BioShares Biotechnology Clinical Trials (BBC): $22.23, -$0.59, +20.7% YTD

BioShares Biotechnology Products (BBP): $37.88, -$0.41, +15.7% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures were lower after Apple’s quarterly revenue missed expectations and as investors awaited the outcome of the two-day Federal Reserve meeting. The dollar inched up against most major currencies, while gold edged lower as investors look forward to FOMC’s statement for guidance on whether bets for a June interest rate hike are justified. Facebook, Kraft Heinz and MetLife are some of the major companies scheduled to report quarterly results after markets close. Markit’s Services PMI and ISM’s Non-manufacturing PMI data are on the economic radar. European markets slipped as investors locked in some profits following some underwhelming company results and Asian stocks recorded a mixed trading day. Oil prices rebounded from near 2017 lows after preliminary data showed a much larger-than-expected fall in U.S. crude stocks, reviving bullish sentiment about easing oversupply.

 

 

MARKET HIGHLIGHTS

 

TxCell SA and Inserm Transfert and the Nantes University announced the signature of a R&D collaboration agreement. This collaboration agreement complements the December 2016 exclusive worldwide licensing agreement pertaining to a new subset of Treg cells originated in one of the Inserm laboratories.  The agreement covers R&D activities to take place between TxCell and the Center for Research in Transplantation and Immunology (CRTI), a center of excellence in the field of transplantation and immunology. The CRTI is a research unit (UMR 1064) affiliated to both Inserm and to the Nantes University. TxCell and the CRTI will collaborate on the development of Chimeric Antigen Receptor (CAR) engineered CD8+Treg cells (CAR-Tregs). These comprise a proprietary Treg cell population expressing the CD8 marker (CD8+ Tregs). The collaboration will concentrate on the treatment of transplant rejection and autoimmune diseases, specifically focusing on multiple sclerosis. In addition, TxCell and the CRTI will develop a manufacturing process to enable clinical proof-of-concept studies.

 

TherapeuticsMD announced its financial results for the quarter ended March 31, 2017.  Net revenue from the company’s prescription prenatal vitamin business was approximately $4.0 million for the first quarter of 2017 compared with net revenue of approximately $4.9 million for the prior year’s quarter.  Net loss for the first quarter of 2017 was approximately $21.2 million, or $0.11 per basic and diluted share, compared with approximately $20.9 million, or $0.11 per basic and diluted share, for the first quarter of 2016.  At March 31, 2017, cash on hand was approximately $113.5 million, compared with approximately $131.5 million at December 31, 2016.

 

TherapeuticsMD will host a conference call and live audio webcast to provide a TX-004HR regulatory update on Monday, May 8th at 8:00 a.m. ET. TherapeuticsMD Chief Executive Officer Robert G. Finizio and Chief Financial Officer Dan Cartwright will host the call.

 

iCAD reported financial results for the three-months ended March 31, 2017.  Total revenue for the first quarter of 2017 increased 12.5% to $6.8 million from $6.0 million in the first quarter of 2016.  Net loss for the first quarter of 2017 was $(0.5) million, or $(0.03) per share, compared with net loss of $(2.5) million, or $(0.16) per share, for the first quarter of 2016.  The GAAP Net Loss in Q1 2017 includes a gain on sale of the Company’s MRI assets of $2.5 million, which was considered a non-core asset.  The sale was completed in January 2017 for $3.2 million.  As of March 31, 2017, the Company had cash and cash equivalents of $9.5 million, compared with $8.6 million as of December 31, 2016.  This cash position primarily reflects an increase in cash from the sale of the MRI assets, which was partially offset by the use of cash from operations during the first quarter of 2017.

 

Genkyotex announced that the U.S. Food & Drug Administration has accepted its Investigational New Drug Application, which allows Genkyotex to proceed with a phase 2 clinical trial of GKT831, its NOX1 and NOX4 inhibitor, in patients with primary biliary cholangitis (PBC). Genkyotex expects to initiate this study prior to the end of the second quarter 2017, with interim top-line results anticipated in the first half of 2018, and full results anticipated in the second half of 2018.

