BioShares Biotechnology Clinical Trials (BBC): $19.08, -$0.04, -34.3% YTD

BioShares Biotechnology Products (BBP): $34.05, +$0.38, +10.5% YTD

 

 

MARKET COMMENTARY

 

U.S. stock futures were flat in thin pre-Christmas trade, a day after Dow ended just 25 points shy of its 20,000 mark. Existing home sales data is on the economic radar. The dollar retreated from 14-year high, giving back some of the gains made since the Nov. 8 U.S. presidential elections, while gold advanced. Spanish and Italian financial stocks weighed on European shares, but M&A activities helped the markets to stay closer to its highest level in 11-months. Nikkei edged down as investors booked profit after the market hovered at more than one-year highs, while rest of Asian markets ended on a mixed note. Oil rose fueled by expectation of a fall in U.S. crude inventories.

 

 

MARKET HIGHLIGHTS

 

MediciNova announced that the European Commission has granted Orphan Medicinal Product Designation for MN-166 (ibudilast) for the treatment of amyotrophic lateral sclerosis (ALS). OMPD offers potential benefits including protocol assistance, fee reductions, and 10-year market exclusivity once the medicine is on the market in Europe.

 

TiGenix NV has exercised the option granted by Takeda under the licensing agreement to make a €10 million equity investment in TiGenix. Takeda Pharmaceuticals International AG will be subscribing 11,651,778 new ordinary shares (the "New Shares") at an issue price of €0.858 (rounded) per New Share. The issue price is equal to the average closing price of TiGenix’s share on Euronext Brussels over the 30-day period preceding the date on which the issuance of the New Shares commenced (i.e., December 20, 2016) and represents a 23% premium over today’s closing price on Euronext Brussels.

 

CTD Holdings announced its filing of a Clinical Trial Application with Italy’s drug regulator, the Agenzia Italiana del Farmaco. The CTA describes CTD’s phase I/II clinical plans to administer Trappsol® Cyclo™ intravenously to patients in Italy as young as two years old and into adulthood.  The study is a randomized double blind parallel group study to examine the safety and tolerability of three doses of Trappsol Cyclo, and effects of Trappsol Cyclo on the body as well as how the body metabolizes the drug. Three doses will be examined: 1500 mg/kgBW; 2000 mg/kgBW; and 2500 mg/kgBW. Outcome measures will include markers of cholesterol synthesis and cholesterol degradation, and clinical assessments on swallowing, lung function, cognitive ability, and fine motor skills.

 

AzurRx BioPharma announced that in partnership with Mayoly Spindler, a European pharmaceutical company, that the first three patients in the Phase IIa clinical trial with MS1819-SD for patients with exocrine pancreatic insufficiency (EPI) caused by chronic pancreatitis (CP) have been enrolled.  The open-label, dose escalation Phase II study is being conducted in two sites in Australia, The Royal Adelaide Hospital and Linear Clinical Research in Perth, as well as two sites in New Zealand, P3 Research in Wellington and CCST in Christchurch.  The study is projected to complete 12-15 patients with EPI caused by chronic pancreatitis over the next several months.

 

BioInvent International AB announces that it has entered into a cancer immunotherapy research collaboration and license agreement with Pfizer Inc. ("Pfizer") (PFE) to develop antibodies targeting tumour-associated myeloid cells.  Under the terms of the deal, Pfizer will pay BioInvent approximately $10 million in early payments, including an upfront payment, early research funding, and a $6 million equity investment in new shares of BioInvent at a subscription price of SEK 2.56 per share, which corresponds to an approximately 30% premium to the average volume weighted price for the share during the 10 trading days prior to 21 December 2016.

 

Incyte and Merus announced that they have entered into a global, strategic collaboration agreement focused on the research, discovery and development of bispecific antibodies utilizing Merus’ proprietary Biclonics technology platform. The Collaboration and License Agreement grants Incyte the exclusive rights for up to eleven bispecific antibody research programs, including two of Merus’ current preclinical immuno-oncology discovery programs. Under the terms of the collaboration, Incyte has agreed to pay Merus an upfront payment of $120 million. In addition, Incyte has agreed to purchase 3.2 million shares of Merus stock at $25 per share, for a total equity investment of $80 million.

