BioShares Biotechnology Clinical Trials (BBC): $18.23, +$0.00, -37.2% YTD

BioShares Biotechnology Products (BBP): $29.08, -$0.26, -5.6% YTD

 

 

MARKET COMMENTARY

 

U.S. stock index futures edged lower as investors were rattled by signs the U.S. presidential race was tightening just days before the vote. Markets will also watch for the Federal Reserve statement after the central bank concludes its two-day policy meeting, where the bank is widely expected to leave rates on hold. Shares of Facebook, Qualcomm and Twenty-First Century Fox will be in focus as they report quarterly earnings later in the day. ADP National employment report is on the economic calendar. European bourses slid and Asian stocks hit a seven-week low. Oil extended losses on a surprise U.S. stocks build, while gold rose on safe-haven bid.

 

 

MARKET HIGHLIGHTS

 

Prothena Corporation reported financial results for the third quarter and first nine months of 2016.  Prothena reported a net loss of $43.2 million and $111.2 million for the third quarter and first nine months of 2016, respectively, as compared to a net loss of $23.0 million and $56.5 million for the third quarter and first nine months of 2015, respectively. Net loss per share for the third quarter and first nine months of 2016 was $1.26 and $3.25, respectively, as compared to a net loss per share of $0.73 and $1.89 for the third quarter and first nine months of 2015, respectively.  As of September 30, 2016, Prothena had $412.6 million in cash, cash equivalents and restricted cash and no debt.

 

Palatin Technologies announced positive, statistically significant top-line results from the Reconnect studies, its Phase 3 clinical trial program of lead drug candidate bremelanotide. The Reconnect studies, investigating bremelanotide as an on-demand treatment for premenopausal women diagnosed with hypoactive sexual desire disorder ("HSDD"), met the pre-specified co-primary efficacy endpoints in both Phase 3 clinical trials.

 

Paratek Pharmaceuticals reported financial results for the quarter ended September 30, 2016.  For the quarter ended September 30, 2016, Paratek reported a net loss of $23.6 million, or $1.04 per share, compared to a net loss of $23.4 million, or $1.33 per share, for the same period in 2015.  As of September 30, 2016, Paratek had cash, cash equivalents, and marketable securities of $120.8 million.

 

Kamada announced the clinical plan for the initiation of a Phase 2/3 clinical trial in the United States of its Alpha-1 Antitrypsin (G1-AAT IV) for the treatment of acute Graft-Versus-Host Disease (GvHD), in collaboration with Shire plc.  This Phase 2/3 clinical trial will be a two-part, multi-center, prospective study to evaluate the safety and efficacy of G1-AAT IV as an add-on biopharmacotherapy to conventional steroid treatment in up to 168 patients with acute GvHD with lower gastrointestinal involvement (LGI-aGvHD). The first part of the trial will be single-arm, open-label and will include 20 patients, while the second will be placebo-controlled, double-blind with approximately 148 patients in two arms. The primary endpoint of the study will be overall response (complete response (CR) and partial response (PR)) rate at Day 28. GvHD CR is complete resolution of all signs and symptoms of acute GvHD in all organs without intervening salvage. GvHD PR is improvement of one stage in one or more organs involved in GvHD without progression in other organs. Study results are expected to be available in 2020.

 

Gemphire Therapeutics announced its financial results for the third quarter and nine months ended September 30, 2016.  Net loss attributable to common stockholders in the three and nine months ended September 30, 2016 was $3.9 million, or $0.56 per share and $7.7 million, or $1.65 per share, respectively. This compares to losses of $2.7 million, or $0.87 per share and $9.3 million, or $3.39 per share, in the comparable periods of 2015.  Cash and cash equivalents at September 30, 2016 totaled $28.4 million compared to $3.6 million at December 31, 2015.

 

Ocera Therapeutics reported financial results for the quarter ended September 30, 2016. Net loss for the three and nine months ended September 30, 2016 was $7.1 million and $21.7 million, respectively. Net loss for the three and nine months ended September 30, 2015 was $6.6 million and $19.4 million, respectively. Basic and diluted net loss per share for the three and nine months ended September 30, 2016 was $0.32 and $1.01, respectively. Basic and diluted net loss per share for the three and nine months ended September 30, 2015 was $0.33 and $0.98, respectively. As of September 30, 2016, Ocera had cash, cash equivalents and investments of $32.5 million.

 

TRACON Pharmaceuticals will report its third quarter 2016 financial and operating results after the close of U.S. financial markets on Tuesday, November 8, 2016.

