Activist investor Third Point on Tuesday outlined a plan for increasing the valuation of Amgen Inc. (NASDAQ:AMGN) by more than 80% in the next two years. The firm wants Amgen to split into two companies, one each for "cash-generative Mature Products and R&D-intensive Growth Products," although it didn't provide specifics.
Amgen added $6.58 to $144.09 on Tuesday, closing with a market cap of $109.5 billion. It gained at least 3% after Third Point's Daniel Loeb outlined his ideas for Amgen at an investor conference.
According to a letter to Third Point investors on Tuesday, the firm said the split "could create almost $249 per share in total value" in two years.
Third Point noted Amgen has long underperformed its biotech peers and "even trades at a discount to the U.S. pharmaceutical sector." Indeed, Amgen's P/E ratio of 15.6 at the end of 3Q14 was lower than 21.9 for large cap biotechs and 17.3 for pharmas (see BioCentury, Oct. 6).
Third Point's 3Q investor letter listed three reasons why it believes Amgen needs to alter its course: a dearth of R&D productivity, flat operating margins for 10 years, and a lack of "home-run" acquisitions in the past 12 years. The firm highlighted last year's "questionable" acquisition of cancer play Onyx Pharmaceuticals Inc. for about $10.4 billion.
On the product development front, Third Point said that "despite investing a cumulative $32 billion in R&D since 2002, over 75% of Amgen's current revenues still come from products introduced before that year."
In a statement, Amgen said it will provide a business review on Oct. 28 that will update shareholders on priorities and its ongoing restructuring plans.
Third Point said it is one of Amgen's largest shareholders and noted published estimates that it owns more than $1 billion of stock, which would translate to about 6.9 million shares using the Tuesday close. According to SEC filings, Third Point held no position in Amgen as of March 31. In mid-August the firm held only 450,000 shares.
Third Point credited Sanford Bernstein analyst Geoffrey Porges for initially proposing the idea of breaking Amgen into two.
FDA's Pulmonary-Allergy Drugs Advisory Committee voted 13-2 that data support approval of Kalydeco ivacaftor from Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) to treat cystic fibrosis patients six and older with an R117H mutation in the CF transmembrane conductance regulator (CFTR) gene. The panel also voted 9-6 that efficacy data provide substantial evidence of a clinically meaningful benefit, and 14-1 that safety data for the overall Kalydeco CF program are sufficient for approval. The PDUFA date is Dec. 30.
Kalydeco missed the primary endpoint of improving the mean absolute change in percent predicted FEV1 from baseline to week 24 but significantly reduced sweat chloride levels, a secondary endpoint, vs. placebo in the 69-patient Phase III KONDUCT trial in CF patients six and older with the R117H mutation.
Kalydeco led to a significant mean absolute improvement of 5% in percent predicted FEV1 from baseline to week 24 vs. placebo in a pre-specified subgroup of patients 18 and older. But in a subgroup of patients ages 6-11 years, Kalydeco led to a mean absolute decline of 6.3% in percent predicted FEV1 from baseline to week 24 vs. placebo (p=0.03).
Panel members were concerned about the efficacy data in patients under 18 years of age, but said the efficacy data were "compelling" in adults.
Four members who voted that efficacy data did not provide evidence of a meaningful benefit were concerned about the lack of effect in pediatric patients, but still voted in favor of approval for CF patients six and older because they felt their concerns could be addressed with labeling and postmarketing commitments.
According to Vertex, there are about 500 CF patients six and older with the R117H mutation in the U.S., of whom about 300 are 18 and older.
Kalydeco, a small molecule potentiator of the CFTR gene, is approved in the U.S. to treat CF patients ages six and older with at least one copy of nine mutations in the CFTR gene.
Vertex was up $3.39 to $108.16 on Tuesday. The voting came before market close.
Enanta Pharmaceuticals Inc. (NASDAQ:ENTA) fell $4.76 (10%) to $41.83 on Tuesday after the company said it decided not to exercise its option to co-develop HCV candidate ABT-493 with AbbVie Inc. (NYSE:ABBV) in the U.S. Enanta and Abbott Laboratories (NYSE:ABT) discovered the next-generation HCV NS3/4A protease inhibitor under a 2006 deal.
The option would have allowed Enanta to fund 40% of development and U.S. commercialization costs and receive 40% of the profits from regimens containing the HCV therapy. Enanta said it will instead fund development of its in-house HCV candidates and other infectious disease programs. The company recently regained rights to EDP-239, an HCV non-structural protein 5A (NS5A) inhibitor that is in Phase I testing, from Novartis AG (NYSE:NVS; SIX:NOVN) as the Swiss pharma exits the HCV business (see BioCentury Extra, Oct. 1).
The companies also released a new royalty structure for regimens containing ABT-493 and ABT-450, an oral HCV S3/4A protease inhibitor discovered under the same deal. ABT-450 is under Priority Review by FDA and accelerated assessment by EMA as a combination therapy with AbbVie's Norvir ritonavir, ombitasvir (ABT-267) and dasabuvir (ABT-333) with and without ribavarin to treat HCV genotype 1. ABT-493 is in two Phase II trials in combination with HCV NS5A protein inhibitor ABT-530 to treat multiple genotypes of HCV.
