BioShares Biotechnology Clinical Trials (BBC): $23.36, -$0.17, +26.9% YTD

BioShares Biotechnology Products (BBP): $37.55, -$0.71, +14.7% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures inched higher, while the dollar traded in tight range as markets waited for clues on the pace of the U.S. interest rate hikes this year. European shares rose as basic resource and oil stocks rallied, while Asian stocks closed lower mostly. Inflation, retail sales, Fed funds target rate and NY Fed manufacturing data are slated for release later in the day. Oil climbed more than one percent, buoyed by a surprise drawdown in U.S. inventories. Gold was little changed.

 

 

MARKET HIGHLIGHTS

 

TRACON Pharmaceuticals has entered into a Common Stock Purchase Agreement of up to $21.0 million with Aspire Capital Fund, LLC (“Aspire Capital”). Under the terms of the Agreement, Aspire Capital has made an initial purchase of $1.0 million of TRACON common stock at $4.50 per share. In addition, Aspire Capital has committed to purchase up to $20.0 million of additional shares of the Company’s common stock at TRACON’s request from time to time during a 30 month period beginning on the effective date of a registration statement related to the transaction and at prices based on the market price at the time of each sale. There are no warrants, derivatives, or other share classes associated with this agreement. Proceeds from the Agreement will be used to further advance the Company’s drug development pipeline and for general corporate purposes.

 

DURECT Corporation announced financial results for the three months and year ended December 31, 2016.  Total revenues were $3.5 million and net loss was $8.8 million for the three months ended December 31, 2016 as compared to total revenues of $5.2 million and net loss of $5.8 million for the three months ended December 31, 2015.  Total revenues were $14.0 million and net loss was $34.5 million for the year ended December 31, 2016, compared to total revenues of $19.1 million and net loss of $22.7 million for the year ended December 31, 2015.  At December 31, 2016, cash and investments were $25.2 million, compared to cash and investments of $29.3 million at December 31, 2015. Debt at December 31, 2016 was $19.9 million.

 

Arena Pharmaceuticals reported financial results for the fourth quarter and full-year ended December 31, 2016.  For the full year ended December 31, 2016, revenues totaled $124.0 million, including $26.3 million in net product sales of BELVIQ, $12.3 million of milestone payments earned from Eisai and Ildong for BELVIQ, and $72.1 million of revenue associated with upfront BELVIQ payments.  Net loss was $22.9 million, or $0.09 per share.  At December 31, 2016, cash and cash equivalents totaled $90.7 million and approximately 243 million shares of Arena common stock were outstanding.

 

Achaogen reported financial results for the fourth quarter and year ended December 31, 2016.  Unrestricted cash, cash equivalents and short-term investments totaled $145.9 million at December 31, 2016 compared to $58.7 million at December 31, 2015.  Net loss for the fourth quarter of 2016 was $29.7 million, or $1.04 per share, compared to a net loss of $11.3 million, or $0.61 per share, for the fourth quarter of 2015. For the year ended December 31, 2016, net loss was $71.2 million, or $3.00 per share, compared to a net loss of $27.1 million, or $1.49 per share, for the year ended December 31, 2015.

 

Ignyta announced company highlights and financial results for the full year ended December 31, 2016.  For the 2016 fiscal year, net loss was $103.6 million, or $2.69 per share, compared with $92.5 million, or $3.44 per share, for the 2015 fiscal year.  At December 31, 2016, the company had cash, cash equivalents, and investment securities totaling $133.0 million and current and long-term debt of $32.0 million.

 

Mateon Therapeutics announced preliminary data from the third dose cohort of the ongoing Phase 1b study OX1222 in patients with relapsed/refractory Acute Myeloid Leukemia (AML) or Myelodysplastic Syndrome (MDS). OX1222 is a dose-ranging Phase 1b study of OXi4503 combined with cytarabine. The third dose cohort enrolled four patients who received a dose of 6.25 mg/m2 of OXi4503 in combination with an intermediate dose (1g/m2/day x 5 days) of cytarabine.  One patient (25%) in the third dose cohort – who has a high risk TP53 gene mutation – had a complete remission. Two other patients demonstrated evidence of AML blast reduction after one cycle, one of which is receiving additional cycles of OXi4503 plus cytarabine therapy, the other of which has since progressed. The fourth patient did not show a response and experienced progressive disease. There were no dose-limiting toxicities observed in this cohort, and the safety review committee has recommended that we proceed to the fourth cohort, which is now enrolling patients at an OXi4503 dose of 7.81 mg/m2.

