BioShares Biotechnology Clinical Trials (BBC): $19.84, +$0.95, +7.8% YTD

BioShares Biotechnology Products (BBP): $35.26, +$1.44, +7.7% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were higher, with investors looking forward to the first policy decision of the Federal Reserve since President Donald Trump took office. The central bank is expected to keep its benchmark interest rates unchanged, however, it is likely to modify its policy statement to reflect a recent string of upbeat economic data. Also on the on the economic calendar are Markit Manufacturing PMI, ADP national employment, construction spending and vehicle sales data. Facebook, MetLife, Symantec and Legg Mason are among the companies scheduled to report results later in the day. U.S. dollar recovered little ground after falling 2.6 percent against a basket of currencies in January, its worst start to the year in three decades. European shares were higher after data showed strong manufacturing activity in the euro zone. Asian markets ended the day up. Oil and gold rose.

 

 

MARKET HIGHLIGHTS

 

Kitov Pharmaceuticals Holdings announced that the U.S. Patent and Trademark Office has issued a Notice of Allowance to the Company related to claims expanding the patent coverage for its lead drug candidate, KIT-302, to include oral dosage compositions containing both amlodipine and celecoxib.

 

AIT Therapeutics announced the appointment of Hai Aviv as the Company’s Chief Financial Officer, effective February 28, 2017.

 

Albireo Pharma announced that EA Pharma has submitted a NDA to the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) for elobixibat for the treatment of chronic constipation in Japan. EA Pharma is the exclusive licensee of elobixibat to treat gastrointestinal disorders in Japan and other select countries in Asia. Subject to receipt of approval from the PMDA, EA Pharma plans to co-market elobixibat in Japan with Mochida Pharmaceutical.

 

Catalyst Biosciences announced positive preclinical results in well-validated models of hemophilia A and B with marzeptacog alfa (activated), a next-generation Factor VIIa, and CB 2679d/ISU304, a next-generation coagulation Factor IX. The results highlight the attractive pharmacodynamics and pharmacokinetic profiles of both coagulation factors based on bioavailability, potency, time to maximal concentration, and half-life that should allow for subcutaneous (SQ) dosing in individuals with hemophilia.

 

SciClone Pharmaceuticals will present a corporate overview and business update at the 19th Annual BIO CEO & Investor Conference at 4:30 pm ET on Monday, February 13, 2017, at the Waldorf Astoria Hotel in New York City.

 

VBL Therapeutics announced the publication of a paper discussing MOSPD2, a potential novel immuno-oncology target. The paper, entitled, "Identification of Motile Sperm Domain–Containing Protein 2 as Regulator of Human Monocyte Migration" by Mendel et al., is published online in The Journal of Immunology. VBL’s manuscript reveals that MOSPD2, a protein with a previously unknown function, regulates cell migration in human monocytes. While this first manuscript focuses on the importance of MOSPD2 in immune cells, research conducted by VBL has explored the relevance of MOSPD2 in motility and metastasis of tumor cells. These oncology-related data will be presented at the forthcoming American Association of Cancer research (AACR) conference in Washington, DC, April 1-5, 2017.

 

Catabasis Pharmaceuticals announced top-line safety and efficacy results for Part B of the MoveDMD trial of edasalonexent (CAT-1004) for the treatment of Duchenne muscular dystrophy (DMD). The objective of Part B of the MoveDMD trial was to evaluate the effects of edasalonexent using magnetic resonance imaging (MRI) T2 as a biomarker at 12 weeks. The primary efficacy end point of average change from baseline to week 12 in the MRI T2 composite measure of lower leg muscles for the pooled edasalonexent treatment groups of 67 mg/kg/day and 100 mg/kg/day compared to placebo was not met (0.37 milliseconds for the pooled edasalonexent treatment groups versus 0.47 milliseconds for placebo, a smaller increase in MRI T2 correlating with less muscle inflammation). The edasalonexent 100 mg/kg/day treatment group consistently showed numerical improvement versus placebo across multiple measures although the changes were not statistically significant. The 67 mg/kg/day treatment group had mixed results compared with both the 100 mg/kg/day treatment group and placebo, which in each case were not statistically significant. Catabasis plans to complete a full analysis of the data from Part B of the MoveDMD trial and to submit the data for presentation at an upcoming scientific conference. The open-label extension portion (Part C) of the MoveDMD trial is ongoing. Catabasis intends to report the results from Part C in 2017, with an interim update in Q2.

