BioShares Biotechnology Clinical Trials (BBC): $22.40, +$0.13, +21.7% YTD

BioShares Biotechnology Products (BBP): $37.30, +$0.07, +13.9% YTD

 

 

MARKET COMMENTARY

 

Global markets were down and Wall Street looked set to open lower on concerns that U.S. President Donald Trump’s reform agenda could be slowed down and that Trump could even face the threat of impeachment. The dollar weakened against a basket of currencies after a source said U.S. President Donald Trump asked the FBI to end a probe into his former security adviser. Gold traded higher on increased demand for safe-haven assets. Oil prices rose even as an industry data showed a surprise increase in U.S. crude inventories, defying expectations of a drop.

 

 

MARKET HIGHLIGHTS

 

Eiger BioPharmaceuticals announced publication in Science Translational Medicine (STM) the results of extensive preclinical studies of ubenimex in which modulation of the inflammatory mediator, leukotriene B4 (LTB4), improved experimental lymphedema.  Targeted reduction of LTB4 with ubenimex reversed edema, improved lymphatic function and restored lymphatic architecture in experimental models of lymphedema.  The technology was invented by Stanley Rockson, MD, Professor of Cardiovascular Medicine at Stanford University, which Eiger exclusively licensed in 2015.  Based on these findings, Eiger is conducting ULTRA, a multi-center, Phase 2 clinical study of ubenimex in Secondary Lymphedema, currently enrolling at multiple sites in the U.S. and Australia.

 

Arena Pharmaceuticals will present detailed Phase 1 data on ralinepag (APD811), the Company’s next-generation, oral, selective prostacyclin receptor (IP) agonist intended for the treatment of pulmonary arterial hypertension (PAH), on May 23 at the American Thoracic Society (ATS) 2017 International Conference. The conference is taking place May 19-24 at the Walter E. Washington Convention Center in Washington, D.C.

 

Prothena Corporation appointed Sarah Noonberg, MD, PhD, as Chief Medical Officer. Dr. Noonberg will have key responsibilities to define and advance Prothena`s product pipeline and for leadership of Prothena`s clinical and medical organizations. She succeeds Martin Koller, MD, whose planned retirement from Prothena at the end of 2017 was previously announced.

 

Aeglea BioTherapeutics will be presenting at the UBS 2017 Global Healthcare Conference in New York on Tuesday, May 23.

 

Lysogene announced the nomination of Philippe Mendels-Flandre as Chief Operating Officer. Mr. Mendels-Flandre’s arrival reinforces Lysogene’s Management Team in order to accompany its new strategic growth goals. As such, he will supervise all financial activities of the company as well as partnerships and Business Development initiatives. Mr. Mendels-Flandre will be a member of the Executive Committee.

 

Zealand Pharma announced financial results in line with guidance for the three-month period from January 1 to March 31, 2017.  The Company reported revenue of DKK 77.6 million (6.7 million in 1Q16), including milestone revenue of DKK 69.6 million.  The cash position amounted to DKK 417.0 million at March 31, 2017 (December 31, 2016: 642.1 million). This includes restricted cash of DKK 6.7 million (December 31, 2016: 318.7 million) held as collateral for the royalty bond.

 

Coherus BioSciences announced that the Patent Trial and Appeal Board (“PTAB”) of the USPTO ruled in favor of Coherus’ petitions for Inter Partes Review (“IPR”) of AbbVie’s U.S. Patent 8,889,135 (the ‘135 Patent).  The PTAB’s decision invalidates all claims of the patent that were directed to a method for treating rheumatoid arthritis by administering 40 mg of HUMIRA subcutaneously every 13 to 15 days.

 

Concert Pharmaceuticals announced that it has received notice from the FDA that its CTP-543 Phase IIa clinical trial for alopecia areata has been placed on clinical hold. The FDA had previously informed the Company that it could initiate the Phase IIa clinical trial; however, subsequent to its initiation, but prior to dosing subjects, the FDA informed the Company that a review of certain recently completed non-clinical toxicology studies is required before proceeding. The FDA did not cite a safety concern; however, they intend to review these additional non-clinical data as support for the one-year dosing duration as planned in the Phase IIa trial.