 

Lexicon Pharmaceuticals announced that its pivotal inTandem2 Phase III clinical trial of sotagliflozin met its primary endpoint, showing a statistically significant reduction in A1C at 24 weeks in patients with type 1 diabetes on optimized insulin therapy. Top-line results from the Phase III study showed that patients treated with sotagliflozin had mean A1C reductions from baseline of 0.39% on 200mg once daily sotagliflozin dose (p<0.001) and 0.37% on 400mg once daily sotagliflozin dose (p<0.001) as compared to a reduction of 0.03% on placebo after 24 weeks of treatment, meeting the study’s primary endpoint.  This statistically significant and clinically meaningful improvement in A1C for both doses of sotagliflozin was achieved with a favorable overall safety profile in the study, including rates of severe hypoglycemia similar to placebo and low overall rates of diabetic ketoacidosis (DKA).

 

Inovio Pharmaceuticals announced its DNA-based Zika vaccine (GLS-5700) generated robust antigen-specific antibody responses in a first-in-man, multi-center Phase I trial. In initial testing, Zika-naïve subjects in both low dose and high dose vaccine groups demonstrated Zika antigen-specific antibody responses after one or two vaccinations. In addition, the vaccine was well tolerated and no significant safety concerns were noted in any of the 40 subjects out to 14 weeks from initiation of dosing, the latest available data from the study.

 

Merrimack Pharmaceuticals announced that, following a recent independent Data and Safety Monitoring Board (DSMB) recommendation and subsequent futility analysis, it has decided to stop the Phase II HERMIONE study of MM-302 (HER2 antibody-targeted liposomal doxorubicin) in HER2-positive metastatic breast cancer patients who had previously been treated with trastuzumab (Herceptin®), pertuzumab (Perjeta) and ado-trastuzumab emtansine (T-DM1, Kadcyla).

 

Bristol-Myers Squibb and Calithera Biosciences announced a clinical trial collaboration to evaluate Bristol-Myers Squibb’s Opdivo in combination with Calithera’s CB-839 in patients with clear cell renal cell carcinoma (ccRCC). CB-839 is an orally administered glutaminase inhibitor currently in Phase I/II clinical studies.

 

Galapagos NV reported topline results from its SAPHIRA 1 Phase II study in cystic fibrosis patients with potentiator GLPG1837. The SAPHIRA 1 trial included 26 patients with the G551D mutation in CFTR each receiving three sequential doses of GLPG1837. Of these, 25 patients were on stable Kalydeco treatment at screening and agreed to a one week washout prior to the start of dosing GLPG1837. One patient was naïve to Kalydeco. All subjects received GLPG1837 125 mg bid (twice-daily) for 7 days, immediately followed by 250 mg bid for 7 days and subsequently by 500 mg bid for 14 days. A statistically significant dose dependent decrease in sweat chloride concentration was observed. At the 500 mg bid dose, sweat chloride decreased from a mean value of 98 mmol/L at baseline to 66 mmol/L (p <0.0001). For those patients exceeding the predicted target concentration, sweat chloride changed from a mean value of 94 mmol/L at baseline to 52 mmol/L. 25 patients were on stable treatment with Kalydeco prior to this study. For these patients, mean percent predicted FEV1 (ppFEV1) levels were 74% at screening (prior to Kalydeco washout). The one week wash-out resulted in a 5.4% mean decrease in absolute ppFEV1. At the end of treatment with GLPG1837, the ppFEV1 levels returned to the Kalydeco pre-washout levels. Overall GLPG1837 was well tolerated, with observed treatment emergent adverse events being predominantly mild or moderate, and typical for a CF patient population. One patient dropped out of the study due to an increase in non-cardiac creatine phosphokinase.

 

Advanced Accelerator Applications announced that following the issuance of a previously disclosed Discipline Review Letter (DRL) in November, the FDA has issued a CRL regarding the NDA for Lutathera for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs) in adults.

