A deep line-up of milestones
could help retain gains the sector has been holding onto since 1Q12. In
particular, investors would love to see further breakthroughs in difficult
areas such as Alzheimer's disease and obesity.
Top of mind for almost every
specialist investor are Phase III data in Alzheimer's disease that are due this
quarter - even though none of these buysiders expect the data to be positive.
Bapineuzumab is a humanized mAb against beta amyloid from Johnson
& Johnson and Pfizer
Inc. that originated at Elan
Corp. plc. Eli
Lilly and Co.'s solanezumab (LY2062430) is an antibody that binds
soluble beta amyloid.
"It's fair to say the
expectations are not very high," said LSP-Life Sciences Partners' Joep
Muijrers. "If something hits there, it could have a spillover effect to
the rest of the sector, but that goes against what most people are expecting."
If bapineuzumab misses,
International Biotechnology Trusts' David Pinniger expects Elan to fall to $9
or $10 per share. "But if this does work, it would be the biggest news on
a biotech product for decades. It would be a $5-$10 billion product, with Elan
getting 25% plus mid-single digit royalties," he said. "It could
generate a lot of positive noise for the sector."
Pharmaceuticals Inc. last week scored a long-awaited approval of its
Belviq lorcaserin to treat obesity. The stock was up 220% going into the PDUFA
date, after an FDA committee voted in favor of approval for the serotonin
(5-HT2C) receptor agonist. Last week, Arena shares added only 1%.
Investors took the news as a good sign for Qnexa
phentermine/topiramate from Vivus
Inc., sending the shares up 8% last week.
"We're pretty squarely in
the camp for Vivus," said Behzad Aghazadeh of venBio. Compared with Arena,
"it feels like there's been more dialog with FDA, and it has best-in-class
In April, FDA delayed the Qnexa
PDUFA date by three months to July 17 to review the company's updated REMS. The
candidate had a positive FDA committee vote in February.
Big caps make good
Among the big cap biotechs with milestones this half,
investors highlighted Gilead
Sciences Inc., Biogen
Idec Inc. and Celgene
In 4Q, Gilead is
expecting additional data on an HCV combination that could help justify its
$11.2 billion acquisition of Pharmasset Inc. in January.
In April, Gilead added more than $4 billion to its market cap
after reporting positive Phase IIa data for Pharmasset's nucleotide analog HCV
NS5B polymerase inhibitor GS-7977 paired with the selective HCV NS5A protein
inhibitor daclatasvir from Bristol-Myers
Squibb Co. While another study for this combo is slated to report in
4Q12, the companies are expected to part ways and pursue their own cocktails (see
BioCentury, April 23).
Gilead also has an Aug. 27
PDUFA date for its Quad HIV treatment, which combines elvitegravir, cobicistat,
emtricitabine and tenofovir.
For Biogen Idec, a
long-anticipated approval of BG-12 for multiple sclerosis (MS) could come by
year end, based on a February submission and a standard 10-month review at FDA.
The oral dimethyl fumarate that activates the nuclear factor (erythroid-derived
2)-like 2 (NFE2L2; NRF2) pathway is under review in the U.S. and in Europe.
Next half, Biogen Idec also
will have Phase III data for dexpramipexole to treat amyotrophic lateral
sclerosis (ALS), as well as for two long-acting hemophilia products (see "Revving
the Engine," A20).
"We have had a lot of
positive data from Biogen Idec for BG-12," noted Stefan Kraft of Medical
Strategy. "It's already appreciated relatively well by the markets."
Celgene, meanwhile, shed more
than 17% of its value last quarter on the withdrawal of a European application
to expand the label of multiple myeloma (MM) drug Revlimid lenalidomide. But
the company has several milestones through year end that might help it regain
favor, according to buysiders.
This half, Celgene expects data
from a Phase III trial of Revlimid to treat relapsed and refractory mantle cell
lymphoma (MCL). Other Phase III milestones include pomalidomide to treat
myelofibrosis by year end; Abraxane nab-paclitaxel in treatment-naïve
metastatic melanoma early this quarter and in advanced metastatic pancreatic
cancer late this year or early next; and apremilast to treat psoriatic
arthritis this summer, and to treat psoriasis late this year or early next.