 

Ignyta Chairman & CEO Jonathan Lim, M.D., will make a presentation at the Credit Suisse 25th Annual Healthcare Conference on Tuesday, November 8, 2016, at 9:30 a.m. Pacific time.

 

VBL Therapeutics will host a conference call and live audio webcast on Thursday, November 10, 2016 at 8:30 a.m. Eastern Time to report third quarter 2016 financial results.

 

CymaBay Therapeutics will host a conference call and live audio webcast on Wednesday, November 9th at 4:30 p.m. Eastern Time to provide a corporate update and discuss the Company’s financial results for the third quarter ended September 30, 2016.

 

After yesterday’s close, Gilead reported 3Q16 non-GAAP EPS of $2.75, which compares to $3.22 for the same period a year ago. The company missed the First Call non-GAAP EPS mean estimate of $2.86. Total revenue for 3Q16 was $7.5 billion, which compares to $8.30 billion for the same period a year ago. This compares to a mean estimate of $7.45 billion. Following the news, BMO analyst Ian Somaiya decreased his price target to $84 from $98; Goldman analyst Terence Flynn increased his price target to $81 from $80; Leerink analyst Geoffrey Porges decreased his price target to $89 from $94; Wells Fargo analyst Jim Birchenough decreased his valuation range to $77-$82 from $80-$86; Jefferies analyst Brian Abrahams decreased his price target to $91 from $95; Morgan Stanley analyst Matthew Harrison decreased the price target to $95 from $97; Credit Suisse analyst Alethia Young decreased the price target to $90 from $95; JPM analyst Cory Kasimov decreased his price target to $101 from $115; Barclays analyst Geoff Meacham decreased his price target to $!05 from $115; Cowen analyst Phil Nadeau decreased his price target to $100 from $120; Piper Jaffray analyst Josh Schimmer decreased his price target to $102 from $108.

 

Alkermes reported 3Q16 non-GAAP EPS loss of $0.09, which compares to a loss of $0.19 for the same period a year ago. The company missed the First Call non-GAAP EPS mean estimate loss of $0.06. Total revenue for 3Q16 was $180.2 million, which compares to $152.7 million for the same period a year ago. This compares to a mean estimate of $186.4 million.

 

Charles River Labs reported 3Q16 non-GAAP EPS of $1.18, which compares to $1.03 for the same period a year ago. The company beat the First Call non-GAAP EPS mean estimate of $1.13. Total revenue for 3Q16 was $425.7 million, which compares to $349.5 million for the same period a year ago. This compares to a mean estimate of $434.4 million.

 

After yesterday’s close, Illumina reported 3Q16 non-GAAP EPS of $0.97, which compares to $0.80 for the same period a year ago. The company beat the First Call non-GAAP EPS mean estimate of $0.87. Total revenue for 3Q16 was $607.1 million, which compares to $550.3 million for the same period a year ago. This compares to a mean estimate of $614.3 million. Following earnings, First Analysis analyst Joseph Munda downgraded the stock to “underweight” from “equal-weight” and decreased his price target to $116 from $130; JP Morgan analyst Tycho Peterson decreased his price target to $175 from $200; Evercore analyst Ross Muken increased his price target to $143 from $136.

 

Pacira Pharmaceuticals reported 3Q16 non-GAAP EPS $0.20, which compares to $0.32 for the same period a year ago. The company beat the First Call non-GAAP EPS mean estimate loss of $0.02. Total revenue for 3Q16 was $68.4 million, which compares to $62.2 million for the same period a year ago. This compares to a mean estimate of $67.2 million.

 

Flex Pharma reported 3Q16 GAAP EPS loss of $0.65, which compares to a loss of $0.53 for the same period a year ago. The company beat the First Call GAAP EPS mean estimate loss of $0.67. Total revenue for 3Q16 was $599,000, which compares to no revenue for the same period a year ago. This compares to a mean estimate of $100,000.

 

AveXis announced that the planned pivotal study of AVXS-101 in spinal muscular atrophy (SMA) Type I will reflect a single-arm design, using natural history of the disease as a comparator, and enroll approximately 20 patients. This update is based on the receipt of the minutes following the Type B meeting with the FDA held on September 30, 2016. Following the news, Jefferies analyst Biren Amin increased his price target to $71 from $58; BMO analyst Ian Somaiya increased his price target to $80 from $52; Wells Fargo analyst Jim Birchenough increased his valuation range to $81-$86 from $56-$61; Chardan analyst Gbola Amusa increased his price target to $85 from $65.

