with the Molecular Surgical Laboratory of Massachusetts General Hospital, directed by Dr. Laurence Rahme, aimed at the identification and validation of novel targets in Gram-negative bacteria.  Aptuit hopes that innovative approaches can address antibiotic resistance in the treatment of serious infections.

 

ProMetic Life Sciences announced that its orally active lead drug candidate, PBI-4050, has been issued a Promising Innovative Medicine designation by the UK Medicines and Healthcare Products Regulatory Agency for the treatment of Alström Syndrome.

 

Enanta Pharmaceuticals announced that AbbVie’s MAA for its investigational, pan-genotypic regimen of glecaprevir (ABT-493)/pibrentasvir (ABT-530) (G/P) for the treatment of all major chronic hepatitis C virus (HCV) genotypes, has been validated by the EMA and is now under accelerated assessment. If approved, G/P may provide shorter treatment duration for patients infected with any of HCV genotypes 1-6 (GT1-6) and without cirrhosis, who represent the majority of HCV patients. G/P is also intended to provide an additional treatment option to patients with compensated cirrhosis (Child Pugh A) and to address the needs of patients with specific treatment challenges, including those with severe chronic kidney disease (CKD) and those not cured with previous direct-acting-antiviral (DAA) treatment.

 

Neuronascent’s U.S. Patent No. 9,539,261, which issued on January 10, 2017, claims methods of stimulating neurogenesis and/or inhibiting neuronal degeneration using Neuronascent’s novel compounds to treat numerous neurological conditions in humans, including Alzheimer’s disease, Parkinson’s disease, post-traumatic stress disorder, depression, and psychiatric disorders. This patent expands Neuronascent’s scope of patent protection to several new groups of compounds that have the potential to substantially improve treatments for patients suffering from neurological conditions.

 

Genmab A/S announced that worldwide net sales of DARZALEX (daratumumab) as reported by Johnson & Johnson were USD 572 million in 2016.  Net sales were USD 471 million in the U.S. and net sales in the rest of the world were USD 101 million. Genmab will receive royalties on the worldwide net sales of DARZALEX under the exclusive worldwide license to Janssen Biotech to develop, manufacture and commercialize DARZALEX.

 

Applied Genetic Technologies announced that it has entered into a strategic research and development collaboration with Bionic Sight. Through the AGTC-Bionic Sight collaboration, the companies seek to develop a new optogenetic therapy that leverages AGTC’s deep experience in gene therapy and ophthalmology and Bionic Sight’s innovative neuro-prosthetic device and algorithm for retinal coding.

 

BioAmber announced that, due to strong demand, the underwriters have agreed to increase the size of the offering by 75% and purchase 3,684,212 shares of common stock of the Company, together with warrants to purchase 1,842,106 shares of common stock of the Company with an exercise price of US$5.50 per share of common stock (the "Exercise Price"), at a price to the public of US$4.75 per share and associated warrant (the "Public Price"). The warrants have a term of four (4) years, exercisable upon the date of issuance. The aggregate gross proceeds to the Company (assuming no exercise of the warrants) are US$17,500,000, before deducting underwriting discounts and commissions and estimated offering expenses.  A portion of this offering has been placed in Canada on a private placement basis.  All shares of common stock issued in connection with this offering, including those placed in Canada on a private placement basis, will be listed on the New York Stock Exchange and be freely tradable on such exchange.

 

M Pharmaceutical announced as part of its planned acquisition of 40 J’s, that it will immediately seek marketing and distribution partnerships for the patented and proprietary topical products for the relief of menopausal symptoms that will be part of the assets being acquired.  There are approximately 65 million women in North America currently nearing or experiencing menopause.