Abraxane nab-paclitaxel also
has an Oct. 12 PDUFA date for first-line treatment of advance non-small
cell lung cancer (NSCLC).
Minding the middle
Among the larger mid-caps, buysiders had about a dozen picks,
including known or rumored acquisition targets Amylin
Pharmaceuticals Inc., Human
Genome Sciences Inc. and BioMarin
Pharmaceutical Inc. (see "Magic in Mid-Caps," A29).
Bristol-Myers proved some investors correct when it announced
late Friday an agreement to acquire Amylin for $31 per share in cash, which
will come out to an aggregate price of about $5.3 billion after the two-step
deal, which also involves AstraZeneca
Investors anticipate a deal for
HGS by year end. If this doesn't come through, one buysider expects its share
price would fall below $10.
HGS finished last quarter at
Pharmaceuticals Inc. gained more than 40% in June on the vote by FDA's
Oncologic Drugs Advisory Committee in favor of Kyprolis carfilzomib to treat
relapsed and refractory multiple myeloma. The July 27 PDUFA date could be an
occasion for another leg up. In addition, this half it will have Phase III data
for Nexavar sorafenib to treat metastatic thyroid cancer.
Prostate cancer favorite Medivation
Inc. could also see a PDUFA date this year for enzalutamide (formerly
MDV3100) to treat castration-resistant prostate cancer (CRPC) in patients
previously treated with docetaxel.
It submitted an NDA to FDA on
May 22 and requested Priority Review. If granted, the PDUFA date would be in
November. The compound has Fast Track designation.
"The data have been very
good," said Kraft. "The probability that it's approved in metastatic
prostate cancer is relatively high."
He added enzalutamide could
have an advantage over J&J's Zytiga abiraterone, because Zytiga is given
with steroids, and trials suggest enzalutamide could be used without them.
"We see the product
reaching peak sales of about $3 billion," said Kraft. "If it could reach
that level or higher, then a higher valuation would be achievable. There's not
much room left, but there's still some potential."
Robert Hodgson of Lenus Capital
Partners cautioned that the prostate cancer frenzy might be overblown, because
he thinks watchful waiting will continue to be the best option for many elderly
patients with slow-moving disease.
Another PDUFA date is coming in September for linaclotide from
Laboratories Inc. and partner Ironwood
Pharmaceuticals Inc. to treat chronic constipation and irritable bowel
syndrome with constipation (IBS-C). The original June date was extended by
Muijrers said, "Linaclotide
is one of the big ones for the industry; this could be a big asset."
Two more PDUFA dates are teed up for Amarin
Corp. plc and United
Therapeutics Corp. The former has a July 26 PDUFA date for AMR101 to
treat hypertriglyceridemia, while the latter has an Oct. 27 PDUFA date for
UT-15C oral treprostinil to treat pulmonary arterial hypertension (PAH).
Amarin shares have more than
doubled this year on IP news, and the Street last week added 11% on positive
remarks from the U.S. Patent and Trademark Office about three patents for
Investor Muijrers thinks AMR101
has "a pretty fair chance" of FDA approval and that the biotech is
taking the right steps on IP.
The ethyl ester of
eicosapentaenoic acid (ethyl-EPA) is a purified omega-3 fatty acid derived from
fish oil. Omega-3 products are available as nutritional supplements but are not
concentrated to a comparable degree.
"The office actions
announced are another big step forward, assuming they result in patent
approvals. Amarin has really lived up to its promise to make every possible
effort to strengthen the IP estate around AMR101, and those efforts seem to be
paying off significantly," Muijrers said.
Pinniger was more skeptical. He
likes AMR101's data but thinks the "barriers to entry are really, really
low" for potential competitors.
Kraft noted that an approval for tofacitinib, an oral
pan-Janus kinase (JAK) inhibitor from Pfizer, could be good news for biotechs
with JAK inhibitors, such as Incyte
Corp. and small cap YM
Incyte's Jakafi ruxolitinib was
approved in November to treat myelofibrosis. The biotech said the oral JAK-1
and JAK-2 inhibitor was the first of its class approved. YM's CYT387 hits the
same targets and is in Phase II testing for the same indication.