 

Can-Fite BioPharma announced it has received its first payment of $500,000 from Chong Kun Dang Pharmaceuticals (CKD) (Korean Stock Exchange: 185750.KS). Can-Fite recently announced entering a distribution agreement with CKD for the exclusive right to distribute Namodenoson (CF102) for the treatment of liver cancer in South Korea, upon receipt of regulatory approvals, for up to $3,000,000 in upfront and milestone payments, plus royalties on net sales of 23%.

 

Oasmia Pharmaceutical presented positive results from a recently completed dose-finding study of weekly administration of Apealea (Paclical). The study included 48 patients with metastatic breast cancer that were treated weekly with Apealea (Paclical) starting at 100 mg/m(2) and increasing in steps of 10 mg/m(2) until 250 mg/m(2) was reached. The pre-defined, dose-limiting toxicity as defined in the study protocol was not reached until 250 mg/m(2) per week. An overall analysis of all adverse events recorded in the study defined 180 mg/m(2) as the level for dose-limiting toxicity. The suggested dose for further development of weekly administration of Apealea is 170 mg/m(2) . 29 patients continued in a follow-up study for an additional one (1) to 22 weekly cycle(s). Efficacy was assessed through computed tomography in 26 patients: one (1) had complete response, two (2) partial responses, and 23 stable disease. The remaining three (3) patients left the study due to progressive disease. The safety assessments of the follow-up study confirmed the dose of 170 mg/m(2) as suitable for further development.

 

Invitae announced the availability of 24 new and 19 expanded genetic test panels, allowing clinicians to gain information on 183 new genes with clinical and diagnostic significance. This launch represents a significant expansion of the company’s pediatric, neurological,and rare disease offerings, which include tests for genes associated with epilepsy, developmental disorders, overgrowth syndromes, and skeletal disorders, as well as tests in dermatology, immunology, and ophthalmology.

 

Concert Pharmaceuticals announced the initiation of a U.S.-based Phase II clinical trial evaluating CTP-656 (deuterated ivacaftor), a next generation CFTR potentiator being developed for the treatment of cystic fibrosis. CTP-656 was created based on Concert’s application of deuterium chemistry to modify ivacaftor, which is commercially available under the brand name Kalydeco and is the current standard of care for cystic fibrosis patients with gating mutations. Topline results of the Phase II trial of CTP-656 are expected by year-end 2017.

 

Pfizer announced that the FDA has accepted for review a sNDA for its first-in-class CDK 4/6 inhibitor, IBRANCE (palbociclib). The sNDA supports the conversion of the accelerated approval of IBRANCE in combination with letrozole to regular approval and includes data from the Phase III PALOMA-2 trial, which evaluated IBRANCE as initial therapy in combination with letrozole for postmenopausal women with estrogen receptor-positive, human epidermal growth factor receptor 2-negative (ER+, HER2-) metastatic breast cancer. This is the same patient population as the randomized Phase II PALOMA-1 trial upon which the accelerated approval of IBRANCE plus letrozole was granted in February 2015.

 

Intellipharmaceutics International announced that U.S. Patent No. 9,522,119 and Canadian Patent No. 2,910,865 were issued by the USPTO and the Canadian Intellectual Property Office in respect of "Compositions and Methods for Reducing Overdose". The issued patents cover aspects of the Company’s Paradoxical OverDose Resistance Activating System ("PODRAS") delivery technology, which is designed to prevent overdose when more pills than prescribed are swallowed intact. Preclinical studies of prototypes of oxycodone with PODRAS technology suggest that, unlike other third-party abuse-deterrent oxycodone products in the marketplace, if more tablets than prescribed are deliberately or inadvertently swallowed, the amount of drug active released over 24 hours may be substantially less than expected. However, if the prescribed number of pills is swallowed, the drug release should be as expected.

 

Sunovion Pharmaceuticals announced that it has entered into an exclusive license agreement with Novartis for the U.S. commercialization rights to three approved medicines, Utibron Neohaler (indacaterol and glycopyrrolate) inhalation powder (27.5 mcg/15.6 mcg), Seebri Neohaler (glycopyrrolate) inhalation powder (15.6 mcg) and Arcapta Neohaler (indacaterol) inhalation powder (75 mcg), which are indicated for the long-term, maintenance treatment of airflow obstruction in people with chronic obstructive pulmonary disease (COPD). With this transaction, Sunovion now has the broadest COPD portfolio in the U.S., providing handheld and nebulized treatment options for people with all stages of COPD.