Enanta is eligible to receive tiered double-digit royalties on 45% of worldwide sales of ABT-450 plus ombitasvir and on 30% of worldwide sales of ABT-450 plus ombitasvir and dasabuvir. The companies also settled on allocations for future sales of ABT-493-containing regimens, with Enanta receiving royalties on 50% of sales of two-drug regimens and 33.3% of sales of three-drug regimens.
Enanta has already received $57 million up front and $95 million in milestones under the deal. It is eligible for $155 million in additional milestones, plus royalties.
NICE issued final guidance recommending Tafinlar dabrafenib from GlaxoSmithKline plc (LSE:GSK; NYSE:GSK) to treat unresectable metastatic melanoma with a BRAF V600 mutation, its approved indication.
The committee concluded that the oral BRAF protein kinase inhibitor improved progression-free survival compared to dacarbazine chemotherapy and that its cost-effectiveness is similar to Zelboraf vemurafenib from Roche (SIX:ROG; OTCQX:RHHBY), which NICE recommends to treat unresectable locally advanced or metastatic BRAF V600 mutation-positive melanoma.
NICE's recommendation is in line with its final appraisal determination (FAD) issued in September, when it stipulated that GSK provide the drug at an undisclosed discount under a patient access scheme. Tafinlar, which is recommended at 150 mg twice daily and comes in 28-capsule packages, has a list price of L1,400 ($2,254) for a 75 mg capsule package and L933 ($1,503) for a 50 mg capsule package.
Novartis AG (NYSE:NVS; SIX:NOVN) is acquiring GSK's portfolio of 11 marketed cancer drugs, including Tafinlar, in a deal slated to close in 1H15 (see BioCentury, April 28).
FDA approved an sBLA from Auxilium Pharmaceuticals Inc. (NASDAQ:AUXL) for Xiaflex collagenase clostridium to treat up to two Dupuytren's contracture joints in the same hand during a single treatment visit. The injectable form of collagenase previously was approved for one collagen cord.
Auxilium said 35-40% of Dupuytren's surgeries are performed on multiple joints. The stock was up $0.53 to $31.12 on Tuesday.
Auxilium licensed exclusive, worldwide rights to Xiaflex from BioSpecifics Technologies Inc. (NASDAQ:BSTC) to treat Dupuytren's and other musculoskeletal disorders. BioSpecifics gained $2.57 to $28.05 on Tuesday.
Omeros Corp. (NASDAQ:OMER) was off $1.70 (12%) to $12.12 on Tuesday after suspending a Phase II trial of OMS824 to treat Huntington's disease (HD).
Omeros' decision followed an unspecified observation in "several" rats receiving the maximum dose of OMS824, whose drug exposure was at an unspecified multiple of that observed in human HD patients. Omeros said it did not observe comparable results in nonhuman primates with drug exposures comparable to those in the rat study.
CEO Gregory Demopulos would not give further details about the observation or the dose in the rat study.
FDA has requested that Omeros further evaluate the rat study and other nonclinical trials prior to restarting the human trial. Demopulos said that based on available data, Omeros does not believe that OMS824 caused the observation, and that existing data will support resumption of the suspended HD trial.
OMS824, a selective inhibitor of phosphdiesterase-10 (PDE-10), has Fast Track and Orphan Drug designation in the U.S. for HD. The company has completed a Phase II study of OMS824 to treat schizophrenia. Demopulos said Omeros is still planning schizophrenia studies, and that the new information would not affect its plans in that indication.
Illumina Inc. (NASDAQ:ILMN) gained $2.1 billion in market cap on Tuesday in the wake of its earnings release after market on Monday. The shares added $15.08 to $179.55 after the sequencing company said revenue jumped 35% year over year to $480.6 million and raised its revenue guidance for the year. The company now anticipates revenue to grow about 30% over 2013, up from prior guidance of 25-26% growth.
Non-GAAP diluted EPS is now expected to be $2.63-$2.65, up from prior guidance of $2.26-$2.28. Adjusted gross margins climbed to 73.2% from 70.9% in 2Q14.
Also on Tuesday, Actelion Ltd. (SIX:ATLN) gained CHF3.10 to CHF105.5 after again increasing its core earnings guidance for 2014. On the conference call, CFO Andre Muller noted "solid product sales" along with "ongoing cost controls" as the reasons for the rosier outlook. Actelion now expects 2014 core earnings growth in the low 20% range at constant exchange rates, up from prior guidance of growth in the mid-teens. In July, the company upped its guidance from upper single-digit growth.
