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BioShares Biotechnology Clinical Trials (BBC): $21.18, +$0.48, +15.0% YTD

BioShares Biotechnology Products (BBP): $37.50, +$0.42, +14.5% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were little changed a day after hitting record highs on Federal Reserve Chair Janet Yellen’s comments that suggested an interest rate hike next month. The day’s economic calendar carries inflation, industrial production and retail sales data. Cisco, Kraft Heinz, Marriott and Applied Materials are some of the top companies scheduled to report results after the closing bell. European markets rose on a busy day of corporate earnings and Asian shares closed mostly higher. Dollar gained against a basket of major currencies. Oil fell as U.S. crude inventories jumped and gold rose.

 

 

MARKET HIGHLIGHTS

 

Transgene announced that the 1st patient in the ISI-JX trial has been treated at the Léon Bérard Cancer Center in Lyon, France. ISI-JX is a Phase 1 clinical trial evaluating the intra-tumoral co-administration of Pexa-Vec in combination with ipilimumab in solid tumors (NCT02977156). This investigator initiated trial promoted by the Leon Bérard Cancer Center will enroll patients with metastatic and/or locally advanced solid tumors.  

Pexa-Vec is a GM-CSF expressing vaccinia derived oncolytic virus co-developed by Transgene and SillaJen. Ipilimumab is a monoclonal antibody targeted against the immune checkpoint CTLA-4 and is currently approved for the treatment of melanoma (Yervoy®, Bristol-Myers Squibb). The open-label trial will recruit up to 60 patients in several clinical centers in France. First readouts could be expected towards the end of 2017. The trial will evaluate the safety of the combination and evaluate the first signals for efficacy.

 

Prothena Corporation reported financial results for the fourth quarter and full year 2016. In addition, the Company provided 2017 financial guidance and an update on its R&D programs.  Prothena reported a net loss of $48.9 million and $160.1 million for the fourth quarter and full year of 2016, respectively, as compared to a net loss of $24.2 million and $80.6 million for the fourth quarter and full year of 2015, respectively. Net loss per share for the fourth quarter and full year of 2016 was $1.41 and $4.66, respectively, as compared to a net loss per share for the fourth quarter and full year of 2015 of $0.76 and $2.66, respectively. As of December 31, 2016, Prothena had $391.0 million in cash, cash equivalents and restricted cash and no debt.

 

Alcobra announced financial results for the three and twelve months ended December 31, 2016 and provided a corporate update.  The Company reported a net loss for the year ended December 31, 2016 of $24.6 million, or ($0.89) per share, compared to a net loss of $19.4 million, or ($0.90) per share in the same 12-month period of 2015.  Cash, marketable securities, and deposits totaled $50.2 million at December 31, 2016, compared with $54.3 million at September 30, 2016 and $69.7 million at December 31, 2015.

 

Inventiva S.A raised EUR 48 million ($51.2 million) through the sale of 5.7 million shares at EUR 8.50 in an IPO underwritten by Societe Generale and KBC Securities. The offering values the company at EUR 133.3 million ($141.9 million). Inventiva shares are to begin trading Wednesday.

 

Zogenix will conduct investor meetings at the RBC Capital Markets Healthcare Conference, taking place February 22-23, 2017, in New York, NY.

 

Cytori Therapeutics announced it has completed its acquisition of assets of privately held Azaya Therapeutics. The Acquisition provides Cytori with a proprietary liposomal nanoparticle technology platform that is intended to complement Cytori’s leadership position in regenerative medicine and expand its pipeline with two promising nanoparticle oncology drugs.

 

Alkermes reported 4Q16 non-GAAP EPS of $0.15, which compares to a loss of $0.14 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $0.04. Total revenue for 4Q16 was $213.5 million, which compares to $163.1 million for the same period a year ago. This compares to a mean estimate of $206.4 million. 

 

Merck announced that it will be stopping protocol 017, also known as the EPOCH study, a Phase II/III study evaluating verubecestat, an investigational small molecule inhibitor of the beta-site amyloid precursor protein cleaving enzyme 1 (BACE1), in people with mild-to-moderate Alzheimer’s disease (AD). Merck is stopping the study following the recommendation of the external Data Monitoring Committee (eDMC), which assessed overall benefit/risk during a recent interim safety analysis, and determined that there was “virtually no chance of finding a positive clinical effect.” The eDMC noted that safety signals observed in the study “are not sufficient to warrant stopping study 017,” and recommended that protocol 019, also known as APECS, which is evaluating verubecestat in people with prodromal Alzheimer’s disease, continue unchanged. Results from protocol 019 are expected in February 2019. Results from EPOCH will be analyzed and presented at an upcoming scientific meeting.