 

BioTime announced that a poster presentation based on data from its Phase I/IIa clinical trial of OpRegen® in the advanced form of dry age-related macular degeneration (dry-AMD) will be presented at the Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO) on Monday, May 8, 2017, in Baltimore, Maryland.

 

Aimmune Therapeutics announced financial results for the fourth quarter and full year 2016.  For the quarter and year ended December 31, 2016, net loss was $25.0 million and $80.8 million, respectively, compared to a net loss of $16.0 million and $35.8 million for the comparable periods in 2015.  Cash, cash equivalents, and investments totaled $282.5 million at December 31, 2016, compared to $199.8 million at December 31, 2015. The increase reflects the $145.0 million equity investment by Nestlé Health Science in November 2016, partially offset by cash used in operations.

 

Advaxis presented data from the GOG-0265 study at the Society of Gynecologic Oncology’s Annual Meeting on Women’s Cancer in National Harbor, MD. GOG-0265 is a single arm, Phase II trial evaluating axalimogene filolisbac for the treatment of persistent or recurrent metastatic (squamous or non-squamous cell) carcinoma of the cervix (PRmCC).  The primary endpoints of the study were to assess the safety and efficacy of axalimogene filolisbac in women with PRmCC.  The primary efficacy endpoint was overall survival at 12 months from initial treatment with axalimogene filolisbac. The primary safety endpoints were to evaluate the number of patients with dose-limiting toxicities and the frequency and severity of adverse effects. The final efficacy results of GOG-0265 demonstrated that 38% of patients (n = 19/50) with heavily pretreated PRmCC were alive 12 months following treatment with axalimogene filolisbac.  The GOG-0265 study protocol used a logistic model-based calculation to establish the expected 12-month survival rate. The model identified the key prognostic factors of age, race and performance status significantly related to survival from a database of approximately 500 patients with PRmCC who participated in 17 previous phase 2 studies conducted by the Gynecologic Oncology Group (GOG), now part of NRG Oncology.  Using this model, the expected 12-month survival rate of patients enrolled in the study was calculated to be 24.5%.  As a result, the 38% 12-month survival rate of patients treated with axalimogene filolisbac represents a 52% improvement over the expected survival rate and is the highest 12-month survival rate achieved to date in this setting.  The probability of this survival improvement being detected by chance versus a true treatment effect was calculated to be 0.02.  A compelling and ongoing complete response of 18.5 months was observed and the longest ongoing survival is 40.6 months.

 

VBL Therapeutics will provide a corporate overview at the Oppenheimer 27th Annual Healthcare Conference on Wednesday, March 22nd @ 9:10am Eastern Time.

 

Zogenix will provide a corporate overview at the Oppenheimer 27th Annual Healthcare Conference on Wednesday, March 22 @ 2:10pm Eastern Time.

 

Cesca Therapeutics announced encouraging data from a study evaluating the use of autologous platelet rich plasma (PRP) for the treatment of chronic non-healing ulcers. Results from the 24 patient study entitled “Treatment of chronic non-healing ulcers using autologous platelet rich plasma: a case series” were published in the peer-reviewed, Journal of Biomedical Science. The study was led by researchers from TotipotentRX, a subsidiary of Cesca Therapeutics, and Fortis Memorial Research Institute.

 

Catalyst Pharmaceuticals announced positive top-line results from the investigator-sponsored trial evaluating Firdapse (Amifampridine Phosphate) as a treatment for myasthenia gravis patients with anti-MuSK antibodies (MuSK-MG). MuSK-MG, is an ultra-rare sub-population of myasthenia Gravis (MG) patients which is a debilitating neuromuscular disease, and there are currently no FDA approved therapies for this specific form of MG.  Both of the co-primary efficacy endpoints of change from baseline (CFB) in total Quantitative Myasthenia Gravis (QMG) score and CFB in total Myasthenia Gravis Activities of Daily Living (MG-ADL) score were statistically and clinically significant in this seven patient trial. Several secondary efficacy measures also achieved statistical significance. Amifampridine phosphate was well tolerated in this population of patients.

