Amgen Inc. (NASDAQ:AMGN) reported 2Q14 financial results Tuesday that beat the Street but the bellwether also unveiled plans to reduce headcount by about 12-15%, or 2,400-2,900, companywide through 2015. Amgen plans to close its facilities in Washington state and Colorado, which are primarily R&D and process development related sites. On its earnings conference call, Amgen said it expects the restructuring to improve cost structure and reduce layers of management, and increase managerial spans of responsibility. Amgen said it will take a pre-tax GAAP charge of $775-$950 million in 2014-15 but reduce operating expenses by about $700 million in 2016 compared with 2013. The company said it plans to reinvest the savings in worldwide launches of new products, including biosimilars.
Amgen reported 2Q14 adjusted EPS of 2.37, up 25% from $1.89 and above the Street's $2.07 estimate. Revenues for 2Q14 grew 11% to $5.2 billion and topped the Street's $4.9 billion estimate. SG&A was down 12% in the quarter to $1.1 billion. The company raised its 2014 revenue guidance to $19.5-$19.7 billion from $19.2-$19.6 billion and its adjusted EPS guidance to $8.20-$8.40 from $7.90-$8.20. Savings from the restructuring are included in the 2014 guidance.
On the pipeline front, Amgen said it submitted a BLA to FDA for Talimogene laherparepvec to treat regionally and distantly metastatic melanoma. This quarter, the company plans to submit an MAA to EMA for the modified herpes simplex virus type 1 (HSV-1) encoding GM-CSF.
Amgen, which made the announcement after market close, was up $0.66 to $123.31 on Tuesday. In early after-hours trading, the stock jumped $4.49 to $127.80.
Pfizer Inc. (NYSE:PFE) disclosed details of its pipeline of five biosimilars during a conference call with analysts to discuss 2Q14 financial results. This half, the pharma expects to start Phase III testing of biosimilars of autoimmune drugs Remicade infliximab and Rituxan rituximab, while a biosimilar of cancer drug Avastin bevacizumab is expected to start Phase I testing. Data from a Phase I trial of a biosimilar of autoimmune drug Humira adalimumab are expected in mid-2014 and a biosimilar of breast cancer drug Herceptin trastuzumab is in Phase III testing. Pfizer expects all of the biosimilars to reach the market in 2017-18.
Although unsuccessful in a bid to acquire AstraZeneca plc (LSE;AZN; NYSE:AZN) during the quarter, Pfizer CEO Ian Read also confirmed on the call that the pharma is continuing to look at a wide spectrum of M&A transactions, adding that tax inversion is "one part of the value equation."
Pfizer reported 2Q14 adjusted diluted EPS of $0.58, up 4% from $0.56 in the prior year's quarter and above the Street's $0.57 estimate. Pfizer's 2Q14 revenues dipped 2% to $12.8 billion from $13 billion in 2Q13, but came in above the Street's $12.5 billion estimate. Pfizer repurchased $2.9 billion in stock from the start of the year through July 28 and expects to repurchase a total of about $5 billion in stock in 2014. The pharma lowered its 2014 revenue guidance to $48.7-$50.7 billion from $49.2-$51.2 billion but maintained its full-year adjusted diluted EPS guidance of $2.20-$2.30.
Proteus Digital Health Inc. (Redwood City, Calif.) raised $52 million from undisclosed institutional investors in the second close of a series G round, bringing the total raised in the round to $172 million. The company raised $120 million in a first close last month. Proteus' Digital Health Feedback System comprises wearable and ingestible sensors that record a patient's activity, rest patterns and when medication is taken. The system has clearance in the EU and U.S. (see BioCentury, June 9).
Seattle-based biotech incubator Accelerator Corp. secured $51.1 million for Accelerator IV and expanded its operations to New York City. Earlier this year, Accelerator said it planned to set up shop in New York and was targeting $50-$70 million for its fourth fund (see BioCentury, Feb. 3).