 

ANI Pharmaceuticals announced the launch of Lithium Carbonate Extended Release Tablets, 300mg, an authorized generic of Lithobid, which is used in the treatment of manic episodes of Bipolar Disorder.

 

Hansa Medical AB announced that it will not continue its clinical Phase II study with IdeS in acquired TTP. The decision follows Hansa Medical’s review of initial results from the study demonstrating a non-favourable risk benefit profile. This decision to discontinue the study has no impact on Hansa Medical’s ongoing studies with IdeS in renal transplantation or planned studies in other autoimmune indications.

 

Hansa Medical AB announced the second Swedish open label Phase II IdeS-study conducted at Uppsala University Hospital and Karolinska University Hospital in Huddinge is now complete with all IdeS treated patients transplanted.

 

Sosei Corporate Venture Capital and Pluristem Therapeutics announced the signing of a binding term sheet for the establishment of a new Japanese corporation (NewCo) for the clinical development and commercialization of Pluristem’s PLX-PAD cell therapy product in Japan.  Following completion of fund-raising, the parties plan to establish NewCo in Japan. Pluristem will own 35% of NewCo in return for its contribution of a perpetual license to commercialize PLX-PAD for Critical Limb Ischemia (CLI) in Japan. All proprietary rights related to PLX-PAD will be exclusively owned by Pluristem. Sosei CVC’s investment fund, Sosei RMF1, together with additional Japanese investors, will raise and invest approximately $11 million, equivalent to approximately ‎¥‎1.3 billion, in return for ownership of 65% of NewCo.

 

Eli Lilly has joined the Collaborative Trajectory Analysis Project (cTAP), a unique partnership of many stakeholders all committed to accelerating scientific discovery and bringing new treatments to Duchenne Muscular Dystrophy (DMD) patients more rapidly.

 

PixarBio developers of NeuroRelease, a morphine replacement, non-opiate/opioid, non-addictive pain treatment with FDA approval expected in early 2019, announced today that it has established the JP Reynolds Research Center in Woburn, MA to transfer neurological research toward market.

 

RedHill Biopharma announced that it intends to offer its ADSs, each representing ten of its ordinary shares, and warrants to purchase ADSs, concurrently in an underwritten public offering and in a registered direct offering. RedHill also expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the securities offered to the public in the underwritten public 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. Roth Capital Partners is acting as the 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.

 

Janssen Biotech announced the submission of two sBLAs to the FDA seeking approval of SIMPONI ARIA (golimumab) for the treatment of adults living with active psoriatic arthritis and the treatment of adults living with active ankylosing spondylitis. SIMPONI ARIA is a fully-human anti-tumor necrosis factor (TNF)-alpha therapy that is currently approved as a 30-minute intravenous infusion for the treatment of adult patients with moderately to severely active rheumatoid arthritis (RA) in combination with methotrexate. Psoriatic arthritis and ankylosing spondylitis are chronic, systemic inflammatory conditions that combined affect more than two million Americans.

 

CEL-SCI announced that it has received net proceeds of $3,702,760 and expects to receive the remaining $75,000 this week from its previously announced public offering of common stock and warrants, after deducting estimated placement agent discounts and commissions and estimated offering expenses payable by the Company.

 

Exelixis and Ipsen jointly announced an amendment to the exclusive collaboration and licensing agreement for the commercialization and continued development of cabozantinib, to include commercialization rights in Canada for Ipsen where Ipsen has an established business (Mississauga, Ontario). Signed in February 2016, the original agreement gave Ipsen exclusive commercialization rights for current and potential future cabozantinib indications outside of the U.S, Canada and Japan. Following the amendment, Exelixis maintains exclusive rights for cabozantinib in the U.S and Japan, and is continuing discussions with potential partners for commercial rights in Japan. Under the terms of the amendment, Exelixis will receive a $10 million upfront payment. Exelixis is eligible to receive regulatory milestones, for the approvals of cabozantinib in Canada for advanced renal cell carcinoma (RCC) after prior treatment, for first-line RCC, and advanced hepatocellular carcinoma (HCC), as well as additional regulatory milestones for potential further indications. In line with the prior transaction between the parties, the agreement also includes commercial milestones and provides for Exelixis to receive tiered royalties on Ipsen’s net sales of cabozantinib in Canada.