 

DBV Technologies operating income for the full year of 2016 was €9.1 million, an increase of 47% compared to 2015.  In 2016, income was mainly generated by the Company’s research tax credit (Crédit Impôt Recherche) and by income recognized under the May 2016 collaboration agreement with Nestlé Health Science, and more marginally, by subsidies received for research projects conducted by the Company. The Company’s net loss for the full year 2016 was €(114.5) million compared to €(44.7) million in 2015. The loss per share (based on the weighted average number of shares outstanding over the period) was €(4.68) and €(2.08) for 2016 and 2015, respectively.

 

Kite Pharma highlighted the publication of results in the Journal of Clinical Oncology from a National Cancer Institute (NCI) study of anti-CD19 chimeric antigen receptor (CAR) T-cell therapy in patients with relapsed/refractory non-Hodgkin lymphoma (NHL). The research, led by James N. Kochenderfer, M.D., an investigator in the Experimental Transplantation and Immunology Branch of the NCI Center for Cancer Research, was performed pursuant to a CRADA between NCI and Kite.

 

Amgen announced that four-year follow-up results from the Repatha (evolocumab) OSLER-1 study, the longest PCSK9 inhibitor clinical trial to date, were published in JAMA Cardiology. Repatha, when added to standard of care (SOC), achieved median low-density lipoprotein cholesterol (LDL-C) reductions of 57 percent at four years, with no new safety concerns identified and no neutralizing antibodies observed with cumulative exposure.

 

Merck announced that the FDA has extended the action date for the sBLA for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, for previously treated patients with advanced microsatellite instability-high (MSI-H) cancer. The company recently submitted additional data and analyses to the FDA related to the pending application. The submission of additional data is considered a major amendment to the sBLA under the PDUFA, thus extending the target action date by three months. The new FDA target action date is June 9, 2017. Merck continues to work closely with the FDA to support the review of this sBLA and looks forward to further advancing the science of immuno-oncology in MSI-H cancer.

 

Merck announced that the FDA has approved KEYTRUDA (pembrolizumab), the company’s anti-PD-1 (programmed death receptor-1) therapy, for the treatment of adult and pediatric patients with refractory classical Hodgkin lymphoma (cHL), or who have relapsed after three or more prior lines of therapy. Under the FDA’s accelerated approval regulations, this indication is approved based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. In refractory or relapsed cHL, KEYTRUDA is approved for use in adult patients at a fixed dose of 200 mg and in pediatric patients at a dose of 2 mg/kg (up to a maximum of 200 mg).

 

Revance Therapeutics entered into a Technology Transfer, Validation and Commercial Fill/Finish Services Agreement with Ajinomoto Althea, a contract development and manufacturing organization. Under the Services Agreement, Althea has agreed, among other things, to provide the Company with a future source of commercial fill/finish services for the Company’s neuromodulator products. The Services Agreement provides the Company expanded capacity and a second source of drug product manufacturing to support a global launch of DaxibotulinumtoxinA for Injection (RT002). The Services Agreement also mitigates supply chain risk by giving the Company a different manufacturing location than its current site and reduces future capital and operating expenditures required in the Company’s primary manufacturing facility by outsourcing to an experienced partner.

 

Ocular Therapeutix announced positive results of a patient experience study of DEXTENZA (dexamethasone insert) 0.4 mg for intracanalicular use. The study, published in Patient Preference and Adherence, evaluated the overall patient experience and perceived value of DEXTENZA following cataract surgery.

 

InVivo Therapeutics Holdings announced that the Medicines Healthcare Products Regulatory Agency (MHRA) has approved the company’s Clinical Trial Authorization Application to commence clinical studies in the United Kingdom (UK). The approval will allow the company to enroll patients from the UK into the ongoing INSPIRE study once InVivo receives a favorable opinion from a Research Ethics Committee (REC), Health Regulatory Approval (HRA), and a site is open for enrollment. InVivo currently is in late-stage conversation with various clinical sites, and its first UK site opening should occur in the coming weeks.

 

Immunomedics announced that sacituzumab govitecan (IMMU-132), the Company’s lead antibody-drug conjugate (ADC), was highly active in heavily-pretreated patients with metastatic triple-negative breast cancer (TNBC) who received a median of five lines of therapy since diagnosis. Results from this single-arm Phase II study were published online in the Journal of Clinical Oncology, the official journal of the American Society of Clinical Oncology (ASCO), which is a premier peer-reviewed, publication in clinical cancer research. A print version of the results will also be available in due course.