The Swiss biotech reported 3Q14 EPS of CHF1.25, up 36% from CHF0.92 in 3Q13 and above the Street's estimate of CHF1.14. Quarterly revenues gained 13% to CHF496.3 million ($521.2 million), beating the analyst consensus estimate of CHF491.8 million. The top line was largely driven by sales of Opsumit macitentan, which was approved in the U.S. and Europe in 2013 for pulmonary arterial hypertension (PAH). Opsumit sales were CHF59.1 million ($62 million) in 3Q14 and CHF112 million ($117.6 million) for the first nine months of 2014.
Oncology play Unum Therapeutics (Cambridge, Mass.) raised $12 million in a series A round led by Atlas Venture and Fidelity Biosciences. Sanofi-Genzyme BioVentures also participated.
Unum uses its antibody-coupled T cell receptor (ACTR) platform to combine engineered T cells with tumor-targeting antibodies. By year end, the company plans to begin clinical testing of its lead program, according to CEO Charles Wilson.
Before joining Unum, Wilson was head of partnering for research and early development at Novartis AG (NYSE:NVS; SIX:NOVN). Dario Campana, the company's scientific founder, developed the ACTR technology at the National University of Singapore (see SciBX, Dec. 12, 2013).
Unum's board of directors will include Wilson, Bruce Booth of Atlas and Ben Auspitz of Fidelity.
One day after withdrawing a proposed IPO, Viamet Pharmaceuticals Inc. (Durham, N.C.) closed a $60 million series D round led by new investor Brandon Point Industries Ltd. working with Woodford Investment Management.
The company did not respond to inquiries about whether existing investors participated. They include Novartis Venture Fund; Lilly Ventures; Hatteras Venture Partners; Intersouth Partners; Lurie Holdings; and Astellas Venture Management.
Viamet also said it will spin out its prostate cancer program to existing investors in a newco called Innocrin Pharmaceuticals led by former Viamet CSO William Moore. Innocrin will be investigating VT-464 in Phase II studies in castration-resistant prostate cancer (CRPC). The compound is a dual lyase-selective CYP17 inhibitor and androgen receptor antagonist.
Meanwhile, Viamet will be developing its lead antifungal VT-1161. The small molecule metalloenzyme inhibitor of cytochrome P450 C-14 alpha demethylase (CYP51) is slated to begin Phase IIb development in 4Q14 to treat recurrent vulvovaginal candidiasis and onychomycosis.
In September, the FDA granted Orphan Drug designation to a second compound, VT-1129 to treat cryptococcal meningitis, and Viamet plans to begin clinical development in mid-2015. VT-1129 also is an oral small molecule inhibitor of CYP51.
Viamet did not provide a reason for withdrawing its NASDAQ IPO in its SEC filing on Monday. It had filed to raise up to $75 million in a deal that was to have been underwritten by Piper Jaffray; Wells Fargo; and Stifel.
The company also did not reply to an inquiry about whether the new round was tranched. It said Hatteras partner Robert Ingram would join the company's board as chairman, along with Brandon Point co-founder Kelly Martin, the former CEO of Elan Corp. plc. Brandon Point partner Adrian Howd will join the board within six months after the financing closes.
Tobira Therapeutics Inc. (San Francisco, Calif.) amended the terms for its proposed IPO on NASDAQ underwritten by Oppenheimer & Co., removing the price range, the number of shares and several of the underwriters. The company on Aug. 7 said it would postpone the offering, but did not give a reason (see BioCentury Extra, Aug. 7).
Tobira, which had filed under provisions of the Jumpstart Our Business Startups (JOBS) Act, had previously listed BMO Capital Markets; JMP Securities; and Nomura as additional underwriters in July, but did not name them in its amended filing. Oppenheimer was among the original underwriters. The company's financial spokesperson was not available for comment regarding the changes.
In July, Tobira planned to sell 4.6 million shares at $12-$14. At $13, it would have raised $60 million and been valued at $142.7 million. The company originally filed in June to raise up to $69 million.
Tobira is slated to began a Phase IIb trial this month of lead compound cenicriviroc, a dual CC chemokine receptor 5 (CCR5; CC195) and CCR2 antagonist, to treat non-alcoholic steatohepatitis (NASH). The biotech has exclusive, worldwide rights from Takeda Pharmaceutical Co. Ltd. (Tokyo:4502).
FDA issued its first Letter of Support for two kidney biomarkers identified by the Predictive Safety Testing Consortium (PSTC) of the Critical Path Institute (C-Path).
Elevated levels of the two biomarkers, osteopontin (OPN) and neutrophil gelatinase-associated lipocalin (NGAL) in urine were associated with renal tubular epithelial degeneration/necrosis in C-Path's animal studies. FDA encouraged investigators to conduct non-clinical and exploratory clinical studies to evaluate the relevance of OPN and NGAL measurements in determining kidney injuries.
A Letter of Support from FDA does not qualify a biomarker, but rather encourages further evaluation of a promising candidate biomarker.
To date, FDA, EMA and the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) have qualified seven urinary biomarkers for kidney injury. They include kidney injury molecule-1, albumin, total protein, beta-2-microglobulin, cystatin C, clusterin and trefoil factor-3.
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