 

Merck announced results of a pivotal Phase III clinical trial evaluating the safety and efficacy of doravirine (MK-1439), an investigational non-nucleoside reverse transcriptase inhibitor (NNRTI). The study met its primary efficacy endpoint of the proportion of participants achieving levels of HIV-1RNA less than 50 copies/mL after 48 weeks of treatment, demonstrating the non-inferiority of once-daily doravirine (DOR) to once-daily ritonavir-boosted darunavir (DRV+r), each administered with tenofovir disoproxil fumarate/emtricitabine (TDF/FTC) or abacavir/lamivudine (ABC/3TC), in previously untreated (treatment-naïve) adults with HIV-1 infection. In addition, a secondary endpoint showed that the DOR-treated group had statistically significant lower levels of fasting low density lipoprotein cholesterol (LDL-C), versus the DRV+r group. Findings from the ongoing “DRIVE-FORWARD” Phase III trial following 48 weeks of treatment were presented as a late-breaking abstract at the annual Conference on Retroviruses and Opportunistic Infections (CROI) being held in Seattle.

 

After yesterday’s close, Neurocrine BioSciences reported 4Q16 GAAP EPS loss of $0.51, which compares to a loss of $0.34 for the same period a year ago. The company beat the GAAP EPS mean estimate loss of $0.57. No revenue was reported for 4Q16, which compares to no revenue for the same period a year ago. This compares to a mean estimate of $4.5 million. Following Neurocrine’s earnings, Piper Jaffray analyst Charles Duncan decreased his price target to $80 from $96; Deutsche Bank analyst Andrew Peters increased his price target to $65 from $63; Oppenheimer analyst Jay Olson increased his price target to $60 from $55; Jefferies analyst Biren Amin increased his price target to $58 from $56; Cowen analyst Phil Nadeau decreased his price target to $60 from $65.  

 

Theratechnologies announced that additional secondary efficacy and safety endpoint results from the 24-week ibalizumab Phase III trial, TMB-301, were presented at a late-breaker session at the Conference on Retroviruses and Opportunistic Infections (CROI) 2017. Preliminary secondary efficacy and safety endpoint results were announced on November 10, 2016.  The new data showed that patients with multidrug resistant (MDR) HIV-1 infection experienced a mean increase in CD4(+) T cell of 48 cells/µL after 24 weeks of treatment with ibalizumab plus an optimized background regimen (OBR). These data supplement previously reported findings, where 83% of patients achieved a ≥ 0.5 log(10) decrease in viral load from baseline seven days after the single loading dose of 2000 mg of ibalizumab (primary endpoint) and a mean reduction in viral load of 1.6 log(10) over the 24 week treatment period with more than 48% of patients experiencing a viral load reduction of more than 2.0 log(10).

 

Gilead Sciences announced 144-week data from two Phase III studies (Studies 104 and 111) evaluating the safety and efficacy of Genvoya (elvitegravir 150 mg, cobicistat 150 mg, emtricitabine 200 mg and tenofovir alafenamide 10 mg) for the treatment of HIV-1 infection in treatment-naïve adults. Through Week 144, Genvoya demonstrated significantly higher rates of virologic suppression compared to Gilead’s Stribild (elvitegravir 150 mg, cobicistat 150 mg, emtricitabine 200 mg and tenofovir disoproxil fumarate 300 mg), based on the percentage of patients with HIV-1 RNA levels less than 50 copies/mL. Patients receiving Genvoya also demonstrated favorable renal and bone laboratory parameters compared to those treated with Stribild. The data were presented in a poster session (Poster 0393) at the 2017 Conference on Retroviruses and Opportunistic Infections (CROI) in Seattle.

 

Selecta Biosciences announced that results from preclinical studies involving the use of SVP-Rapamycin in combination with alglucosidase alfa (marketed as Myozyme and Lumizyme) to treat Pompe disease are being presented at the 13th Annual WORLDSymposium by a research team led by Priya Kishnani, MD. Dr. Kishnani is Chief of Medical Genetics at Duke University Medical Center and is one of the world’s leading experts in the treatment of Pompe disease.

 

Interleukin Genetics announced that it has entered into a relationship with the Pittsburgh Business Group on Health (PBGH) to offer the ILUSTRA Inflammation Management Program to PBGH employer-members in the Pittsburgh area as part of a company’s enhanced employee benefits plan.

 

X-Chem announced that it has expanded its collaboration with Janssen Biotech, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, to discover new drug leads for the treatment of inflammatory disease. The multi-target expansion builds on the parties’ existing discovery and license partnership, entered into in December 2014, and was facilitated by Johnson & Johnson Innovation. This latest agreement will apply X-Chem’s DEX platform to the identification of novel modulators for challenging disease targets, following the licensing of multiple series of X-Chem-discovered small molecules by Janssen in 2016. Under the terms of the agreement, X-Chem receives an upfront payment and research funding, and is eligible to receive additional payments and royalties based on the achievement of clinical, regulatory and commercial milestones.