 

Galectin Therapeutics announced it has generated sufficient financing to cover currently planned expenditures through 2017 and it remains on track to present top line data from its NASH-CX Phase II clinical trial by early December 2017.

 

Regeneron Pharmaceuticals and Sanofi announced that Health Canada approved Kevzara (sarilumab), an interleukin-6 (IL-6) receptor antibody, for the treatment of adult patients with moderately to severely active rheumatoid arthritis (RA) who have had an inadequate response or intolerance to one or more biologic or non-biologic Disease-Modifying Anti-Rheumatic Drugs (DMARDs).

 

Dow Jones reported that Roche posted an upbeat set of full-year results, as several of its top-selling drugs continued to prosper in the absence of cheaper competitors. Net profit rose 8% from a year earlier to 9.6 billion Swiss francs ($9.7 billion), while revenue increased 5% to 50.6 billion francs, with both measures missing analyst expectations. Core operating profit–a measure that strips out certain items such as impairments, tax and financing costs–rose 5% to 18.4 billion Swiss francs. Roche said it expects sales and core earnings per share to grow by a low-to-mid single-digit percentage in 2017, at constant exchange rates. The company proposed a full-year dividend of 8.20 Swiss francs, up from 8.10 francs last year.

 

Illumina reported 4Q16 non-GAAP EPS of $0.85, which compares to $0.81 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $0.82. Total revenue for 4Q16 was $619.3 million, which compares to $591.5 million for the same period a year ago. This compares to a mean estimate of $616.4 million. Following earnings, Evercore analyst Ross Muken increased his price target to $173 from $139; UBS analyst Jonathan Groberg increased his price target to $185 from $180; Leerink analyst Puneet Souda increased his price target to $134 from $132; Baird analyst Catherine Ramsey increased her price target to $159 from $153; C.L. King analyst Dave Westenberg increased his price target to $175 from $155; Deutsche Bank analyst Dan Leonard increased his price target to $165 from $160.

 

AbbVie announced it has submitted a NDS, and received priority review from Health Canada, 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.

 

Abeona Therapeutics announced that the first high-dose subject was enrolled in the ongoing Phase I/II trial for ABO-102 (AAV-SGSH). The first-in-man clinical trial utilizes a single intravenous injection of AAV gene therapy for patients with MPS IIIA (Sanfilippo syndrome type A), a devastating lysosomal storage disease that affects every cell and organ resulting in neurocognitive decline, speech loss, loss of mobility, and premature death.

 

Cerulean Pharma announced that its Board of Directors is conducting a comprehensive review of strategic alternatives focused on maximizing stockholder value. Cerulean has engaged investment bank, Aquilo Partners, L.P., as its financial advisor to assist in the strategic review process. The intention of the strategic review is to evaluate potential alternatives such as the sale of the company, a merger, a business combination, a strategic investment into the company, or a sale, license or disposition of assets of the company. This process may not result in any transaction.

 

Regen BioPharma entered into a Master Agreement with ChemDiv to begin the process of optimizing its lead compounds, RG-NA01, RG-NA02, RG-NI01 and RG-NI02. These compounds are small molecules and consist of activators (RG-NA01 and RG-NA02) and inhibitors (RG-NI01 and RG-NI02) of NR2F6. They were identified using Regen’s patented screening methodology and unique chemical libraries.

 

Audentes Therapeutics announced that the FDA has cleared the IND application for AT342, the Company’s gene therapy product candidate to treat Crigler-Najjar Syndrome. The IND is now active and Audentes plans to initiate VALENS, the multicenter, multinational, open-label, ascending dose Phase I/II clinical study of AT342. Preliminary data from VALENS is expected to be available by the end of 2017.

 

MannKind announced the launch of a new Titration Pack containing 60 — 4 unit cartridges, 60 — 8 unit cartridges and 60 — 12 unit cartridges of Afrezza (insulin human) Inhalation Powder.

 

Allergan announced that it has successfully completed the acquisition of LifeCell. Allergan acquired LifeCell for approximately $2.9 billion in cash. The Company plans to provide its 2017 guidance, including LifeCell, as part of its fourth quarter and full year 2016 earnings results on February 8, 2017.

