BioShares Biotechnology Clinical Trials (BBC): $21.35, +$0.22, +16.0% YTD

BioShares Biotechnology Products (BBP): $37.18, +$0.58, +13.5% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were trading lower as U.S. President Donald Trump’s abrupt firing of FBI chief James Comey weighed on risk appetite. The dollar fell against a basket of major currencies on the view that political uncertainty could derail Trump’s tax reform plans, while gold edged up. Twenty-First Century Fox, Snap Inc, Symantec and Whole Foods Market are some of the major companies scheduled to report quarterly results later in the day. European markets fell as disappointing results weighed on individual stocks, while Asian shares ended broadly higher. Oil prices rose after an industry group reported larger than expected fall in U.S. crude inventories.

 

 

MARKET HIGHLIGHTS

 

Prothena Corporation reported financial results for the first quarter of 2017.  Prothena reported a net loss of $35.4 million for the first quarter of 2017, as compared to a net loss of $27.5 million for the first quarter of 2016. Net loss per share for the first quarter of 2017 was $0.99, as compared to a net loss per share for the first quarter of 2016 of $0.81. As of March 31, 2017, Prothena had $510.6 million in cash, cash equivalents and restricted cash, and no debt.

 

Ocera Therapeutics reported financial results for the quarter ended March 31, 2017.  Net loss for the quarter was $6.7 million compared to a net loss of $7.5 million for the same period in 2016. Basic and diluted net loss per share were $0.28 for the quarter compared to basic and diluted net loss per share of $0.36 for the same period in 2016. As of March 31, 2017, Ocera had cash, cash equivalents and marketable securities of $25.2 million.

 

Rockwell Medical reported results for the quarter ended March 31, 2017.  The net loss was $4.7 million or ($0.09) per share in the first quarter of 2017, compared to a $4.8 million loss or ($0.10) per share in the first quarter of 2016.  The Company had cash and investments of $52.7 million as of March 31, 2017.

 

Rockwell Medical announced that it has filed an investor presentation with the Securities and Exchange Commission in connection with the Company’s upcoming 2017 Annual Meeting of Shareholders to be held on June 1, 2017.

 

Arena Pharmaceuticals reported financial results for the first quarter ended March 31, 2017.  The company reported a net loss for the quarter of $22.5 million, or $0.09 per share.  At March 31, 2017, cash and cash equivalents totaled $79.5 million, and approximately 248 million shares of Arena common stock were outstanding. This does not include the $75.5 million in net proceeds received through April 21, 2017, for issuing and selling approximately 70 million shares of common stock under the equity financing and the Company’s at-the-market sales agreement.

 

Ignyta announced the closing of its previously announced underwritten public offering of 14.375 million shares of its common stock at a price to the public of $6.15 per share, which includes 1.875 million additional shares of common stock issued upon the exercise in full of the underwriters’ option to purchase additional shares. The aggregate gross proceeds from this offering are approximately $88.4 million, before deducting the underwriting discounts and commissions and estimated offering expenses.

 

Heron Therapeutics reported financial results for the three months ended March 31, 2017.  Heron’s net loss for the three months ended March 31, 2017 was $50.3 million, or $1.00 per share, compared to $33.4 million, or $0.92 per share for the same period in 2016.  In January 2017, Heron completed an underwritten public offering of its common stock for net proceeds of $163.7 million. As of March 31, 2017, the Company had cash, cash equivalents and short-term investments of $165.2 million, compared to $51.1 million as of December 31, 2016. Based on the Company’s current operating plan and projections, it believes that available cash, cash equivalents and short-term investments are sufficient to fund operations for at least one year.

 

Heron Therapeutics will present at the Bank of America Merrill Lynch 2017 Healthcare Conference on Tuesday, May 16, 2017, at 2:20 p.m. Pacific Time.

 

Foamix Pharmaceuticals announced today financial results for the three months ended March 31, 2017.  Net loss was $14.4 million or $0.39 per share, basic and diluted, compared with a loss of $4.5 million or $0.15 per share, basic and diluted, for the three months ended March 31, 2016.  Cash and investments as of March 31, 2017 totaled $118.7 million, compared with $131.0 million as of December 31, 2016.

