Eyes on launches
Why buysiders are eyeing sales rather than clinical data in 3Q18
The annual summer slowdown isn’t restricted to just the stock market this year, as the clinical catalyst calendar also appears to be on holiday in 3Q18.
Buysiders are therefore turning their attention to a spate of ongoing or upcoming product launches, with a keen focus on new modalities such as CAR T and gene therapies.
The first half of the year featured numerous clinical showstoppers, such as Incyte Corp.’s Phase III ECHO-301/KEYNOTE-252 trial to treat unresectable or metastatic melanoma.
The study evaluated Incyte’s epacadostat, an indoleamine 2,3-dioxygenase 1 (IDO1) inhibitor, plus Merck & Co. Inc.’s anti-PD-1 mAb Keytruda pembrolizumab vs. Keytruda monotherapy. The trial was stopped after a DMC review showed it had missed the primary endpoint of improving progression-free survival (PFS).
Incyte’s shares have declined 19% since the disclosure, and the result has caused investors to reassess immuno-oncology combinations trials across the board, shaking confidence in several analogous programs.
The second quarter also featured the annual data dumps during the American Association for Cancer Research (AACR) and American Society of Clinical Oncology (ASCO) meetings.
The third quarter promises to be much quieter.
“I don’t see anything binary that could affect the space like IDO,” said Otello Stampacchia of Omega Funds.
All of the 13 buysiders polled by BioCentury agreed, with the downside being that a lack of newsflow could be more acutely felt when volatility inevitably picks up in late summer.
“You hope to have more catalysts for major innovation to balance the drug price discussion that may ramp up around the elections,” said Alex Karnal of Deerfield Management.
While clinical catalysts are light, buysiders have plenty of ongoing and upcoming launches to track, including many by biotechs that have made the leap from clinical- to commercial-stage organizations.
And given the market’s penchant to “short the launch,” strong sales metrics could force short sellers into retreat and amplify stock performance.
Ready to launch
The launch trajectories of new therapeutic modalities and the first approved products by nascent commercial biotechs will take center stage this summer.
Brad Loncar of Loncar Investments is watching for initial sales of Spark Therapeutics Inc.’s Luxturna voretigene neparvovec and the continued uptake of CAR T therapies Kymriah tisagenlecleucel from Novartis AG and Yescarta axicabtagene ciloleucel from Gilead Sciences Inc.
Given the novelty of these technologies, the management teams have guided conservatively early on.
“I want to see