 

Sanofi announced that the FDA approved Xyzal Allergy 24HR as an over-the-counter (OTC) treatment for the relief of symptoms associated with seasonal and year-round allergies. Specifically, two formulations of Xyzal are now approved for OTC use — 5 mg tablets for ages 6 years and older, as well as 0.5 mg/mL oral solution for ages 2 years and older. Xyzal is an oral antihistamine with a proven 24-hour effect.

 

Sun BioPharma announced the company has been awarded a Small Business Technology Transfer (STTR) grant from the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), one of the National Institutes of Health, to study the effect of their flagship product, SBP-101, as a potential treatment for pancreatitis. SBP-101 is a first-in-class, proprietary, polyamine compound designed to exert therapeutic effects in a mechanism specific to the pancreas.

 

Synergy Pharmaceuticals announced the pricing of its underwritten public offering of 20,325,204 shares of its common stock at a price to the public of $6.15 per share, before deducting underwriting discounts and commissions and other estimated offering expenses. The offering is expected to close on or about February 6, 2017, subject to customary closing conditions. Cantor Fitzgerald and Canaccord Genuity are joint book-running managers for the offering. H.C. Wainwright is a co-manager for the offering.

 

Collegium Pharmaceutical announced positive topline results from an oral human abuse potential clinical trial, which was designed to evaluate the abuse potential and pharmacokinetics of oral administration of Xtampza ER (oxycodone extended-release capsules) compared to chewed Xtampza ER, and crushed immediate-release oxycodone in solution in non-dependent, recreational drug abusers. The study met its primary and secondary endpoints of lower "Drug Liking" and "Take Drug Again".

 

Radius Health announced that positive results from a planned 6-month interim analysis of the ACTIVExtend clinical trial were published in the Mayo Clinic Proceedings. The results of ACTIVExtend following 6 months of alendronate treatment show that patients previously treated with daily abaloparatide-SC for 18 months in the ACTIVE trial who were transitioned to alendronate had significantly greater reduction of 87% in the incidence of new vertebral fractures, of 52% in nonvertebral fractures (p = 0.02) and 58% in major osteoporotic fractures compared to the previous placebo treated patients who were also transitioned to alendronate. Bone mineral density at the spine, femoral neck and hip increased significantly in the abaloparatide-treated patients after transitioning to alendronate.

 

Clovis Oncology and Strata Oncology announced an agreement to accelerate patient identification and enrollment for Clovis’ ongoing TRITON (Trial of Rucaparib in Prostate Indications) clinical trial program, which includes Phase II and Phase III clinical trials of rucaparib in metastatic castration-resistant prostate cancer, both of which are open for enrollment.

 

OPKO Health announced that its subsidiary and business unit, GeneDx, is entering into a collaboration with the Deciphering Developmental Disorder (DDD) study led by the Wellcome Trust Sanger Institute. The Wellcome Trust Sanger Institute is a non-profit research institute that played a central role in the human genome project. The DDD study aims to determine the clinical utility of leveraging advanced genomic technologies to diagnose patients with developmental disorders. This will be accomplished in two ways: (i) identifying novel genes and pathways for human genetic diseases and characterizing the associated phenotypes, and (ii) improving informatics and statistical methods to robustly diagnose patients with genetic conditions.

 

Ophthotech announced that it has initiated a plan to review its strategic alternatives in order to maximize shareholder value. Without limiting any option, the principal focus of this plan, based on the Company’s deep expertise and experience in ophthalmology, is to actively explore obtaining rights to additional products, product candidates and technologies to treat ophthalmic diseases, particularly those of the back of the eye. As part of implementing the strategic plan, the Company announced that Glenn P. Sblendorio will assume the role of President, effective immediately. Mr. Sblendorio also will continue to serve as Chief Financial Officer. Mr. Sblendorio previously served as the Company’s Executive Vice President, Chief Financial Officer and Chief Operating Officer. The Company also announced the promotion of Keith Westby to Senior Vice President and Chief Operating Officer. Mr. Westby was previously Senior Vice President of Development Operations of Ophthotech.

 

Vericel announced the first implant of MACI (autologous cultured chondrocytes on porcine collagen membrane) in the United States for the repair of symptomatic single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.

 

Emergent BioSolutions announced the initiation of a Phase Ib multiple ascending dose study to evaluate the safety and tolerability of UV-4B, the company’s novel antiviral candidate being developed as a potential oral treatment for dengue viral infection. This study, which will enroll 40 healthy adults in U.S. sites, follows a successful Phase Ia single ascending dose clinical study completed in 2016. Preclinical studies have shown that UV-4B is active in vitro against all four dengue virus subtypes and in vivo studies have shown improved survival even when dosing was delayed by up to 48 hours post-infection.