 

VBL Therapeutics will host a conference call and live audio webcast on Monday, May 15, 2017 at 8:30am Eastern Time to report first quarter ended March 31, 2017 financial results.

 

Eiger BioPharmaceuticals announced that the U.S. IND has been filed for Pegylated Interferon Lambda in the treatment of hepatitis delta virus (HDV) infection.  U.S. sites are planned for the ongoing Phase 2 LIMT HDV (Lambda Interferon MonoTherapy in HDV) study, a monotherapy trial of pegylated interferon lambda 1a ("Lambda") as a potential treatment for chronic hepatitis D virus (HDV) infection.

 

Cellect Biotechnology announced that the U.S. Food & Drug Administration provided Cellect with the pre-Investigational New Drug meeting minutes supporting an IND submission in the U.S. for Cellect’s flagship product, ApoGraft™.

 

MediWound announced the successful completion of a Good Manufacturing Practice (GMP) audit of the Company’s facility in Yavne, Israel by the Israeli Ministry of Health (IMOH). The audit was performed as part of the IMOH’s routine evaluation of the Company’s manufacturing facility for its proteolytic enzyme therapeutics.

 

Prothena Corporation will announce financial results for the first quarter of 2017 on May 9, 2017 after the close of the U.S. financial markets.

 

Ignyta announced that it has commenced an underwritten public offering of 10,000,000 shares of its common stock. In connection with this offering, Ignyta expects to grant the underwriters a 30-day option to purchase up to an additional 1,500,000 shares of its common stock at the public offering price, less the underwriting discounts and commissions. The offering is subject to market and other conditions, and there can be no assurances as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

 

After yesterday’s close, Gilead reported 1Q17 non-GAAP EPS of $2.23, which compares to $3.03 for the same period a year ago. The company missed the non-GAAP EPS mean estimate of $2.28. Total revenue for 1Q17 was $6.51 billion, which compares to $7.79 billion for the same period a year ago. This compares to a mean estimate of $6.63 billion. Following the news, Goldman analyst Terence Flynn increased his price target to $70 from $68; Bank of America analyst Ying Huang decreased his price target to $74 from $76; BMO analyst Ian Somaiya increased his price target to $76 from $75; JP Morgan analyst Cory Kasimov decreased his price target to $80 from $82; Piper JaffrayJoshua Schimmer decreased his price target to $89 from $95.

 

Reuters reported that Novo Nordisk beat operating profit forecasts for the first quarter and nudged up its full-year target. The company narrowed its 2017 sales forecast to 0 to 3 percent growth from a previously range of -1 to 4 percent, but lifted its operating profit view to a range of -1 to 3 percent from -2 to 3 percent, both in local currencies. Novo’s first-quarter operating profit rose 10 percent on the year to 13.5 billion Danish crowns ($1.9 billion) beating an average forecast of 12.0 billion crowns in a Reuters poll of analysts.

 

After yesterday’s close, Spectrum Pharmaceuticals reported 1Q revenues were $29.1 million, including $25.8 million in product sales. Spectrum recorded non-GAAP net loss of $11.4 million, or $0.14 per basic and diluted share in the three-month period ended March 31, 2017, compared to non-GAAP net income of $0.3 million, or $0.01 per basic share and less than $0.01 per diluted share in the comparable period in 2016. Non-GAAP research and development expenses were $14.3 million, as compared to $13.0 million in the same period of 2016.

 

Quintiles reported 1Q17 non-GAAP EPS of $1.01, which compares to $0.89 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $0.96. Total revenue for 1Q17 was $1.91 billion, which compares to $1.11 billion for the same period a year ago. This compares to a mean estimate of $1.91 billion.

 

Shire reported 1Q17 non-GAAP EPS of $3.63, which compares to $3.19 for the same period a year ago. The company beat the non-GAAP EPS mean estimate of $3.27. Total revenue for 1Q17 was $3.57 billion, which compares to $1.71 billion for the same period a year ago. This compares to a mean estimate of $3.56 billion.

 

Grifols reported 1Q17 non-GAAP EPS of $0.24, which compares to $0.20 for the same period a year ago. The company matched the non-GAAP EPS mean estimate of $0.24. Total revenue for 1Q17 was $1.06 billion, which compares to $958.9 million for the same period a year ago. This compares to a mean estimate of $1.05 billion.