 

Teva Pharmaceutical Industries and Eagle Pharmaceuticals announced that the CMS has established a unique, product-specific billing code, or J-code (J9034), for BENDEKA (bendamustine hydrochloride) Injection. The J-code will become effective on January 1, 2017.

 

TESARO announced that it has completed the niraparib rolling NDA submission to the FDA for the maintenance treatment of patients with platinum-sensitive, recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in response to platinum-based chemotherapy. The niraparib NDA is supported by data from the ENGOT-OV16/NOVA trial, a double-blind, placebo-controlled, international Phase 3 study that enrolled 553 patients with recurrent ovarian cancer who were in response to their most recent platinum-based chemotherapy.

 

Cancer Genetics announced the successful CLIA validation and approval of its next generation sequencing (NGS) assay that enables an era of precision medicine for renal cancers, Focus::Renal. Focus::Renal, a highly-sensitive NGS panel, detects mutations of 76 renal cancer-related genes, as well as genome-wide copy number changes, and critical single nucleotide polymorphisms (SNPs), all in a single test, that enable precision diagnosis, prognosis, and therapy selection for renal cancer patients.

 

Zynerba Pharmaceuticals announced the enrollment of the first patients into the STAR 2 (Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) clinical trial, an open-label extension trial which allows patients who have completed the STAR 1 clinical trial to receive treatment with ZYN002 CBD gel for up to 52 weeks.

 

Concordia International announced that its Board of Directors has appointed Allan Oberman as its new Chief Executive Officer and selected Jordan Kupinsky as Chairman of the Board of Directors. The new appointments are effective November 14, 2016.

 

Advanced Accelerator Applications S.A. announced that the company has been granted marketing authorization in Switzerland for two Positron Emission Tomography (PET) products, DOPAVIEW and AAACholine.

 

Sernova and CTI Clinical Trial and Consulting Services announced their collaboration on regulatory matters respecting Sernova’s Cell Pouch System, a novel implantable and scalable medical device that when combined with therapeutic cells, may provide a convenient, safe and effective long-term therapeutic option for patients with chronic diseases such as insulin-dependent diabetes who seek to improve their quality of life.

 

Allergan announced that it has completed its initial $5 billion in share repurchases under its previously announced share repurchase program, and its Board of Directors has approved the expansion of the share repurchase program and the initiation of a regular quarterly cash dividend for shareholders as part of the Company’s capital allocation strategy. This reflects the Company’s conviction in its business strategy and strong future cash flow position, allowing for periodic return of cash to shareholders through dividends and a significant share buyback program while maintaining investment grade ratings and continuing investment in stepping stone and accretive acquisitions.

 

Bristol-Myers Squibb announced new data evaluating the combination of Opdivo (nivolumab) plus Yervoy (ipilimumab) and Opdivo plus new investigational Immuno-Oncology assets, including lirilumab, will be presented at the 2016 Society for Immunotherapy of Cancer (SITC) 31st Annual Meeting from November 9 – 11 in National Harbor, Maryland. These presentations underscore Bristol-Myers Squibb’s dedication to investigating complementary Immuno-Oncology compounds that target different immune system pathways, including the ongoing study of Opdivo and Yervoy, with the goal of discovering transformational combinations that may offer the most significant improvements in overall survival and address areas of high unmet patient need.

 

Pfizer China announced that it has received approval from the CFDA to market its pneumococcal 13-valent conjugate vaccine, Prevenar 13, in China for active immunization for the prevention of invasive diseases (including bacteremic pneumonia, meningitis, septicemia, and bacteremia) caused by Streptococcus pneumoniae (S. Pneumoniae) serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F, and 23F in infants and children aged 6 weeks to 15 months. S. pneumoniae is the most common cause of invasive disease as well as pneumonia and upper respiratory tract infections.

 

Verastem and Infinity Pharmaceuticals announced that the companies entered into a license agreement under which Verastem licensed exclusive worldwide rights to develop and commercialize Infinity’s oncology product candidate duvelisib. Duvelisib is an oral inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma being investigated for the treatment of hematologic cancers, including chronic lymphocytic leukemia (CLL), indolent non-Hodgkin lymphoma (iNHL) and T cell lymphomas. Verastem will pay to Infinity up to $28 million in milestones, with positive data from DUO, a Phase III, randomized monotherapy study of duvelisib in patients with relapsed/refractory CLL, triggering the first milestone payment, and royalties on net sales.