Investors in Accelerator IV include new strategic investors Eli Lilly and Co. (NYSE:LLY); VC firm Harris & Harris Group Inc. (NASDAQ:TINY); Johnson & Johnson Development Corp., the venture arm of Johnson & Johnson (NYSE:JNJ); the Partnership Fund for New York City; and Pfizer Venture Investments. Existing Accelerator investors Alexandria Venture Investments; Arch Venture Partners; and WRF Capital also committed to Accelerator IV. WRF is the VC investment arm of the Washington Research Foundation.
ContraFect Corp. (NASDAQ:CFRXU) was up $0.45 to $6.45 on its first day of trading Tuesday after raising $36 million through the sale of 6 million units at $6 in an IPO underwritten by Maxim Group. The price values ContraFect at $119 million. Earlier this month, the company said it planned to sell 5.5 million units at $5-$6 after filing to raise up to $23 million in the offering in April. Each unit comprises a share, a class A warrant to purchase a share at $4.80 and a class B warrant to purchase half a share, with each whole warrant exercisable at $4. By Sept. 12, the units will separate into common stock expected to trade under the ticker "CFRX"; class A warrants under the ticker "CFRXW"; and class B warrants under "CFRXZ."
ContraFect is developing a class of enzymes called lysins, which break open the cell walls of Gram-positive bacteria, along with combinations of mAbs that target virulence factors. CF-301, a lysin targeting Staphylococcus aureus, is in preclinical testing, with Phase I testing slated to start next year. CF-404, a combination of three human mAbs against influenza, is in preclinical testing for seasonal and pandemic influenza infections, with Phase I testing slated to begin in 2016 (see BioCentury, July 4, 2011).
Merck & Co. Inc. (NYSE:MRK) is not interested in pursuing deals "solely or primarily for the specific purpose of tax inversion," said CEO and Chairman Kenneth Frazier during a conference call to discuss the pharma's 2Q14 financial results. Frazier said Merck's strategy is focused on pipeline innovation, but that the pharma will "continue to look for value-added bolt-on opportunities" such as the pending acquisition of HCV company Idenix Pharmaceuticals Inc. (NASDAQ:IDIX), which complements its HCV portfolio. The Idenix deal is slated to close this quarter (see BioCentury, June 16).
Merck also disclosed in its earnings that FDA issued a complete response letter for corifollitropin alfa for controlled ovarian stimulation to treat infertility in women participating in assisted reproductive technology (ART). The pharma declined to disclose details about the letter or a timeline for resubmission.
Merck reported 2Q14 non-GAAP EPS of $0.85, beating the Street's estimate of $0.81 and up from $0.84 in 2Q13. Second quarter sales were $10.9 billion, above the Street's $10.6 billion estimate but down from $11 billion in 2Q13. The pharma also raised the lower end of its 2014 EPS guidance and now expects full-year non-GAAP EPS of $3.43-$3.53, compared to $3.35-$3.53 previously. Merck continues to expect full year revenues of $42.4-$43.2 billion.
Qiagen N.V. (Xetra:QIA; NASDAQ:QGEN) reported 2Q14 financial results late Tuesday that beat the Street and launched a new $100 million share repurchase program. The sample and assay technology supplier reported 2Q14 adjusted diluted EPS of $0.26, above the Street's $0.25 estimate and up from $0.24 in 2Q13. Adjusted net sales in the quarter grew 4% at constant exchange rates to $331.2 million from $316.4 million in 2Q13 and beat the Street's $330.8 million expectation.
Qiagen reiterated its 2014 guidance of net sales growth of 4-5% at constant exchange rates over 2013 and adjusted diluted EPS of $1.07-$1.09. The company reported 2013 adjusted net sales of $1.3 billion. Qiagen also launched its third $100 million repurchase program after finishing its second $100 million program in June. The company announced the third program during its 1Q14 financial results in May (see BioCentury Extra, May 6).
Qiagen was up EUR 0.10 to EUR 18.64 and up $0.27 to $25.18 in New York on Tuesday. The company reported its financial results after market close.