Tofacitinib is under review for
rheumatoid arthritis (RA), with an August PDUFA date. The compound had a
favorable FDA committee vote in May.
Also in the RA space, AstraZeneca will report the first Phase
III data for a spleen tyrosine kinase (SYK) inhibitor, fostamatinib (R788), in
1H13. The compound comes from Rigel
"It will show how SYK
inhibitors compare to JAK inhibitors and whether they potentially have fewer
side effects," Kraft noted.
Among the European mid-caps, ThromboGenics
N.V. has a July 26 FDA panel meeting for its ocriplasmin intravitreal
injection to treat symptomatic vitreomacular adhesion.
"This will no doubt be
closely watched here in the Benelux," said Muijrers. "They struck a
very good deal a few months ago. That company has really managed to develop
that asset in that indication in a very nice way."
In March, ThromboGenics partnered ocriplasmin with Novartis
AG. It received €75
million ($98.4 million) up front and is eligible for €90 million ($118 million) in near-term milestones, plus
royalties. ThromboGenics said additional milestone payments would bring the
total upfront and milestone value to up to €375
million ($491.8 million).
A pair of lipid-lowering agents have PDUFA dates around year
end. Dec. 29 is the PDUFA date for small cap Aegerion
Pharmaceuticals Inc.'s lomitapide to treat homozygous familial
hypercholesterolemia (hoFH). The compound is a small molecule microsomal
triglyceride transfer protein (MTP) inhibitor.
Pharmaceuticals Inc. has a Jan. 29 decision date for its Kynamro
mipomersen to treat hoFH. The second-generation antisense inhibitor of
apolipoprotein B-100 (APOB-100) mRNA is partnered with Genzyme
Corp., a unit of Sanofi
Small cap sentiment
Among small caps, investors are
awaiting cancer and HCV milestones. They also see some bargains among European
In 4Q, Clovis
Oncology Inc. and partner Clavis
Pharma ASA will have top-line Phase II data on overall survival for
CO-101 to treat newly diagnosed, advanced pancreatic cancer. The compound is a
lipid-conjugated form of gemcitabine which, unlike gemcitabine itself, does not
depend on the transporter protein ENT1 (solute carrier family 29 nucleoside
transporter member 1; SLC29A1) to enter cells.
"We don't have anything
other than gemcitabine in this indication," Aghazadeh noted. "The
potential market is enormous compared to the current valuation."
Also in advanced pancreatic cancer, Threshold
Pharmaceuticals Inc. will have Phase IIb data on OS this half for
TH-302. It reported positive progression-free survival (PFS) data in February
The compound is a hypoxia-activated cytotoxic 2-nitroimidazole
prodrug of the DNA alkylator bromoisophosphoramide mustard. It is partnered
Oncology Inc. will have Phase III data for ZIO-201 to treat advanced
sarcomas, and Wilex AG
will have Phase III data for Rencarex girentuximab to treat clear cell renal
cell carcinoma (RCC). The former is a stabilized formulation of the active
metabolite of ifosfamide, and the latter is a chimeric mAb against carbonic
anhydrase IX (CAIX).
HCV continues to play out as a
theme for investors, but not because of data.
"We are big believers in Idenix
and to some extent Achillion for IP reasons. I wouldn't be shocked to
see further business development activity," said Aghazadeh.
Bailard's Selena Chaisson also
said she thinks acquisitions or partnerships will continue.
Muijrers added Medivir
AB to the HCV biotech roster. "We haven't given up on protease
inhibition. At the beginning of the year, a lot of data was coming out on an
NS5A with a nuc, so quite a few people may have given up on second-generation
Medivir and partner Johnson
& Johnson will report top-line data from three Phase III trials in 4Q12 for
TMC435, which is an HCV NS3/4A protease inhibitor.
Muijrers also had a handful of
small cap European picks.
He noted antibody play MorphoSys
AG will have Phase Ib/IIa data this quarter for its most advanced
proprietary program, MOR103 to treat RA.
He also likes Galapagos
N.V., which granted Abbott
Laboratories an option in February to develop GLPG0634, a JAK-1
inhibitor in Phase II testing for RA.