 

Evoke Pharma announced that it has received a letter from FDA exempting its late stage product, Gimoti from a Human Factors (HF) Validation study requirement prior to submission of a NDA.

 

Spotlight Innovation announced that it has entered into a second license agreement with the Florida State University Research Foundation (FSURF) for the development and commercialization of additional anti-Zika virus compounds. As with the initial license agreement, this agreement grants to Spotlight Innovation exclusive, worldwide rights to develop and commercialize certain compounds for the treatment of viral infections, including Zika virus infection.

 

Ardelyx reported that the Phase III clinical trial evaluating the efficacy and safety of tenapanor as a treatment for hyperphosphatemia in patients with end-stage renal disease (ESRD) who are on dialysis met its primary endpoint and was generally well-tolerated. The responder population (n=80 out of 164) had a mean reduction in serum phosphorus from baseline to the end of the eight-week treatment period of 2.56 mg/dL, with a reduction of up to 5.7 mg/dL. Notably, in this group, 33 percent of patients had a reduction in serum phosphorus of greater than 3 mg/dL. The study demonstrated a statistically significant difference in serum phosphorus levels from the end of the eight-week treatment period to the end of the four-week randomized withdrawal period between the tenapanor-treated group and the placebo-treated group in the responder patient population (mean -1.01 mg/dL, median of -1.3 mg/dL) and met its primary endpoint (95% CI -1.44, -0.21; LSmean -0.82 mg/dL; p=0.01). Only 7.8 percent of patients discontinued treatment due to GI side effects.

 

Amunix announced that it has entered into a research and development collaboration with Genentech, a member of the Roche Group. The agreement will focus on the discovery and development of therapeutics utilizing Amunix’s proprietary XTEN technology against multiple targets selected by Genentech. Under the terms of the agreement, Amunix will receive an undisclosed upfront payment and is eligible to receive milestone payments based on achievement of certain predetermined development and commercial milestones. In addition, Amunix is eligible to receive royalties on worldwide sales of certain products resulting from the agreement. Financial terms have not been disclosed.

 

Novocure announced that the first patient has been enrolled in LUNAR, its phase III pivotal trial of Tumor Treating Fields at 150 kHz as a treatment for advanced non-small cell lung cancer (NSCLC) after failing platinum-based therapy. The prospective, randomized, controlled trial will test the efficacy and safety of TTFields in combination with immune checkpoint inhibitors or docetaxel – a taxane chemotherapy – two of the current standard of care treatments.

 

Insys Therapeutics announced that the Company is providing for the use of Cannabidiol Oral Solution at doses up to 40 mg/kg/day in compassionate use studies in subjects with refractory pediatric epilepsy following completion of 48 weeks of treatment in the ongoing long-term safety study.  The long-term safety study permitted subjects who had completed the initial safety and pharmacokinetic (PK) study to receive Cannabidiol Oral Solution at doses up to 40 mg/kg/day for up to 48 weeks.  In the initial safety and PK study, 61 subjects with refractory epilepsy, between the ages of one and 17 years, received total daily doses of 10 mg/kg, 20 mg/kg or 40 mg/kg.  In nine of the 61 subjects where Delta-9-THC was measured, no quantifiable plasma levels of Delta-9-THC were detected. Cannabidiol Oral Solution was generally well tolerated.

 

Cepheid announced that it has received clearance from the FDA to market Xpert Xpress Flu and Xpert Xpress Flu/RSV. Both tests deliver reference-quality molecular results in as little as twenty minutes. The tests are Cepheid’s first Xpress branded products — all of which are expected to deliver results in 30 minutes or less.

 

Amedica announced that on February 14, 2017, it received notification from the NASDAQ Stock Market indicating that the Company will have an additional 180-day grace period, until August 14, 2017, to regain compliance with NASDAQ’s $1.00 minimum bid requirement. The notification indicated that the Company did not regain compliance during the initial 180-day grace period provided under the rule. In accordance with NASDAQ Marketplace Rule 5810(c)(3)(A), the Company is eligible for the additional grace period because it meets the initial listing requirements for the NASDAQ Capital Market except for the bid price and provided written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

 

Amicus Therapeutics presented new scientific findings and preclinical data on functional outcomes in an oral presentation and poster at the 13th Annual WORLDSymposium in San Diego, CA. ATB200/AT2221 is a novel treatment paradigm that consists of ATB200, a unique recombinant human acid alpha-glucosidase (rhGAA) enzyme with optimized carbohydrate structures, particularly mannose-6 phosphate (M6P), to enhance uptake in muscles, co-administered with AT2221, a pharmacological chaperone designed to stabilize ERT in circulation.