Women's health company TherapeuticsMD Inc. (NYSE-M:TXMD) proposed late Tuesday to raise $40 million in a follow-on underwritten by Goldman Sachs and Noble Capital Markets. TherapeuticsMD is developing a pipeline of hormone therapy products for menopause-related hormone deficiencies, with two products in Phase III testing: TX 12-001HR, an oral combination of estradiol and progesterone; and TX-002HR, an oral estradiol. The company also markets branded and generic prescription prenatal vitamins, as well as OTC vitamins and cosmetics.
TherapeuticsMD was up $0.12 to $4.67 on Tuesday.
Pharmacyclics Inc. (NASDAQ:PCYC) jumped $16.25 (15%) to $124.75 on Tuesday, adding $1.2 billion in market cap for a valuation of $9.4 billion. The move comes after FDA granted full approval to Imbruvica ibrutinib from Pharmacyclics and partner Johnson & Johnson (NYSE:JNJ) as first-line therapy for chronic lymphocytic leukemia (CLL) in patients with 17p deletion and to treat CLL in patients who have received at least one prior therapy. The drug already had accelerated approval for the latter indication (see BioCentury Extra, July 28).
The approval -- which triggered $60 million in milestone payments to Pharmacyclics -- came during market hours on Monday. At least one analyst upgraded on the approval after Monday's close. Leerink's Howard Liang upgraded the stock to outperform from market perform and raised his price target to $142 from $102. Liang in part cited a new survey of U.S. hematologists and oncologists who said they expect to increase their use of Imbruvica following full approval.
United Therapeutics Corp. (NASDAQ:UTHR) gained $7.36 to $98.21 on Tuesday after reporting 2Q14 financial results that beat the Street. Diluted GAAP EPS in the quarter was $2.10, beating the Street's $1.75 estimate and up from $1.52 in 2Q13. Revenues in 2Q14 were $322.8 million, topping the Street's $308 million estimate and up from $280.6 million in the prior year's quarter. United Therapeutics' Tuesday move translates to a $347.9 million gain in market cap for a valuation of $4.6 billion.
Amy Schulman, former general counsel and EVP at Pfizer Inc. (NYSE:PFE), joined Polaris Partners as a venture partner. Schulman also became CEO of Polaris portfolio company Arsia Therapeutics Inc. (Waltham, Mass.), which is developing excipients that reduce the viscosity of biologics allowing them to be injected subcutaneously.
In June, Polaris filed for a seventh fund looking to raise $400 million. In 2011, the firm closed its sixth fund at $375 million. The firm has more than $3.5 billion under management (see BioCentury Extra, June 25).
Galectin Therapeutics Inc. (NASDAQ:GALT) fell $8.84 (61%) to $5.50 on Tuesday after reporting data from the Phase I GT-020 trial of the company's GR-MD-02 to treat non-alcoholic steatohepatitis (NASH) with advanced hepatic fibrosis. In nine patients in the second cohort of the trial, 4 mg/kg IV GR-MD-02 on days 0, 21, 28 and 35 did not significantly improve exploratory secondary endpoints evaluating serum biomarkers of fibrosis and inflammation vs. placebo. The endpoints included FibroTest scores, an indirect biomarker of fibrosis; Enhanced Liver Fibrosis (ELF) scores, a marker of fibrotic tissue turnover; and levels of IL-6 or IL-8. The 4 mg/kg dose was well tolerated, with no serious adverse events; the primary endpoint of the dose-escalating trial is safety.
In March, Galectin said a 2 mg/kg dose of GR-MD-02 on days 0, 28, 35 and 42 did significantly reduce FibroTest scores and levels of IL-6 and IL-8 vs. placebo, but non-significantly reduced ELF scores vs. placebo. Galectin said differences in biomarker data between the cohorts may potentially be due to sampling dates.
An independent DSMB recommended continuing to the third cohort of the trial, which will enroll 20 patients to receive placebo or 8 mg/kg GR-MD-02. Data are expected in November. GR-MD-02 is a galectin-3 (LGALS3) and LGALS1 inhibitor.
La Jolla Pharmaceutical Co. (NASDAQ:LJPC) -- which has an LGALS3 inhibitor in preclinical development for NASH -- was off $1.15 (10%) to $10.65 on Tuesday. The company plans to start a Phase I/II trial of the compound, GCS-100, next half.