 

Sucampo Pharmaceuticals announced the December 20, 2016 pricing of $260.0 million aggregate principal amount of 3.25% convertible senior notes due 2021 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In connection with the offering, Sucampo also granted the initial purchaser of the notes a 13-day option to purchase up to an additional $40.0 million aggregate principal amount of the notes, solely to cover over-allotments, if any. The size of the offering was increased by $35.0 million from the previously announced offering size of $225.0 million. The sale of the notes is expected to close on December 27, 2016, subject to customary closing conditions. Sucampo estimates that the net proceeds from this offering will be $251.6 million, or $290.4 million if the initial purchaser exercises its option to purchase additional notes in full, after deducting the initial purchaser’s discount and estimated offering expenses. Sucampo currently expects to use the net proceeds of the offering to repay in full amounts due under Sucampo’s senior secured credit facility, including all accrued but unpaid interest and a prepayment premium, concurrently with the closing of the offering.  Sucampo intends to use the remaining net proceeds from the offering for general corporate purposes.

 

Astellas Pharma announced that it has completed the acquisition of Ganymed Pharmaceuticals and Ganymed has become a wholly owned subsidiary of Astellas as of CET December 20, 2016.

 

On December 20, 2016, Ionis Pharmaceuticals entered into separate privately negotiated exchange agreements with certain holders of its 2.75% Convertible Senior Notes due 2019 to exchange in a private placement in reliance on Section 4(a)(2) and Regulation D of the Securities Act of 1933, as amended, $60.8 million in aggregate principal amount of 2019 Notes for an estimated $182.7 million in aggregate principal amount of the Company’s 1.00% Convertible Senior Notes due 2021, subject to the final exchange ratio (which is calculated by reference to the volume-weighted average closing price of the Company’s common stock over a five trading day period ending on December 28, 2016. The Company anticipates that the closings of the Exchange Transactions will occur on or about December 30, 2016.

 

 

ANALYST RECOMMENDATIONS

 

Jefferies analyst Brian Abrahams initiated coverage of Tracon Pharmaceuticals with a “buy” rating and $10 price target, citing the lead anti-endoglin mAb TRC105 has demonstrated activity signals across multiple solid tumors that should be confirmed in ’17 readouts and ultimately drive meaningful LT revenue opportunities.

 

SunTrust analyst Yun Zhong initiated coverage of Prothena with a “buy” rating and $75 price target, citing three programs in the clinic, each targeting a billion dollar market.

 

Leerink analyst Paul Matteis resumed coverage of Cidara Therapeutics with an “outperform” rating and $17 price target, citing lead product CD101 has the potential to be a best-in-class anti-fungal agent, benefitting from multiple points of differentiation including: increased potency; and a longer half-life, which may enable once-weekly dosing and earlier hospital discharge.

 

Mizuho analyst Irina Koffler decreased her price target of Pacira Pharmaceuticals to $41 from $46, citing disappointing Exparel prescription trends in November.

 

Needham analyst Alan Carr initiated coverage of Theravance Biopharma with a “buy” rating and $40 price target, citing the company has a diversified strategy and pipeline, with a mix of internal and out-licensed programs across various indications, all derived from a small molecule drug discovery platform.

 

Ladenburg Thalmann analyst Wangzhi Li initiated coverage of Cellectar BioSciences with a “buy” rating and $2.70 price target, citing CLRB is a clinical stage biopharmaceutical company focused on the development of phospholipid-ether-drug conjugates which can achieve targeted delivery of drug payloads or imaging agents to cancer cells including cancer stem cells.

 

Following Akebia’s announcement of a collaboration agreement with Otsuka for US development and commercialization of vadadustat, Aegis Capital analyst Difei Yang increased his price target to $21 from $18; Credit Suisse analyst Kennen MacKay increased his price target to $11 from $8.