 

Integra LifeSciences announced that it has made a binding offer to acquire the Johnson & Johnson Codman Neurosurgery business for a price of $1.045 billion in cash. Codman Neurosurgery offers a portfolio of devices focused on advanced hydrocephalus, neuro-critical care and operative neurosurgery. If the binding offer is accepted, upon closing, Integra will be a leading global provider of neurosurgical products.

 

Lipocine announced the promotion of Gregory Bass to the newly created position of Executive Vice President and Chief Commercial Officer reporting to Dr. Mahesh Patel, President and Chief Executive Officer. Mr. Bass will be responsible for leading the commercialization of Lipocine’s product candidates, including its testosterone replacement franchise.

 

AveXis announced the appointment of Rick Modi to the executive management team as Senior Vice President and Chief Business Officer.

 

Auris Medical Holding announced the pricing of its previously announced public offering of 10,000,000 common shares and 10,000,000 warrants, each warrant entitling its holder to purchase 0.70 of a common share. The common shares and warrants are being sold in units comprised of one common share and one warrant at the public offering price of $1.00 per unit. The anticipated gross proceeds amount to $10 million. The warrants will be immediately exercisable at a price of $1.20 per common share and are exercisable for five years. In connection with the offering, the Company has granted the underwriter a 30-day option to purchase up to 1,500,000 additional common shares and/or 1,500,000 additional warrants at the public offering price less underwriting discounts. All of the units are being offered by the Company. The offering is expected to close on or about February 21, 2017, subject to customary closing conditions. After deducting the underwriting discount and other estimated offering expenses, the net proceeds of the public offering are expected to be approximately $9.1 million. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes. The net proceeds amount excludes the proceeds, if any, from the exercise of warrants issued pursuant to this offering. Roth Capital Partners is acting as sole book-running manager in the offering. Maxim Group is acting as a financial advisor in the offering.

 

Celsion announced the pricing of a public offering with expected total gross proceeds of approximately $5.0 million. The offering was priced at $0.23 per share of common stock (or common stock equivalent), with each share of common stock (or common stock equivalent) sold with one five-year warrant to purchase 0.75 of a share of common stock, at an exercise price of $0.23 per share. The offering is expected to close on or about February 21, 2017, subject to satisfaction of customary closing conditions.

 

 

Analyst Recommendations

 

Following Prothena’s earnings, Credit Suisse analyst Kennen MacKay decreased his price target to $66 from $69.

 

Credit Suisse analyst Vamil Divan initiated coverage of Foamix Pharmaceuticals with an “outperform” rating and $22 price target, citing a management team with strong dermatology experience and has sufficient cash on hand to fund their current activities into 2019.  

 

Morgan Stanley analyst Andrew Berens initiated coverage of Blueprint Medicines with an “overweight” rating and $45 price target, citing Blueprint is a development stage biotech company with a robust drug discovery engine designing highly selective oral cancer agents that target genetic variants in hard to treat diseases like GIST, Liver Cancer and Systemic Mastocytosis.

 

Following Incyte’s earnings, Credit Suisse analyst Kennen MacKay decreased his price target to $136 from $137.

 

Goldman analyst Salveen Richter upgraded Acorda Therapeutics to “neutral” from “sell” and increased her price target to $22 from $16, citing recent positive data for the latter in Parkinson’s (PD) OFF episodes removes a worst-case scenario with a potential 2018 market entry to offset Ampyra.

 

HC Wainwright analyst Ed Arce downgraded Aviragen Therapeutics to “neutral” from “buy,” citing Aviragen announced that the Phase 2b SPIRITUS trial of its lead drug candidate, vapendavir, missed its primary and several secondary endpoints.

 

HC Wainwright analyst Carol Ann Werther initiated coverage of WaVe Life Sciences with a “buy” rating and $41 price target, citing WAVE Life Sciences has developed has an innovative and proprietary synthetic chemistry platform that uses rational design to develop stereopure nucleic acids.

 

Leerink analyst Jason Gerberry initiated coverage of Biovertiv with an “outperform” rating and $56 price target, citing the underappreciated durability of the company’s marketed hemophilia assets, beatable near-term projections (Street & ’17 mgmt guide) and opportunity for tax reform or an M&A acquirer to unlock value.

 

Roth analyst Mark Breidenbach re-initiated coverage of Lion Biotechnologies with a “buy” rating and $14 price target, citing 2017 could be a transformational year for the company with early results expected from an ongoing Phase 2 trial of TIL therapy in melanoma, the first of its kind to use centralized manufacturing.