Other companies with compounds in development for NASH were up slightly on the day. Intercept Pharmaceuticals Inc. (NASDAQ:ICPT) was up $10.15 to $234.14, and Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) was up $0.15 to $7.85. Genfit S.A. (Euronext:GNFT) was up EUR 0.15 to EUR 31.60 on Tuesday.
Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) disclosed in its 2Q14 earnings late Tuesday that lumacaftor (VX-809) plus Kalydeco ivacaftor missed the primary endpoint vs. placebo in a 125-patient Phase II trial in CF patients with one copy of the delta F508 CF transmembrane conductance regulator (CFTR) mutation (p=0.5978). Next quarter, the company plans to submit an NDA to FDA and MAA to EMA for the combination for CF patients with two copies of the delta F508 CFTR mutation (see BioCentury, June 30).
Vertex was unchanged at $95.56 on Tuesday.
Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) said in its 2Q14 financial results that cystic fibrosis patients in Australia still can't access Kalydeco ivacaftor through public reimbursement. Kalydeco was approved in Australia last July; however, the company said Kalydeco is not yet listed on the Australian Pharmaceutical Benefits Scheme (PBS). In March, the Pharmaceutical Benefits Advisory Committee (PBAC) reiterated a recommendation that at Vertex's proposed price, Kalydeco is only cost-effective in patients who respond to the same extent and duration as shown in clinical trials. PBAC recommended listing Kalydeco on the PBS for reimbursement on a "pay for performance" scheme.
On a conference call to discuss its 2Q14 results, Vertex said it submitted a proposal in response to the PBAC recommendation to the Australian Department of Health in May, but declined to disclose details. Vertex expects a decision this half, and said its 2014 revenue guidance is in part contingent on securing reimbursement of Kalydeco in Australia. Vertex reiterated full-year revenue guidance of $520-$550 million, including Kalydeco revenues of $470-$500 million. Kalydeco is reimbursed in 18 countries.
Vertex reported 2Q14 revenues of $138.4 million, beating the Street's $132.1 million estimate but down from $254.8 million in the prior year's quarter. The company reported a 2Q14 non-GAAP loss per share of $0.61. Vertex, which released its 2Q14 results after market close, was unchanged at $95.56 on Tuesday.
The company also disclosed that lumacaftor plus Kalydeco missed the primary endpoint in a Phase II trial to treat CF (see above).
Roche (SIX:ROG; OTCQX:RHHBY) partnered with VC fund AmorChem L.P. (Montreal, Quebec) to discover small molecules to treat myotonic muscular dystrophy type 1. Discovery will take place at AmorChem's medicinal chemistry incubator NuChem Therapeutics Inc. using technology discovered by Universite de Montreal. In 2013, the university granted AmorChem exclusive rights to develop and commercialize the technology, which generated compounds that disrupt RNA foci formation and repair RNA splicing defects caused by a mutation in the dystrophia myotonica-protein kinase (DMPK) gene.
Under the agreement, Roche and AmorChem will both provide R&D funding. Roche will have the option to license exclusive, worldwide rights to the technology. AmorChem is eligible for up to $107 million in development and commercialization milestones, plus single-digit tiered royalties.
The European Commission approved Gazyvaro obinutuzumab from Roche (SIX:ROG; OTCQX:RHHBY) in combination with chlorambucil for first-line chronic lymphocytic leukemia (CLL) in patients unsuitable for fludarabine-based therapy. Roche plans to launch the drug in Europe this year. The pharma already markets the glycoengineered humanized mAb against CD20 in the U.S. as Gazyva for the indication.
The U.S. Senate Appropriations Committee's subcommittee on labor, health and human services, education and related agencies sent to the full committee a FY15 draft appropriations bill that would provide up to $17 million to Medicare's 340B program. The 340B program requires manufacturers to deeply discount outpatient drugs to hospitals and clinics bearing the brunt of healthcare for low income and other special populations. The bill would provide $10.2 million in base appropriations for the 340B program -- the same level as FY14 -- as well as establish a new "cost recovery fee" on 340B hospitals expected to generate $7 million in FY15.