 

Celldex Therapeutics entered into a definitive agreement to acquire Kolltan Pharmaceuticals, a privately held clinical-stage company focused on the discovery and development of novel, antibody-based drugs targeting receptor tyrosine kinases (RTKs). Focused primarily in oncology and backed by prominent thought leaders in RTK biology, Kolltan has reported clinical and preclinical data that its drug candidates can help overcome tumor resistance mechanisms associated with current tyrosine kinase inhibitors and seen in patients who have failed other cancer therapies. Celldex believes Kolltan’s clinical candidates and preclinical platform are highly compatible with the Company’s scientific approach and can be developed independently and in combination with Celldex’s existing product candidates.

 

Omeros announced positive results from a Phase II clinical trial evaluating the effects of a peroxisome proliferator-activated receptor (PPAR)-gamma agonist in heroin-dependent subjects. The trial was designed and conducted by Dr. Sandra Comer and her colleagues at the Division on Substance Abuse, New York State Psychiatric Institute and Department of Psychiatry, Columbia University. The clinical trial demonstrated that the compound statistically significantly reduced drug craving and measures of anxiety in heroin users maintained on sublingual buprenorphine/naloxone. Omeros’ issued and pending patents in its OMS405 program cover the use of any PPAR-gamma agonist, alone or in combination with other addiction therapies, to treat all forms of addiction, including opioids, cocaine, nicotine, alcohol and other substances of abuse as well as addictive or compulsive behaviors.

 

Trillium Therapeutics advanced its novel investigational drug TTI-621, a SIRPa-IgG1 Fc fusion protein, from dose escalation into Phase Ib cohort expansion enrollment in patients with advanced hematologic malignancies. As part of the advancement, the company provides the following study updates:  Trillium has completed a dose-escalation phase of TTI-621 in patients with lymphoma, and will report interim Phase Ia data at the American Society of Hematology (ASH) Annual Meeting in December. Patient enrollment across a broad spectrum of hematologic malignancies has commenced in the Phase Ib multi-cohort expansion portion of the trial. The trial’s objectives are to further characterize the safety of TTI-621 and gain preliminary evidence of anti-tumor activity in patients with a variety of hematologic malignancies. In addition to the eight original expansion cohorts, indolent B cell lymphoma, aggressive B cell lymphoma, T cell lymphoma, Hodgkin lymphoma, chronic lymphocytic leukemia, multiple myeloma, acute myeloid leukemia and myelodysplastic syndrome, the Phase Ib expansion will also include patients with myeloproliferative neoplasms. In a separate expansion cohort, patients with CD20-positive lymphomas will be treated with TTI-621 in combination with rituximab. The Phase Ib enrollment will engage multiple new clinical trial sites, in addition to the existing five participating in Phase Ia.

 

Oasmia Pharmaceutical AB announced that Nexttobe AB has extended its loan to the company and also significantly improved the interest terms.

 

Cidara Therapeutics and Square 1 Bank, a division of Pacific Western Bank, announced they have entered into an agreement for a $20 million credit facility. Proceeds from the facility will provide working capital to support Cidara’s CD101 and CD201 programs which are in development to treat serious fungal and multi-drug resistant bacterial infections.

 

Otonomy announced that the CMS established a unique J code for OTIPRIO (ciprofloxacin otic suspension). The code, J7342, will become effective January 1, 2017. This new code will replace the existing C code (C9479) while retaining transitional pass-through payment status.

 

Momenta Pharmaceuticals announced the appointment of Scott M. Storer as Senior Vice President and CFO. Mr. Storer is expected to begin at Momenta on November 28, 2016 and will replace Momenta’s current CFO, Rick Shea, who will be retiring.

 

Bio-Path Holdings announced the enrollment and dosing of the first patient in the efficacy portion of its Phase II clinical study of BP1001, a liposomal Grb2 antisense for the treatment of acute myeloid leukemia (AML). The objective of the Phase II study is to further assess the efficacy and safety of BP1001, Bio-Path’s lead development candidate.

 

MyoKardia announced dosing of the first patient in its Phase II PIONEER-HCM study of MYK-461. PIONEER-HCM is assessing safety, tolerability and efficacy of MYK-461 in patients with symptomatic, obstructive hypertrophic cardiomyopathy (oHCM). The FDA has granted the company Orphan Drug Designation for MYK-461 for the treatment of symptomatic oHCM.

 

Momenta Pharmaceuticals and Mylan N.V. announced that dosing has begun in a Phase I study to compare the pharmacokinetics, safety and immunogenicity of M834, a proposed biosimilar of ORENCIA (abatacept), to US- and EU-sourced ORENCIA in normal healthy volunteers. Under the Momenta-Mylan collaboration agreement, Momenta has achieved the milestone necessary to earn a $25 million payment from Mylan.