 

Pieris Pharmaceuticals announced a strategic collaboration in respiratory diseases withAstraZeneca to develop novel inhaled drugs that leverage Pieris’ Anticalin platform, including its lead preclinical drug candidate, PRS-060.

 

Soligenix announced that it has received FDA clearance to advance a pivotal Phase III clinical trial evaluating SGX942 (dusquetide) for the treatment of oral mucositis in head and neck cancer (HNC) patients being treated with chemoradiation (CRT). Soligenix plans to begin this study in the second quarter of 2017.

 

Pluristem Therapeutics announced the promising results of its non-human primates (NHP) pilot study for PLX-R18 as a treatment for Acute Radiation Syndrome (ARS). The study, conducted and funded by the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), was designed to assess the safety and efficacy of PLX-R18 following intramuscular injection into irradiated and non-irradiated NHPs. Efficacy measures included survival as well as level of bone marrow function, which is affected by exposure to high levels of radiation as may occur in a nuclear accident or attack.

 

BioLineRx announced that it has met with the FDA and has gained clarity on the development program and the design of a Phase III pivotal study for BL-8040, its robust platform for multiple oncology indications, as a novel stem cell mobilization treatment for autologous bone-marrow transplantation. Following its successful meeting with the FDA, the Company anticipates the initiation of a registrational Phase 3 trial during the second half of 2017. The study will investigate BL-8040 in combination with granulocyte colony-stimulating factor (G-CSF) for mobilization of stem cells from the bone marrow to the peripheral blood, followed by collection and subsequent autologous transplantation in patients with multiple myeloma.

 

Pfizer announced that the FDA has accepted for review the sNDA for XELJANZ (tofacitinib citrate) 5 mg twice daily (BID) for the treatment of adult patients with active psoriatic arthritis (PsA). A separate sNDA was also accepted for XELJANZ XR (tofacitinib citrate) extended release 11 mg once daily use in PsA. The sNDA submission is based on data from the Phase III Oral Psoriatic Arthritis TriaLs (OPAL) clinical development program, which consisted of two pivotal trials and a long-term extension study, evaluating the safety and efficacy of XELJANZ in patients with active PsA who had failed prior PsA treatments. The FDA has provided an anticipated PDUFA action date in December 2017 for the sNDAs.

 

GTx announced the publication in the journal Human Molecular Genetics of results from preclinical studies supporting the potential efficacy of the Company’s SARMs, and in particular GTx-026, for Duchenne Muscular Dystrophy (DMD) treatment. DMD is a rare genetic disorder characterized by progressive muscle degeneration and weakness, affecting approximately 18,000 boys in the United States.

 

Servier and Miragen Therapeutics announced that they have extended their research collaboration through September 2019. MicroRNA-92 has been added to the existing collaboration as a new therapeutic target, with the objective to start testing MRG-110 in humans within a year.

 

Amgen announced from the World Medical Innovation Forum focused on cardiovascular disease that Harvard Pilgrim has signed an outcomes-based refund contract with Amgen for Repatha (evolocumab). This first-of-its-kind contract is based on the Repatha cardiovascular outcomes data that were recently presented at the American College of Cardiology 66(th) Annual Scientific Session. The contract provides Harvard Pilgrim with a rebate for the cost of Repatha for an eligible patient who has a heart attack or stroke while on Repatha.

 

Proteon Therapeutics announced that it will increase the planned enrollment of its ongoing Phase III PATENCY-2 trial to 600 patients. The increased sample size follows a review of the statistical plan, which revealed a calculation error that overstated the trial’s power for secondary patency, one of the co-primary endpoints. The increased sample size provides 88% power to detect the differences observed in the PATENCY-1 trial with a p-value ≤0.05 for secondary patency, and 98% power with a p-value ≤0.05 for fistula use for hemodialysis, the other co-primary endpoint.

 

Perrigo announced that search warrants were executed at the Company’s corporate offices associated with an ongoing investigation by the U.S. Department of Justice Antitrust Division related to drug pricing in the pharmaceutical industry. As has been previously disclosed by a number of companies, the Antitrust Division has been looking at industry-wide pricing practices. The Company is taking this investigation seriously and is cooperating with the appropriate authorities.

