Rethinking risk

Investors' top names and milestones in 3Q16

The second half does not contain the high-impact, sector-moving milestones seen in the first six months of the year, but investors still have at least 90 late-stage milestones from which to choose before 2016 draws to a close.

Some buysiders are looking for companies that already have turned over their data cards in hopes of finding de-risked names. The goal is to own launch stories or companies with a regulatory milestone that is likely to be positive.

Other investors are wading through novel mechanisms and unmet needs in search of upside in the Phase II and III spaces.

Big swings

The biggest events came in June, when Biogen Inc. reported Phase II results for opicinumab (BIIB033) to treat relapsing forms of multiple sclerosis and Merck & Co. Inc. disclosed Phase III results for its Keytruda pembrolizumab as first-line therapy for patients with metastatic non-small cell lung cancer (NSCLC) with high expression of PD-L1.

Biogen's mAb against leucine-rich repeat neuronal protein 1 (LINGO-1) missed the primary endpoint, while Merck's PD-1 inhibitor met.

"The lung data from Merck were a big deal," said Brad Loncar of the Loncar Fund. "You've officially made it when you're front line in a disease like lung cancer. As much as we've been talking about PD-1s for the last few years it would have been a huge disappointment if it missed."

Merck said it plans to present detailed data at a medical meeting this year, and to share the data with regulators as soon as possible.

Biogen said it will use the Phase II data to inform the design of its next study. The company plans to report detailed data from the opicinumab trial at the September congress of the European Committee for Treatment and Research in Multiple Sclerosis.


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