 

Abeona Therapeutics announced that positive clinical trial results from the EB-101 Phase I gene therapy clinical trial were published as "Safety and wound outcomes following genetically corrected autologous epidermal grafts in patients with recessive dystrophic epidermolysis bullosa" in the Journal of the American Medical Association (JAMA). Abeona recently announced commencing enrollment in the Phase II portion of the clinical study (NCT01263379).

 

Baxter International announced the start of a Phase III clinical trial evaluating an investigational drug that combines a citrate anticoagulant and renal replacement solution to determine if and to what extent it lengthens the extracorporeal circuit life in acute kidney injury patients treated with continuous renal replacement therapy (CRRT). Currently, there is no citrate anticoagulant approved for use in CRRT in the United States.

 

RedHill Biopharma announced that it intends to offer its ADSs, each representing ten of its ordinary shares, in an underwritten public offering. RedHill also expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the ADSs offered to the public. The Company intends to use the proceeds from the offering to fund clinical development programs, for potential acquisitions, to support commercial operations and for general corporate purposes. Roth Capital Partners and FBR are acting as joint book-running managers and Echelon Wealth Partners is acting as Canadian manager for the offering with respect to sales in Canada.

 

Veracyte announced the pricing of an underwritten public offering of 5,000,000 shares of its common stock at a public offering price of $6.00 per share. The gross proceeds to Veracyte from this offering, before deducting underwriting discounts and commissions and offering expenses payable by Veracyte, are expected to be $30 million. All of the shares are being offered by Veracyte. The offering is scheduled to close on or about November 7, 2016, subject to customary closing conditions. In addition, Veracyte has granted to the underwriters participating in the offering a 30-day option to purchase up to an additional 750,000 shares of its common stock at the public offering price, less underwriting discounts and commissions. Veracyte intends to use the net proceeds from the offering for working capital and other general corporate purposes. Veracyte may also use a portion of the net proceeds from the offering to acquire or invest in complementary businesses, technologies or other assets, although it has no present commitments or agreements to do so. Leerink Partners is acting as the sole book-running manager for the offering and BTIG is acting as lead manager.

 

ZIVO Bioscience announced that from July 1, 2016 to date, the Company has received $2 million in new capital funding as part of its Q3/Q4 capital funding initiative. This brings the total of new funding to $3.25 million year to date. In related news, the ZIVO Board of Directors recently approved an increase in the available credit line from HEP Investments, LLC to $17.5 million. To accommodate this enhanced level of funding, a proxy measure has been placed before the shareholders to increase the authorized share base by 150 million shares to 450 million authorized shares. Results are expected to be announced at the annual shareholder meeting on November 9 in Detroit, Michigan.

 

 

ANALYST RECOMMENDATIONS

 

Aegis analyst Difei Yang initiated coverage of Achaogen with a “buy” rating and $10 price target, citing a pipeline of products in development for anti-bacterial treatment.

 

Roth analyst Joseph Pantginis increased his price target of Palatin Technologies to $7 from $4, citing BMT scores in hitting both co-primary endpoints in both Phase III studies for BMT.  

 

Following Endologix earnings, Canaccord analyst Jason Mills decreased his price target to $13.50 from $15; Guggenheim analyst Chris Pasquale decreased his price target to $13 from $15; BMO analyst Joanne Wuensch decreased her price target to $14 from $15; Leerink analyst Ravi Misra decreased his price target to $11 from $13; RBC analyst Glenn Novarro decreased his price target to $11 from $12.

 

Following Pfizer’s earnings, BMO analyst Alex Arfaei downgraded the stock to “market perform” from “outperform’ and decreased his price target to $33 from $40; Leerink analyst Seamus Fernandez decreased his price target to $36 from $37; Goldman analyst Jami Rubin decreased her price target to $36 from $37; JP Morgan analyst Chris Schott decreased his price target to $39 from $40; Piper Jaffray analyst Richard Purkiss decreased his price target to $53 from $54.

 

Piper Jaffray analyst David Amsellem raised his price target of AcelRx to $4 from $3, citing to model adjustment.

 

Jefferies analyst David Steinberg reinstated coverage of Horizon with a “buy” rating and decreased his price target to $26 from $27, citing transaction makes sense as it leverages HZNP’s existing commercial infrastructure and adds two durable orphan assets to the co’s increasingly diversified portfolio.

 

Cowen analyst Eric Schmidt downgraded Regulus Therapeutics to “market perform” from “outperform,” citing suspended dosing in order to conduct a multiple ascending dose trial in healthy volunteers at the behest of EU regulators.