 

Omeros announced completion of the IgA nephropathy cohort and reported additional positive results from the first stage of the company’s Phase II clinical trial of OMS721 for the treatment of serious kidney disorders. All patients in the cohort have now completed the OMS721 treatment and follow-up periods. The additional Phase II results in IgA nephropathy patients expand on the data reported earlier this year and further demonstrate marked and statistically significant improvement in urine protein levels (proteinuria). Proteinuria reduction is associated with slowing progression of kidney functional loss, and greater proteinuria reductions are associated with progressively better prognoses. OMS721 is Omeros’ lead human monoclonal antibody targeting mannan-binding lectin-associated serine protease-2 (MASP-2), the effector enzyme of the complement system’s lectin pathway.

 

Aldeyra Therapeutics presented the results of a randomized, multi-center, investigator-masked, comparator-controlled, parallel-group Phase II clinical trial of topical ocular ADX-102, a first-in-class aldehyde trap, as an Emerging Treatments paper at the Association for Research in Vision and Ophthalmology (ARVO) 2017 Annual Meeting. Data from the trial demonstrated ADX-102 activity comparable to standard-of-care topical ocular corticosteroids in reducing anterior chamber cell count in patients with active noninfectious anterior uveitis (NAU). Unlike corticosteroid therapy, ADX-102 did not increase intraocular pressure, a major corticosteroid side effect that can lead to glaucoma, a potentially blinding chronic condition.

 

Tenax Therapeutics provided an update on its recent pre-NDA meeting with the FDA. Tenax met with the FDA on May 10, 2017 to review additional data analyses from the recently completed Phase III LEVO-CTS clinical study of levosimendan in cardiac surgery patients at risk of LCOS. The discussion with the FDA built on previously presented primary data analyses of the LEVO-CTS trial that identified a significant interaction in levosimendan’s effectiveness across surgery types enrolled in the study.

 

Aduro Biotech announced the expansion of its clinical collaboration with Merck (known as MSD outside the United States and Canada) to include an additional Phase II clinical trial. The companies will investigate the combination of CRS-207, Aduro’s LADD (live, attenuated double-deleted) based immunotherapy, with KEYTRUDA (pembrolizumab), Merck’s anti-PD-1 therapy, for the treatment of patients with malignant pleural mesothelioma (MPM) whose disease progressed following prior treatment. Earlier this year, Aduro announced a Phase II clinical collaboration with Merck, through a subsidiary, to evaluate the combination of CRS-207 with pembrolizumab for the treatment of gastric cancer.

 

Aytu BioScience announced that it presented one poster presentation illustrating safety benefits of Natesto therapy and its preservation of pituitary gonadotropin hormones, which are integral in male fertility.  A podium session was also presented, which demonstrated significant improvement in all domains of erectile function as well as improvement in mood with Natesto therapy.

 

Swedish Orphan Biovitrum announced that the Saudi Food and Drug Administration (SFDA) has approved Orfadin (nitisinone) capsules in all strengths (2 mg, 5 mg, 10 mg and 20 mg) for the treatment of hereditary tyrosinemia type 1 (HT-1) in combination with dietary restriction of tyrosine and phenylalanine. HT-1 is a progressive, rare genetic disease that may result in liver and kidney complications and in most cases fatal if untreated. In the most common form of the disease, symptoms arise within the first six months of the child’s life.

 

Dr. Reddy’s Laboratories announced that it has received approval from the FDA to launch Doxorubicin Hydrochloride Liposome Injection, a therapeutic equivalent generic version of Doxil (doxorubicin hydrochloride liposome injection), for intravenous use, in the United States market. FDA approval is an outcome of extensive collaboration with the company’s partner, Natco Pharma on R&D and manufacturing capabilities.

 

CytoDyn announced the treatment of the first patient in its Phase II clinical trial for Graft versus Host Disease (GvHD), its leading immunologic indication for PRO 140.

 

Egalet announced that data on the properties of ARYMO ER (morphine sulfate) extended-release tablets for oral use only –CII has been published. ARYMO ER, formulated with Egalet’s Guardian Technology, is approved for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.

 

Salix Pharmaceuticals and parent Valeant Pharmaceuticals International and Actavis Laboratories, at Actavis’ request, have agreed to stay outstanding litigation and extend the 30-month stay regarding Actavis’ ANDA for a generic version of Xifaxan (rifaximin) 550 mg tablets.

 

Bayer announced that the FDA has granted Priority Review designation for the NDA for copanlisib for the treatment of relapsed or refractory follicular lymphoma (FL) patients who have received at least two prior therapies.