Galapagos got $150 million up
front. If Phase II RA studies meet agreed-upon criteria, Abbott will license
the program for a further $200 million. Galapagos, which retains co-promotion
rights in Benelux, is eligible for up to $1 billion in additional milestones, plus
tiered, double-digit royalties. Galapagos expects to deliver the Phase II data
package to Abbott in 2014.
was Muijrers' final European small cap pick. He noted the company's shares have
eroded along with broader European sentiment. The biotech focuses on discovery
and development work almost exclusively for partners, so the risk isn't quite
as binary as it is for a typical small cap, he said.
Its most advanced project is DiaPep277, which is in Phase III
testing to treat Type I diabetes. Andromeda Biotech Ltd. gained rights to
DiaPep277 in 2007 from DeveloGen AG, which was acquired by Evotec in 2010.
Andromeda is a subsidiary of Clal
Biotechnology Industries Ltd.
"Small- and mid-caps are
so cheap in Europe, for us this creates opportunity," he said.
Laboratories (NYSE:ABT), Abbott Park, Ill.
Pharmaceuticals Inc. (NASDAQ:ACHN), New Haven, Conn.
Pharmaceuticals Inc. (NASDAQ:AEGR), Cambridge, Mass.
Corp. plc (NASDAQ:AMRN), Dublin, Ireland
Pharmaceuticals Inc. (NASDAQ:AMLN), San Diego, Calif.
Pharmaceuticals Inc. (NASDAQ:ARNA), San Diego, Calif.
plc (LSE:AZN; NYSE:AZN), London, U.K.
Idec Inc. (NASDAQ:BIIB), Weston, Mass.
Pharmaceutical Inc. (NASDAQ:BMRN), Novato, Calif.
Squibb Co. (NYSE:BMY), New York, N.Y.
Corp. (NASDAQ:CELG), Summit, N.J.
Biotechnology Industries Ltd. (Tel Aviv:CBI), Tel Aviv, Israel
Pharma ASA (OSE:CLAVIS), Oslo, Norway
Oncology Inc. (NASDAQ:CLVS), Boulder, Colo.
Corp. plc (NYSE:ELN), Dublin, Ireland
Lilly and Co. (NYSE:LLY), Indianapolis, Ind.
(Xetra:EVT), Hamburg, Germany
Laboratories Inc. (NYSE:FRX), New York, N.Y.
N.V. (Euronext:GLPG; Pink:GLPYY), Mechelen, Belgium
Corp., Cambridge, Mass.
Sciences Inc. (NASDAQ:GILD), Foster City, Calif.
Genome Sciences Inc. (NASDAQ:HGSI), Rockville, Md.
Corp. (NASDAQ:INCY), Wilmington, Del.
Pharmaceuticals Inc. (NASDAQ:IDIX), Cambridge, Mass.
Pharmaceuticals Inc. (NASDAQ:IRWD), Cambridge, Mass.
Pharmaceuticals Inc. (NASDAQ:ISIS), Carlsbad, Calif.
& Johnson (NYSE:JNJ), New Brunswick, N.J.
Inc. (NASDAQ:MDVN), San Francisco, Calif.
AB (SSE:MVIR B), Huddinge, Sweden
KGaA (Xetra:MRK), Darmstadt, Germany
AG (Xetra:MOR; Pink:MPSYF), Martinsried, Germany
AG (NYSE:NVS; SIX:NOVN), Basel, Switzerland
Pharmaceuticals Inc. (NASDAQ:ONXX), South San Francisco, Calif.
Inc. (NYSE:PFE), New York, N.Y.
Pharmaceuticals Inc. (NASDAQ:RIGL), South San Francisco, Calif.
(Euronext:SAN; NYSE:SNY), Paris, France
Pharmaceuticals Inc. (NASDAQ:THLD), South San Francisco, Calif.
N.V. (Euronext:THR), Leuven, Belgium
Therapeutics Corp. (NASDAQ:UTHR), Silver Spring, Md.
Inc. (NASDAQ:VVUS), Mountain View, Calif.
(Xetra:WL6), Munich, Germany
BioSciences Inc. (TSX:YM; NYSE-M:YMI), Mississauga, Ontario
Oncology Inc. (NASDAQ:ZIOP), New York, N.Y.