 

Summit Therapeutics outlined its Phase III program for its novel antibiotic, ridinilazole, following recent regulatory meetings with the FDA and EMA. With input from the FDA and EMA, Summit intends to design the Phase 3 clinical programme to evaluate superiority of ridinilazole over standard of care in the treatment of CDI. A positive Phase III result on superiority has the potential to support the commercial launch of ridinilazole as a differentiated therapy that can both treat initial CDI and reduce disease recurrence.

 

Biogen announced the completion on February 1, 2017 of the separation of its global hemophilia business. The new company, known as Bioverativ, is an independent, publicly traded global biotechnology company focused on hemophilia and other rare blood disorders. Bioverativ common stock will begin “regular way” trading on Thursday, February 2, 2017, under the symbol “BIVV” on the NASDAQ Global Select Market.

 

Merck announced that the EC has approved KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, for the first-line treatment of metastatic non-small cell lung cancer (NSCLC) in adults whose tumors have high PD-L1 expression (tumor proportion score [TPS] of 50 percent or more) with no EGFR or ALK positive tumor mutations. The approval is based on Phase III data which demonstrated superior overall survival (OS) and progression-free survival (PFS) with KEYTRUDA compared to chemotherapy, the current standard of care for advanced NSCLC. The approval allows marketing of KEYTRUDA in all 28 EU member states plus Iceland, Lichtenstein and Norway, at the approved dose of 200 mg every three weeks until disease progression or unacceptable toxicity.

 

XOMA Corporation announced that it has established proof-of-concept for its product candidate 358 in congenital hyperinsulinism (CHI) and hypoglycemia post-bariatric surgery (PBS).

 

AnaptysBio announced the closing of its initial public offering of 5,750,000 shares of its common stock at a public offering price of $15.00 per share, which includes the exercise in full by the underwriters of their option to purchase an additional 750,000 shares of common stock. The shares began trading on The NASDAQ Global Select Market on January 26, 2017 under the symbol “ANAB.”  Credit Suisse and Stifel acted as joint book-running managers for the offering. JMP Securities and Wedbush PacGrow acted as co-managers.

 

Galena Biopharma announced that the Board of Directors has entered into a separation agreement with Mark W. Schwartz, Ph.D. under which Dr. Schwartz will resign from the company and its affiliates as the President, Chief Executive Officer, and member of the Board of Directors, effective today. The Board of Directors expects to appoint an Interim Chief Executive Officer in the next couple weeks.

 

 

ANALYST RECOMMENDATIONS

 

Wedbush analyst Robert Driscoll assumed coverage of the following companies: Achaogen with an “outperform” rating and $23 price target; Idera Pharmaceuticals with an “outperform” rating and $6 price target; Arbutus Biopharma with an “outperform” rating and $10 price target; Nabriva Therapeutics with an “outperform” rating and $13 price target.

 

Following Pfizer’s earnings, Deutsche Bank analyst Gregg Gilbert decreased his price target to $40 from $41; Leerink analyst Seamus Fernandez decreased his price target to $35 from $36; Atlantic Equities analyst Steven Chesney increased his price target to $37 from $35; Piper Jaffray analyst Richard Purkiss decreased his price target to $52 from $53.

 

Jefferies analyst Eun Yang initiated coverage of Bioverativ with a “buy” rating and $53 price target, citing a relative inexpensive valuation versus large-cap biotechs despite above-average growth.

 

Cowen analyst Phil Nadeau downgraded Catabasis Pharmaceuticals to “market perform” from “outperform” and decreased his price target to $4 from $30, citing lead candidate edasalonexent missed the primary endpoint in its Phase II proof-of-concept trial in Duchenne Muscular Dystrophy.

 

FBR analyst Vernon Bernardino decreased his price target of Seres Therapeutics to $18 from $23, citing the availability of safety data and FDA recognition of fecal matter transplant as an effective means to treat CDI, and thus below average risk relative to other candidates in mid-stage development.

 

Bank of America Merrill Lynch analyst Ying Huang upgraded Amgen to “buy” from “neutral,” and increased his price objective to $192 from $182, citing while there is a downward trend for Epogen, the recent DaVita contract should help secure the volume and the delay in Neulasta biosimilar launch should further help stabilize AMGN’s top-line revenue.