3Q Financial Markets Preview: Miles of milestones
2H12 has at least 117 major clinical, regulatory events for biotech
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."
Arena 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%.
"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 efficacy."
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
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).
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.