Biotech indices posted steep losses on Tuesday, wiping out most of the gains from a short rally late last week and prolonging an extended slump for the sector.
Decliners outnumbered gainers by 90 to 10 among BioCentury 100 companies. Among the biggest decliners was sequencing company Illumina Inc. (NASDAQ:ILMN), which slipped $17.36 (11%) to $145.81 after missing 3Q15 sales estimates and cutting 4Q15 guidance (see below).
Exact Sciences Inc. (NASDAQ:EXAS) plummeted $8.55 (46%) to $9.98 after its Cologuard colorectal cancer screening assay received a disappointing assessment in a draft recommendation from the U.S. Preventive Service Task Force (see below).
In addition, a Wall Street Journal story highlighted drug pricing strategies, noting that among 20 global pharmas, 80% of net profit growth stemmed from price increases in the U.S.
The BioCentury 100 sank 231.27 (3.9%) to 5,773.43 on Tuesday. The index has now lost 18% since Sept. 18, 29.3% since its July 20 peak, and 3.7% for the year.
The NYSE Arca Biotechnology Index (BTK) shed 4.8% on Tuesday, while the NASDAQ Biotechnology Index (NBI) lost 3.8% and the iShares NASDAQ Biotechnology ETF dipped 3.6%.
Express Scripts Holding Co. (NASDAQ:ESRX) said Tuesday it would cover both newly launched PCSK9 inhibitors in exchange for rebates on the lipid-lowering drugs.
The PBM will provide co-preferred status to Repatha alirocumab from Amgen Inc. (NASDAQ:AMGN) and Praluent evolocumab from Sanofi (Euronext:SAN; NYSE:SNY) and Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) on the specialty tier of its National Preferred Formulary, which covers about 25 million individuals.
Express Scripts will cover the drugs for their approved indications. Both PCSK9 drugs are approved as an adjunct to diet and maximally tolerated statin therapy in adults with heterozygous familial hypercholesterolemia (HeFH) or clinical atherosclerotic cardiovascular disease (ASCVD). Repatha also is approved to treat homozygous familial hypercholesterolemia (HoFH).
While the rebates aren't disclosed, Express Scripts said that based on the deal, it will spend about $750 million on PCSK9 inhibitors in 2016. The mAbs are priced at about $14,000 per year.
Additionally, Express Scripts will cap total plan PCSK9 inhibitor costs for 2016 for clients enrolled in the PBM's cholesterol care value program, which uses clinical documentation to ensure that only those patients for which the drugs are approved have access. The caps aren't disclosed and will be set for each individual client.
Amgen said Express Scripts represents the first national formulary decision for Repatha. Sanofi wouldn't comment on whether it had reached exclusive or co-exclusive deals with other payers or PBMs. Both companies said they continue to engage with payers about coverage decisions for the drugs.
Exact Sciences Corp. (NASDAQ:EXAS) plunged $8.55 (46%) to $9.98 on Tuesday after the U.S. Preventative Services Task Force (USPSTF) issued draft guidelines that listed Cologuard as an alternative screening test, rather than a recommended test, for colorectal cancer.
If finalized, the recommendation may hinder the company's reimbursement negotiations with private payers. On a conference call Tuesday, Chairman, President and CEO Kevin Conroy said the USPSTF decision was different from "what we and most people expected."
The task force said Cologuard was "more sensitive but less specific" than a fecal immunochemical test (FIT) and that its use might lead to more frequent and invasive follow-up tests in patients with abnormal results. The draft guidelines also pointed to a lack of studies assessing the impact of Cologuard screening on cancer incidence, morbidity, quality of life or mortality. The USPSTF said Cologuard may be useful in "select clinical circumstances," but did not define those circumstances.
Under the Affordable Care Act, private payers are required to provide full coverage for preventive services recommended by the USPSTF. However, there are no comparable guidelines regarding services listed by the USPSTF as alternative tests. Conroy said on the call that Exact Sciences does not yet know whether the recommendation "will give payers the same level of comfort as a specific screening strategy with a recommended test."
Conroy said Exact Sciences plans to work with the USPSTF to include Cologuard as a recommended test, and said it will encourage the task force to consider data on the use of Cologuard every three years, rather than every year, prior to issuing its final recommendation.
The USPSTF recommended annual screenings with FIT or a high-sensitivity guaiac fecal occult blood test, flexible sigmoidoscopy every 10 years plus FIT annually, or colonoscopy every 10 years. CT colonography was listed as an alternative test along with Cologuard.