 

Cascadian Therapeutics announced the pricing of the previously announced concurrent but separate underwritten offerings of 23,182,000 shares of its common stock at a price to the public of $3.30 per share, for expected gross proceeds of approximately $76.5 million and 1,818 shares of its Series E convertible preferred stock at a price to the public of $3,300 per share, for expected gross proceeds of approximately $6.0 million. Each share of Series E convertible preferred stock is non-voting and convertible into 1,000 shares of Cascadian Therapeutics common stock, provided that conversion will be prohibited if, as a result, the holder and its affiliates would beneficially own more than 19.99% of the common stock then outstanding. As part of the common stock offering, Cascadian Therapeutics granted the underwriters a 30-day option to purchase 3,477,300 additional shares of Cascadian Therapeutics common stock. The offerings are being conducted as separate public offerings by means of separate prospectus supplements, and neither offering is contingent upon the consummation of the other. Aggregate gross proceeds from the offerings, before deducting underwriting discounts, commissions and estimated expenses, are expected to be approximately $82.5 million. Cascadian Therapeutics plans to use the net proceeds from these offerings to fund the tucatinib HER2CLIMB pivotal trial, to support the development of tucatinib in other indications through Company or investigator-sponsored trials, as well as for working capital and other general corporate purposes. The offerings are expected to close on or about January 27, 2017, subject to customary closing conditions. Cowen and Company and Barclays Capital are acting as joint book-running managers. Raymond James & Associates is acting as the lead manager and BTIG is acting as a co-manager in the offerings.

 

Pfenex announced that Dr. Bertrand C. Liang has resigned his position as Chief Executive Officer, President, Secretary and as a member of the Board of Directors of the Company. Patrick K Lucy, currently the Company’s Chief Business Officer has been appointed to serve as Interim Chief Executive Officer, President, and Secretary. The Board of Directors has formed a search committee consisting of select independent directors to initiate an executive search for a replacement CEO.

 

Ocular Therapeutix announced the pricing of a registered underwritten public offering of 3,571,429 shares of its common stock at a public offering price of $7.00 per share pursuant to a shelf registration statement that was previously filed with and declared effective by the SEC. All of the shares in the offering are to be sold by the Company. Cantor Fitzgerald & Co. is acting as the sole bookrunner for the offering. The offering is expected to close on or about January 27, 2017, subject to customary closing conditions.

 

 

ANALYST RECOMMENDATIONS

 

LifeSci Capital analyst David Sherman initiated research coverage of La Jolla Pharmaceutical Company.

 

Roth analyst Michael Higgins re-initiated the following companies: AmpliPhi Biosciences with a “buy” rating and $3 price target; Palatin Technologies with a “buy” rating and $1.50 price target.

 

Jefferies analyst Biren Amin downgraded NantKwest to “hold” from “buy” and decreased his price target to $6 from $30, citing increased risks, delayed timelines and reprioritization of certain programs.

 

Citi analyst Robyn Karnauskas upgraded Calithera Biosciences to “neutral” from “sell,” and increased her price target to $5 from $1, citing management appears more open to partnering, Arginase Phase I data at ASCO’17 and CB-839/Nivolumab data in 2H17 could open up I/O space, and updated guidance indicates longer cash runway.

 

Baird analyst Michael Ulz upgraded Amicus to “outperform” from “neutral” and increased his price target to $10 from $7, citing recent regulatory clarity for Galafold in the US and a strengthening of the balance sheet removes two key overhangs, enabling focus to shift back to the pipeline.

 

Goldman analyst Keyur Parekh revised his price target of the following companies: Shire increased to 6,800p from 6,300p; Novo Nordisk increased to DKK330 from DKK310; GlaxoSmithKline increased to 1,850p from 1,800p; Merck KGaA increased to €105 from €99; Roche decreased toCHF350 from CHF355; Sanofi decreased to €81 from €83; AstraZeneca decreased to 3,900p from 4,000p; Bayer decreased to €120 from €129; Novartis decreased to CHF74 from CHF85.

 

BTIG analyst Sean Lavin revised his price target for the following companies: Avinger decreased to $4 from $6; Exact Sciences increased to $24 from $22; Insulet increased to $47 from $42; NeoGenomics increased to $12 from $10; NxStage Medical increased to $33 from $29; ViewRay increased to $7 from $6.