Laurel Todd, managing director of reimbursement and health policy at the Biotechnology Industry Organization, discussed the controversy over the 340B program and the need for increased funds to help HHS's Health Resources and Services Administration (HRSA) oversee the program during the July 27 edition of BioCentury This Week television (see BioCentury This Week, July 27).
The draft bill also provides $30.5 billion for NIH in FY15, up from $29.9 billion in agency funding in FY14. A vote by the full committee on the draft has not yet been scheduled. President Obama requested $30.2 billion for NIH in his FY15 budget (see BioCentury Extra, March 4).
Dueling reports released by groups representing drug makers on one side and payers on the other, highlight the benefit of new HCV treatments as well as the cost. Sovaldi sofosbuvir from Gilead Sciences Inc. (NASDAQ:GILD) and Olysio simeprevir from Johnson & Johnson (NYSE:JNJ) will increase 2015 federal spending on the individual Medicare Part D program by $2.9-$5.8 billion (6-11%), according to a report commissioned by the Pharmaceutical Care Management Association, which represents payers. The report does not account for savings from other medical costs associated with HCV or the potential impact of future price competition. Benefit consultancy Milliman Inc. prepared the report, which was published on Tuesday.
On the drug maker side, California Health Institute (CHI) also published a report on Tuesday showing that switching to new interferon-free regimens could save 30,000 more lives in the U.S. compared to current standard of care by 2030. Compared to no treatment, IFN-free regimens will save 67,000 lives by 2015. CHI, which represents more than 275 biotech and pharma companies, used an epidemiological model created by the Center for Disease Analysis.
Gilead and J&J have been under pressure from lawmakers and PBMs to lower the price of their HCV drugs. In the U.S., the wholesale acquisition cost (WAC) for a 12-week course of Sovaldi is $84,000, while Olysio costs about $66,360 for a 12-week course. Sovaldi is approved in combination with ribavirin with or without peginterferon in patients with HCV genotypes 1, 2, 3 and 4 infections. Olysio is approved in combination with ribavirin and peginterferon in patients with HCV genotype 1b infection and with HCV genotype 1a infection without the Q80K polymorphism (see BioCentury, June 9).
The Patient-Centered Outcomes Research Institute approved awards totaling $54.8 million to support 33 projects on patient-centered comparative clinical effectiveness research. The studies will compare different approaches to delivering care, improving patients' access to care, and strengthening methods to conduct more rigorous patient-centered comparative effectiveness research.
PCORI also approved the topic of the first research trial to be conducted through the National Patient-Centered Clinical Research Network (PCORnet). PCORI will provide up to $10 million for the study, which will compare low- or high-dose aspirin in patients with coronary artery disease. PCORI will appoint a committee to help develop the trial design, as well as issue a proposal request to PCORnet partners this year. Last December, PCORI provided $93.5 million in funding to build PCORnet, a national network that includes 29 individual research data networks.
The Affordable Care Act established PCORI to conduct comparative effectiveness research. The institute has awarded almost $549 million since 2012. It approved a resolution in 2013 to commit up to $1 billion in research funding over the next two fiscal years (see BioCentury Extra, Nov. 19, 2013).
Horizon Pharma Inc. (NASDAQ:HZNP) said pharmacy benefit managers CVS Caremark Corp. (NYSE:CVS) and Express Scripts Holding Co. (NASDAQ:ESRX) notified the company that arthritis drugs Duexis ibuprofen/famotidine (HZT-501) and Vimovo naproxen/esomeprazole will no longer be on their formularies and will be placed on their exclusion lists effective Jan. 1, 2015. Monday's BioCentury Extra misrepresented the effective exclusion date.
Campbell Alliance's Dealmakers' Intentions Study is the only forward-looking measure of dealmaking activity in the biopharma industry. Now in its sixth year, the study provides insight into what will likely drive the industry's partnering and M&A efforts moving forward the results of which were released at last month's BIO International Convention. Download a copy of the full white paper here.