 

Neovacs and Lupus Europe, umbrella association of, currently, 24 national lupus patient organisations from 22 member countries throughout Europe, together join voices on the occasion of World Lupus Day in order to raise awareness about this chronic and debilitating autoimmune disease – whose origin is still poorly understood by the general population, but also decision makers.

 

Bellerophon Therapeutics announced that it has entered into a definitive agreement with a single institutional investor for an offering of shares of its common stock with gross proceeds of $3.0 million in a registered direct offering. The closing of the offering is expected to take place on or about May 15, 2017, subject to the satisfaction of customary closing conditions.

 

Sierra Oncology reported that it has received clearance from regulators in the UK to amend the two ongoing Phase 1 trials for its Chk1 inhibitor, SRA737. The amended trials will include cohort expansions of prospectively selected patients with tumors identified to have genetic aberrations hypothesized to confer sensitivity to Chk1 inhibition.

 

OncoSec Medical has entered a clinical trial collaboration and supply agreement with Merck (known as MSD outside the United States and Canada) to evaluate the combination of OncoSec’s ImmuoPulse® IL-12 with Merck’s anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in a Phase II clinical trial, referred to as PISCES. The planned clinical trial will evaluate the safety and efficacy of the combination in patients with metastatic melanoma following disease progression on previous treatment with an anti-PD-1 therapy.

 

TiGenix NV announced that Dr. Marie Paule Richard, Chief Medical Officer of TiGenix, will present at the Crohn’s and Colitis Foundation’s Novel Technologies in Inflammatory Bowel Disease (IBD) Workshop, taking place on May 15-16, 2017 at the Doubletree by Hilton Metropolitan New York Hotel.

 

STRATA Skin Sciences announced the appointment of James L. Coyne to its Board of Directors.

 

Proteon Therapeutics announced that its investigational treatment, vonapanitase, has received Breakthrough Therapy designation from the FDA for increasing arteriovenous fistula secondary patency (i.e., survival of the fistula without abandonment) and use for hemodialysis in patients on or expected to initiate hemodialysis.

 

Opko Health reported 1Q17 non-GAAP EPS loss of $0.06, which compares to a loss of $0.02 for the same period a year ago. The company missed the GAAP EPS mean estimate loss of $0.04. Total revenue for 1Q17 was $296.1 million, which compares to $291.0 million for the same period a year ago. This compares to a mean estimate of $313.4 million.

 

Ligand Pharmaceuticals reported 1Q17 GAAP EPS of $0.22, which compares to $0.30 for the same period a year ago. The company missed the GAAP EPS mean estimate of $0.34. Total revenue for 1Q17 was $29.3 million, which compares to $29.6 million for the same period a year ago. This compares to a mean estimate of $31.2 million. Following earnings, Roth analyst Scott Henry increased his price target to $120 from $118.

 

Jazz Pharmaceuticals reported 1Q17 non-GAAP EPS of $2.31, which compares to $2.15 for the same period a year ago. The company missed the non-GAAP EPS mean estimate of $2.34. Total revenue for 1Q17 was $376.1 million, which compares to $336.0 million for the same period a year ago. This compares to a mean estimate of $377.0 million. Following earnings, Deutsche Bank analyst Gregg Gilbert decreased his price target to $174 from $176; Wells Fargo analyst David Maris decreased his price target to $178 from $179; Piper Jaffray analyst David Amsellem increased his price target to $182 from $181; Bernstein analyst Aaron Gal to $160 from $141.  

 

TESARO reported 1Q17 GAAP EPS loss of $2.55, which compares to a loss of $2.22 for the same period a year ago. The company missed the GAAP EPS mean estimate loss of $2.25. Total revenue for 1Q17 was $2.1 million, which compares to $0.3 million for the same period a year ago. This compares to a mean estimate of $3.8 million. Following earnings, FBR analyst Ed White decreased his price target to $200 from $202; Bairdanalyst Michael Ulz decreased his price target to $155 from $165.

 

Neurocrine BioSciences reported 1Q17 GAAP EPS loss of $0.90, which compares to a loss of $0.22 for the same period a year ago. The company missed the GAAP EPS mean estimate loss of $0.74. No revenue was reported for 1Q17, which compares to $15.0 million for the same period a year ago. This compares to a mean estimate of $3.8 million. Following earnings, BMO analyst Ian Somaiya increased his price target to $75 from $72; HC Wainwright analyst Andrew Fein increased his price target to $130 from $100.