 

Syndax Pharmaceuticals reported that the ENCORE 601 non-small cell lung cancer (NSCLC) cohort enrolling patients with disease progression on or after PD-1 therapy (programmed death receptor-1 (PD-1) and/or programmed death ligand 1, (PD-L1)) has met the pre-specified objective response threshold to advance into the second stage of the Phase II trial, and will re-open enrollment immediately.

 

Astellas Pharma announced that it has completed the acquisition of Ogeda SA and Ogeda has become a wholly owned subsidiary of Astellas as of CET May 17, 2017. Under the share purchase agreement executed between Astellas and Ogeda shareholders, Astellas paid EUR 500 million to acquire 100% of the equity in Ogeda. In addition, Ogeda shareholders will become eligible to receive up to EUR 300 million in further contingent payments based on progress in the development of fezolinetant, Ogeda’s most advanced clinical program for the treatment of menopausal-related vasomotor symptoms. This transaction expands Astellas’ late stage pipeline and is expected to contribute to its mid-to-long term growth.

 

Newron Pharmaceuticals announced that the Sarizotan Treatment of Apneas in Rett Syndrome (STARS) study has been expanded to include Rett syndrome patients as young as six years of age. An amendment to allow the inclusion of the patients under the age of 13 was approved by the FDA after Newron submitted results from juvenile toxicology studies. Newron is also submitting the amendment to Health Authorities and Institutional Review Boards in other countries.

 

Dermira announced the closing of its previously announced offering of 3.00% Convertible Senior Notes due 2022 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Dermira issued $287.5 million aggregate principal amount of notes, including $37.5 million aggregate principal amount of notes issued pursuant to the initial purchasers’ exercise in full of the over-allotment option. The net proceeds from the offering were approximately $278.1 million after deducting fees and commissions and estimated offering expenses payable by Dermira. The notes are senior, unsecured obligations of Dermira. Dermira intends to use the net proceeds that it receives from the offering for working capital, capital expenditures and other general corporate purposes. Dermira may also use a portion of the net proceeds from the 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. Leerink Partners and Cowen and Company acted as joint book-running managers for the offering, and Mizuho Securities and Needham & Company acted as co-managers for the offering. Evercore Group acted as Dermira’s financial advisor for the offering.

 

Conatus Pharmaceuticals announced the completion of its previously announced underwritten public offering of 5,980,000 shares of its common stock, including 780,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. All shares in the offering were sold by Conatus at a price to the public of $5.50 per share. Net proceeds from the offering, after deducting underwriting discounts and commissions and estimated offering expenses, are expected to be approximately $30.6 million. Conatus intends to use approximately $19.4 million of the net proceeds from the offering to fund pipeline expansion and for working capital and other general corporate purposes. Conatus used approximately $11.2 million of the net proceeds to repurchase and retire 2,166,836 shares of common stock held by funds affiliated with Advent Private Equity at a price equal to the net proceeds per share that Conatus received from this offering, before expenses. Stifeland SunTrust Robinson Humphrey acted as book-running managers for the offering.

 

G1 Therapeutics announced the pricing of its initial public offering of 7,000,000 shares of common stock at a public offering price of $15.00 per share for aggregate gross proceeds of $105,000,000. In addition, G1 Therapeutics has granted the underwriters a 30-day option to purchase up to 1,050,000 additional shares of its common stock at the initial public offering price. J.P. Morgan Securities and Cowen and Company are acting as joint book-running managers for the offering. Needham & Company and Wedbush Securities are acting as co-managers for the offering.

 

 

ANALYST RECOMMENDATIONS

 

Cantor analyst Chiara Russo upgraded BioDelivery Sciences to “overweight” from “neutral” and increased her price target to $4 from $3, citing a commercial execution inflection point, consisting of growing Belbuca Rx coupled with a strong shift into commercial payors.

 

JP Morgan analyst Cory Kasimov upgraded Clovis to “overweight” from “neutral” and increased his price target to $72 from $58, citing the pullback in shares over the past two months and a probable scenario for ARIEL3 to look largely similar to NOVA.

Goldman analyst Terence Flynn initiated coverage of Acceleron with a “sell” rating and $20 price target, citing a lack of meaningful catalysts this year.

 

BMO analyst Gary Nachman increased his price target of Endo International to $16 from $15, citing a solid performance in generics and good cost management drove a healthy bottom line beat.