The draft recommendation is open for public comments until Nov. 2. Exact Sciences expects a final recommendation next year.
Cologuard was the first product to undergo a pilot parallel assessment by CMS and FDA. Last week, CMS issued a preliminary determination maintaining Medicare's reimbursement rate for Cologuard in 2016 at $492.72 per test. The product uses a multiplexed quantitative Invader assay for the simultaneous detection of methylated and unmethylated sequences in the promoter region of the vimentin (VIM) gene.
Illumina Inc. (NASDAQ:ILMN) sank $17.36 (11%) to $145.81 on Tuesday, shedding $2.6 billion in market cap after it reported 3Q15 revenues and issued 4Q15 guidance that disappointed investors. Its 3Q15 revenues of $550 million were shy of analysts' $568.6 million consensus estimate, and its 4Q15 guidance of $570 million was below the consensus of $602.8 million.
The company issued a preliminary financial statement after market close Monday; it intends to report full quarterly results on Oct. 20 (see BioCentury Extra, Oct. 5).
Illumina ended the day off 40% from its 52-week high of $242.37.
The losses were part of a wider sell-off that dragged down biotech stocks on Tuesday (see above).
Alkermes plc (NASDAQ:ALKS) fell $1.27 to $58.50 amid a wider biotech sell-off on Tuesday, a day after FDA approved the company's Aristada aripiprazole lauroxil to treat schizophrenia. The drug is an injectable, extended-release formulation of aripiprazole using LinkeRx technology (see BioCentury Extra, Oct. 5).
FDA also denied a Citizen's Petition from Otsuka Pharmaceuticals Co. Ltd. (Tokyo, Japan) arguing that approval of Aristada should be denied or delayed until Otsuka's three-year exclusivity period for Abilify Maintena expires in December 2017. Abilify Maintena is a once-monthly intramuscular depot formulation of aripiprazole, a small molecule partial agonist of the dopamine D2 and serotonin (5-HT1A) receptors and antagonist of the serotonin (5-HT2A) receptor (see BioCentury Extra, July 16).
FDA denied the petition on the grounds that Aristada and Abilify Maintena do not share an active moiety, and granted Aristada five-year NCE exclusivity. Aristada's active moiety is N-hydroxymethyl aripiprazole, a prodrug of aripiprazole. Abilify Maintena's active moiety is aripiprazole.
The agency approved three different doses of Aristada, administered monthly or every six weeks.
On a conference call with investors, Alkermes SVP and chief commercial officer Mark Stejbach said Aristada's price would be "comparable to other products in this class." CEO Richard Pops added that the midpoint price for long-acting injectable therapies is about $1,500 per month, but cost would vary with dosing scheme. Pops said the company is studying Aristada in an eight-week dosing schedule.
Neurology company Rodin Therapeutics Inc. (Cambridge, Mass.) named Adam Rosenberg CEO. Rosenberg was CEO of Teleos Therapeutics (Medford, Mass.).
Oncology play Tracon Pharmaceuticals Inc. (NASDAQ:TCON) named Ronald Shazer CMO. Shazer was senior director and clinical lead for oncology at Pfizer Inc. (NYSE:PFE).
CNS company Luc Therapeutics Inc. (Cambridge, Mass.), formerly Mnemosyne Pharmaceuticals Inc., named Timothy Piser CSO. He was senior director of pharmacology at Forum Pharmaceuticals Inc. (Waltham, Mass.).
Autoimmune company Lycera Corp. (Ann Arbor, Mich.) named Alex Howarth CFO. Howarth was EVP and CFO at moksha8 Pharmaceuticals Inc. (Wayne, Pa.).
Cancer play Infinity Pharmaceuticals Inc. (NASDAQ:INFI) named William Bertrand EVP and general counsel effective Oct. 19. Bertrand was SVP and general manager at Salix Pharmaceuticals Ltd., which Valeant Pharmaceuticals International Inc. (TSX:VRX; NYSE:VRX) acquired.
Ophthalmology company Aerpio Therapeutics Inc. (Cincinnati, Ohio) hired Steve Pakola as CMO. Pakola was CMO at Amakem N.V. (Diepenbeek, Belgium).