 

Sage Therapeutics reported 1Q17 GAAP EPS loss of $1.52, which compares to a loss of $0.97 for the same period a year ago. The company beat the GAAP EPS mean estimate loss of $1.55. No revenue was reported for 1Q17, which compares to no revenue reported for the same period a year ago. 

 

Nektar Therapeutics reported 1Q17 GAAP EPS loss of $0.42, which compares to a loss of $0.14 for the same period a year ago. The company missed the GAAP EPS mean estimate loss of $0.41. Total revenue for 1Q17 was $24.7 million, which compares to $58.9 million for the same period a year ago. This compares to a mean estimate of $26.8 million. Following earnings, Jefferies analyst David Steinberg decreased his price target to $23 from $25.

 

Charles River Labs reported 1Q17 non-GAAP EPS of $1.29, which compares to $0.98 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $1.14. Total revenue for 1Q17 was $445.8 million, which compares to $354.9 million for the same period a year ago. This compares to a mean estimate of $437.1 million.

 

INC Research Holdings reported 1Q17 non-GAAP EPS of $0.60, which compares to $0.58 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $0.59. Total revenue for 1Q17 was $252.1 million, which compares to $249.0 million for the same period a year ago. This compares to a mean estimate of $250.5 million.

 

Reuters reported that Mylan reported first-quarter profit just above expectations, helped by demand for products it gained through the acquisition of Swedish drugmaker Meda, even as sales of its controversial EpiPen allergy shot declined. The company backed a prior forecast for a mid-single percentage digit erosion in prices of generic drugs in 2017. Mylan said net income surged to $66.4 million, or 12 cents per share in the first quarter ended March 31, from $13.9 million, or 3 cents per share, a year earlier. Excluding one-time items, Mylan earned 93 cents per share, beating analysts’ average estimate by 1 cent, according to Thomson Reuters I/B/E/S. Revenue rose 24 percent to $2.72 billion. Analysts on average had expected $2.84 billion.

 

Depomed reported financial results for the quarter ended March 31, 2017 and outlined a set of strategic initiatives aimed at positioning the company for future growth. First quarter 2017 GAAP revenues were $90 million, impacted by a one-time $4.7 million Managed Care rebate charge. Non-GAAP revenues were $95 million excluding the charge. The company reported quarterly GAAP net loss of ($27) million or ($0.43) per share and a quarterly non-GAAP adjusted earnings of $4 million, or $0.07 per share. Following Depomed’s earnings, Piper Jaffray analyst David Amsellem upgraded the stock to “neutral” from “underweight” and decreased his price target to $10 from $11;RBC analyst Randall Stanicky decreased his price target to $13 from $19. 

 

Argos Therapeutics provided an update on the ADAPT trial, a randomized, active controlled, open-label, multi-center Phase III trial of Rocapuldencel-T in combination with sunitinib/standard-of-care for the treatment of newly diagnosed metastatic renal cell carcinoma (mRCC), following a meeting with the FDA.

 

Array BioPharma announced top-line results from Part 2 of the Phase III COLUMBUS study evaluating binimetinib, a MEK inhibitor, and encorafenib, a BRAF inhibitor, in patients with BRAF-mutant advanced, unresectable or metastatic melanoma.  The primary analysis of Part 2 compared progression free survival (PFS) in patients treated with binimetinib 45mg twice daily plus encorafenib 300mg daily (COMBO300) to patients treated with encorafenib 300mg daily as a single agent. The median PFS for patients treated with COMBO300 was 12.9 months compared to 9.2 months for patients treated with single agent encorafenib, with HR of 0.77 [95% CI 0.61-0.97, p=0.029]. COMBO300 was generally well-tolerated and reported dose intensity and adverse events were consistent with COMBO450 results in COLUMBUS Part 1. Part 2 was designed specifically to assess the contribution of binimetinib to the combination of binimetinib and encorafenib by reducing the dose of encorafenib to 300mg in the combination arm to allow for a comparison of equal doses across arms. Further results from Part 2 will be presented at a medical meeting during the second half of 2017.