 

aTyr Pharma announced the issuance of US Patent Number 9,428,743, which represents the successful completion of an important aTyr milestone – the issuance of patents that cover Physiocrines derived from all 20 human tRNA synthetases. In addition, the patent portfolio covers all of aTyr’s three current programs in three different therapeutic areas.

 

Resverlogix announced the receipt of a Notice of Allowance from the USPTO for patent claims covering the use of apabetalone in combination with Rosuvastatin in the United States. Rosuvastatin was exclusively marketed by AstraZeneca under the trade name Crestor until its patent expired in 2016. The allowed patent is entitled: "Compositions and Therapeutic Methods for Accelerated Plaque Regression," and covers claims for both a single composition as well as separate compositions of the two drugs.  Resverlogix has similar claims pending in other jurisdictions.

 

Valeant Pharmaceuticals wholly owned subsidiary Bausch + Lomb announced the introduction of Biotrue ONEday for Astigmatism daily disposable contact lenses. Approximately 73.2 million people in the U.S. are astigmatic, but only 8.8 million people are currently wearing toric contact lenses. Biotrue ONEday for Astigmatism helps eye care practitioners capture this astigmatic opportunity by offering patients the convenience of a daily disposable contact lens with the innovation of an evolved peri-ballast design for stability and a unique dehydration barrier to help the lens maintain 98% of its moisture for up to 16 hours.

 

Adaptimmune Therapeutics announced that it has broadened its executive team with the appointment of co-founder, Helen Tayton-Martin, Ph.D., M.B.A, to the newly-created role of Chief Business Officer, and Mr. William (Bill) Bertrand, Jr., J.D., as Chief Operating Officer. Both appointments are effective immediately.

 

Versartis announced the appointment of Tracy Woody as Chief Commercial Officer. Ms. Woody will be responsible for leading the Company’s efforts to prepare for launch and to commercialize somavaratan in the U.S. and Europe, pending regulatory approval.

 

 

ANALYST RECOMMENDATIONS

 

Rodman & Renshaw analyst Joseph Pantginis initiated coverage of Applied Genetic Technologies with a “buy” rating and $16 price target, citing AGTC has the capability to target specific tissue types and drive gene expression appropriate for that tissue.

 

Morgan Stanley analyst Steve Beuchaw upgraded Aglient to “overweight” from “equal-weight” and increased his price target to $55 from $62, citing Agilent has outgrown the Tools group by 100-200bps since 2014, and the company is better positioned than peers to benefit from an emerging cyclical recovery, yet the multiple relative to Tools has compressed by ~20% over the same period.

 

Morgan Stanley analyst Andrew Berens revised his price target of Tesaro and Clovis following AstraZeneca’s presentation of Lynparza data from the SOLO-2 trial that was in-line with that seen in Tesaro’s NOVA trial, with a median PFS of 19.1 months and a hazard ratio of 0.30; Tesaro decreased to $182 from $186; Clovis increased to $79 from $72.

 

Following AstraZeneca’s presentation a from a Ph3 SOLO-2 maintenance ovarian cancer trial of Lynparza (PARP inhibitor) the following analysts revised their price target of Clovis, Goldman analyst Terence Flynn increased his price target to $75 from $44, Janney analyst Debjit Chattopadhyay increased his price target to $50 from $44; Credit Suisse analyst Kennen MacKay increased his price target to $74 from $70.

 

Following AstraZeneca’s presentation a from a Ph3 SOLO-2 maintenance ovarian cancer trial of Lynparza (PARP inhibitor) the following analysts revised their price target of Tesaro, Cowen analyst Boris Peaker decreased his price target to $145 from $155; Baird analyst Michael Ulz decreased his price target to $165 from $182; SunTrust analyst Peter Lawson decreased to $219 from $221; Wedbush analyst David Nierengarten decreased his price target $164 from $200.

 

Canaccord analyst John Newman increased his price target of Kite Pharma to $90 from $75, citing expectations for US FDA approval for KTE-C19 in advanced DLBCL during 2017, the recent equity raise for KITE, and higher probability of approval for indications outside of DLBCL.