 

GenSight Biologics S.A. announced it has appointed Mohamed Genead, M.D., as Chief Medical Officer, effective May 1, 2017. Dr. Genead brings more than 15 years of experience to the role, including his most recent role as Vice President & Global Therapeutic Area Head for Ophthalmology/Retina Gene Therapy at Biogen.

 

Acceleron Pharma announced that Steven Ertel, due to medical reasons, will transition from his role as Executive Vice President and Chief Operating Officer to become a special advisor to the Chief Executive Officer, effective immediately. Mr. Ertel was recently diagnosed with amyotrophic lateral sclerosis (ALS).

 

Luminex announced that it has received FDA clearance for the ARIES Bordetella Assay for direct detection and identification of Bordetella pertussis (B. pertussis) and Bordetella parapertussis (B. parapertussis) nucleic acid in nasopharyngeal swab specimens obtained from individuals suspected of having a respiratory tract infection attributable to B. pertussis or B. parapertussis. This is the fourth assay the FDA has cleared since October 2015 for use on Luminex’s ARIES Systems. The company has also achieved CE-IVD marking for the ARIES Bordetella Assay, is preparing to submit its Clostridium difficile assay to the FDA later this month, and is in the process of completing a Group A Streptococcus clinical trial as it seeks to further expand its ARIES menu.

 

Therapix Biosciences announced that it has appointed Josh Blacher as Chief Financial Officer, effective immediately.

 

Neurocrine Biosciences announced that it has completed its previously announced private offering of $517.5 million aggregate principal amount of its 2.25% convertible senior notes due 2024, which includes $67.5 million aggregate principal amount of notes that were sold pursuant to the exercise of the initial purchasers’ option to purchase additional notes. The notes were sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The net proceeds from the offering, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses payable by Neurocrine, were approximately $502.2 million. JefferiesBarclays CapitalJ.P. Morgan Securities and Leerink Partners acted as joint book-running managers for the offering, and Robert W. Baird & Co. and H.C. Wainwright & Co. acted as co-managers for the offering. Evercore Group acted as Neurocrine’s financial advisor for the offering.

 

 

ANALYST RECOMMENDATIONS

 

RBC Aanalyst Douglas Miehm increased his price target on Abivax to €26 from €13, citing the positive Phase IIa data for lead HIV candidate.  RBC anticipates Abivax will continue to progress ABX464 through clinical trials, potentially licensing the drug to a larger pharma company with a presence in HIV in 2018 (GILD, Merck, J&J, and ViiV).

Rating remains outperform.

 

Cantor analyst Mara Goldstein decreased her price target of Ignyta to $15 from $18, citing additional dilution associated with the announced equity offering after the close of the market.

 

Wells Fargo analyst Tim Evans downgraded the following companies, citing investors should become more selective in the CRO space, focusing on those companies most likely to be share takers (PRAH, ICLR, Q): INC Research to “market perform” from “outperform” and decreased his valuation range to $44-$46 from $49-$51; downgraded Medpace Holdings to “market perform” from “outperform” and decreased his valuation range to $23-$25 from $32-$33.

 

JP Morgan analyst Anupam Rama upgraded Array Biopharma to “overweight” from “neutral” and increased his price target to $10 from $9, citing the recent weakness in shares creates a compelling entry ahead of upcoming events.

 

Wells Fargo analyst David Maris initiated coverage of Ironwood Pharmaceuticals with an “outperform” rating and a $21-$22 valuation range, citing shares are attractive at current levels and offer investors a solid base business with Linzess.

 

Following Lantheus’ earnings, Credit Suisse analyst Erin Wilson increased her price target to $14 from $12; Jefferies analyst Rajbir Denhoy increased his price target to $18 from $15.

 

BMO analyst Alex Arfaei downgraded Bristol Myers Squibb to “underperform” from “market perform,” citing increased uncertainty about Bristol’s IO franchise and thus lower the probability of a takeout, leading to multiple contraction in BMY.

 

Abivax target increased to at RBC Capital (€21.57 +€1.87)