 

Atossa Genetics announced that it has received the second positive interim review on its Phase I study of endoxifen, which is an active metabolite of the FDA approved drug tamoxifen, which is indicated for breast cancer and breast cancer prevention in high risk patients. The Independent Safety Committee reviewed the blinded data generated from the second cohort of the study (8 subjects) and concluded that the study may advance to the final topical dosing level.

 

Vericel announced that the FDA has granted the Regenerative Medicine Advanced Therapy (RMAT) designation for ixmyelocel‑T, an investigational product for the treatment of patients with advanced heart failure due to ischemic dilated cardiomyopathy.  The RMAT designation is a new expedited program established under the 21(st) Century Cures Act to foster the development and approval of regenerative medicine products intended for the treatment of serious diseases and conditions.

 

Vericel announced that it has entered into a License Agreement with Innovative Cellular Therapeutics  for development, manufacturing and commercialization of the Vericel product portfolio. Under the terms of the agreement, ICT will acquire exclusive rights to develop and distribute Carticel, MACI, Ixmyelocel-T, and Epicel in Greater China, South Korea, Singapore, and other countries in the region. In connection with the license agreement, ICT will also enter in a warrant agreement with Vericel.

 

Aclaris Therapeutics announced that the FDA has accepted its NDA A-101 40% topical solution (A-101 40%), an investigational drug, for the potential treatment of seborrheic keratosis (SK), a common skin condition. The NDA acceptance by the FDA in its 74-day letter indicates that the application is sufficiently complete to permit a substantive review. The PDUFA target action date for the completion of the FDA’s review of the NDA is December 24, 2017. If approved, A-101 40% would be the first FDA-approved topical medication for the treatment of SK.

 

Pharnext SA announced the signature of a strategic agreement with Tasly Pharmaceutical. This partnership includes three axes: a financial investment by Tasly in Pharnext; the development of a new pipeline of synergistic combinations through a shared platform; and the license of Pharnext’s lead product for the Chinese market.

 

Genentech, a member of the Roche Group, announced that the Phase III IMvigor211 study that evaluated TECENTRIQ (atezolizumab) in people with locally advanced or metastatic urothelial cancer (mUC) whose disease progressed during or after treatment with a platinum-based chemotherapy (previously treated) did not meet its primary endpoint of overall survival (OS) compared to chemotherapy. The safety profile observed in IMvigor211 was consistent with what has been previously observed for TECENTRIQ.

 

Targovax ASA announced that the first patient has been recruited in the Company’s ONCOS-102 study in advanced or unresectable melanoma patients who have had progression following checkpoint inhibitor. The study is conducted at Memorial Sloan Kettering Cancer Center in New York.

 

Allergan announced that, subject to market and other conditions, the Company expects to commence an offering of euro-denominated senior unsecured notes in multiple tranches in the coming weeks. The notes, which are expected to have maturities of up to 12 years, will be issued in a registered public offering by Allergan’s indirect subsidiary, Allergan Funding SCS (f.k.a. Actavis Funding SCS), and guaranteed by its indirect subsidiaries Warner Chilcott Limited, Allergan Capital S.à r.l. (f.k.a. Actavis Capital S.à r.l.) and Allergan Finance, LLC (f.k.a. Actavis, Inc.) (the "Notes").

 

Loxo Oncology announced that the first patient has been enrolled in the Phase I clinical trial of LOXO-292, an investigational, highly potent and selective RET inhibitor. RET gene alterations are thought to play a key role in the development of certain cases of lung, thyroid, colon and other cancers.

 

PLx Pharma has been awarded a $1.9 million grant by the National Cancer Institute (NCI) of the National Institutes of Health (NIH) in support of PLx’s novel formulation of aspirin for chemoprevention of colorectal cancer.

 

Bristol-Myers Squibb and Calithera Biosciences announced the companies have expanded their existing collaboration to evaluate Bristol-Myers Squibb’s Opdivo in combination with Calithera’s CB-839 in patients with non-small cell lung cancer (NSCLC) and melanoma. CB-839 is an investigational orally administered glutaminase inhibitor currently in Phase I/II clinical studies.

 

uniQure presented new preclinical data demonstrating successful and effective transduction of AAV5 in non-human primates with pre-existing anti-AAV5 neutralizing antibodies (NABs). At all observed levels, pre-existing neutralizing antibodies for AAV5 did not have a negative impact on the transduction effectiveness of the AAV5 vector. This suggests a much broader potential population of eligible patients than previously expected for AAV5-based gene therapies, including AMT-060, uniQure’s investigational gene therapy in patients with severe hemophilia B.