Immunotherapy play NantKwest Inc. (NASDAQ:NK) named Stephen Farrand SVP of global manufacturing. Farrand was VP of bioprocess development at the Merck Research Laboratories unit of Merck & Co. Inc. (NYSE:MRK).
Advaxis Inc. (NASDAQ:ADXS) fell $2.66 (26%) to $7.65 in after-hours trading Tuesday after it said FDA placed a clinical hold on an IND for axalimogene filolisbac (ADXS-HPV) to treat cervical cancer. The company said the hold would affect four clinical trials of the live Listeria monocytogenes-based immunotherapy expressing E7 transforming protein (Human papillomavirus-16; HpV16gp2).
Advaxis said FDA placed the hold in response to a safety report concerning the death of a patient who tested positive for the Listeria strain used in axalimogene filolisbac more than two years after her last treatment with the therapy. The patient received antibiotics during hospitalization and was discharged, but died after experiencing respiratory distress about two weeks later. Advaxis said its Listeria strain is incapable of causing infection and said the investigator ruled that the patient died due to progression of her cervical cancer.
On a conference call Tuesday, Advaxis CMO David Mauro said that "in no way" did the therapy contribute to the patient's death. Mauro said that medical implants the patient received during orthopedic surgery could have provided a location for the Listeria strain to exist for long periods without causing infection, noting that in Phase I studies Listeria monocytogenes was not detectable in blood cultures 48 hours after axalimogene filolisbac infusion.
Advaxis said it is working with FDA to resolve the issue and has provided additional data to the agency. Mauro declined to give a timeline on the call, but said the company is optimistic for an "expeditious" review.
Envisia Therapeutics Inc. (Research Triangle Park, N.C.) said ENV515 met the primary endpoint in a Phase IIa trial to treat glaucoma. The extended-release formulation of travoprost significantly reduced intraocular pressure (IOP) in the dose-ranging study, and was comparable to Travatan Z travoprost from Novartis AG (NYSE:NVS; SIX:NOVN).
The 21-patient study identified a dose group in which a single dose of ENV515 reduced baseline IOP by 28% at day 25 (p<0.001), which was comparable to daily doses of Travatan Z. Envisia spokesperson Michael Parks told BioCentury that all four ENV515 doses evaluated in the study produced a significant reduction in IOP, with the highest dose producing changes comparable to Travatan Z.
The most common adverse event was early onset transient hyperemia. Parks said Envisia plans to start a 12-month study of the candidate this quarter.
Travatan Z is an eye drop formulation of travoprost, a prostaglandin analog that inhibits neovascularization in the eye. Envisia's extended-release formulation of travoprost uses fully biodegradable particle replication in non-wetting templates (PRINT) technology (see BioCentury, July 21, 2014).
The University of Texas MD Anderson Cancer Center (Houston, Texas) and Theraclone Sciences Inc. (Seattle, Wash.) jointly launched cancer immunotherapy company OncoResponse Inc. (Houston, Texas). The newco closed a $9.5 million series A round co-led by Arch Venture Partners; Canaan Partners; and MD Anderson. Rice University and Alexandria Real Estate Equities also participated.
OncoResponse will use Theraclone's I-STAR antibody discovery platform to identify antibodies from exceptional responders to immunotherapy. MD Anderson will provide the company with samples and physiologic, prognostic and genotypic data from exceptional responders.
OncoResponse will focus initially on candidates for melanoma and non-small cell lung, breast and gastric cancers, but also plans to study compounds for other solid tumor indications.
Sarepta Therapeutics Inc. (NASDAQ:SRPT) raised $126.8 million through the sale of 3.3 million shares at $39 in a follow-on underwritten by Credit Suisse; Morgan Stanley; Needham; Oppenheimer; Robert W. Baird; Roth Capital Partners; and William Blair. Sarepta proposed the offering on Monday after market close, when its shares were valued at $41.79. The company lost $3.79 to $38 on Tuesday.
Sarepta's eteplirsen (AVI-4658) is under Priority Review by FDA to treat Duchenne muscular dystrophy (DMD) amenable to exon 51 skipping. The phosphorodiamidate morpholino oligomer (PMO) targeting exon 51 has a PDUFA date of Feb. 26, 2016 (see BioCentury Extra, Oct. 1).
Houlihan Lokey (NYSE: HLI) hired Fedora Baloiu as head of the biopharmaceutical practice in the bank's healthcare group. Previously, Baloiu was an SVP at Goldman Sachs.
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