 

Adaptimmune Therapeutics announced that it has initiated the first site for its AFP SPEAR T-cell study in patients with locally advanced or metastatic hepatocellular carcinoma, the sixth most common cancer worldwide. This study is now open for enrollment.

 

Inovio Pharmaceuticals announced MedImmuneAstraZeneca’s global biologics research and development arm, will start a new clinical trial investigating the combination of MEDI0457, an immunotherapy designed to generate antigen specific killer T cell responses targeting HPV-associated tumors, and durvalumab, an investigational PD-L1 checkpoint inhibitor. The combination trial will enroll patients with metastatic HPV-associated squamous cell carcinoma of the head & neck (SCCHN) with persistent or recurrent disease after chemotherapy treatment.

 

Fate Therapeutics announced that the FDA has authorized the Company’s IND application for FATE-NK100 in advanced solid tumors. The Company plans to promptly initiate the DIMENSION study, an open-label, multi-center, accelerated dose-escalation clinical trial of FATE-NK100 as a monotherapy and in combination with monoclonal antibody therapy in subjects who have failed approved therapies.

 

Savara announced that it has received guidance from the FDA on the clinical program requirements for a NDA submission in the U.S. for Molgradex, an inhaled formulation of recombinant human GM-CSF, for the treatment of autoimmune pulmonary alveolar proteinosis, or PAP. Based on the FDA’s guidance, Savara will modify the endpoint hierarchy and statistical analyses of its ongoing IMPALA study, currently enrolling patients in Europe and Japan, to qualify the study as a pivotal Phase III study in the U.S. The total number of patients to be enrolled will be increased from 51 to 90 to support the modified design. If successful, the amended study would serve as the sole pivotal study for regulatory submission for marketing authorization of Molgradex for the treatment of PAP in the U.S. in addition to Europe and Japan.

 

Dermira announced that it intends to offer, subject to market conditions and other factors, $250,000,000 aggregate principal amount of Convertible Senior Notes due 2022 in a private offering to qualified institutional buyers pursuant to the Securities Act of 1933, as amended. Dermira also intends to grant the initial purchasers of the notes a 30-day over-allotment option to purchase up to an additional $37,500,000 aggregate principal amount of notes. The notes will be senior, unsecured obligations of Dermira, and interest will be payable semi-annually in arrears. The notes will mature on May 15, 2022 and be convertible, at the option of the holders, into shares of Dermira’s common stock. The interest rate, initial conversion rate, initial effective conversion price and other terms of the notes will be determined at the time of pricing of the note offering. Dermira intends to use the net proceeds that it receives from the note offering for working capital, capital expenditures and other general corporate purposes. Dermira may also use a portion of the net proceeds from this offering to expand its business by in-licensing or acquiring, as the case may be, product candidates, technologies, compounds, other assets, commercial products or complementary businesses; however, Dermira has no current commitments or obligations to do so.

 

 

ANALYST RECOMMENDATIONS

 

Rodman & Renshaw analyst Joseph Pantginis initiated coverage of Lion Biotechnologies with a “buy” rating and $13 price target, citing 1) consistent clinical validation from several academics centers for the approach; 2) the belief that these centers’ successes should translate to Lion’s clinical success; 3) a strong and benign safety profile for TILs vs. CAR-Ts; and 4) early signs pointing to utility and effectiveness in solid tumors beyond melanoma (where CAR-Ts have faltered thus far).

 

Goldman analyst Jami Rubin downgraded Allergan to “neutral” from “buy” and increased her price target to $262 from $260, citing valuation.

 

Piper Jaffray analyst David Amsellem downgraded INSYS Therapeutics to “neutral” from “overweight” and decreased his price target to $10 from $20, citing prescription (Rx) trends for Subsys have been consistently weak and that will continue to be the case given the scrutiny of the opioid space and of INSY in particular.

 

RBC analyst Matthew Eckler increased his price target of Epizyme to $20 from $19, citing two upcoming data readouts. 

 

Following Fibrogen’s earnings, Leerink analyst Geoffrey Porges decreased his price target to $52 from $53; Goldman analyst Terence Flynn increased his price target to $31 from $30.