Tuesday, July 12, 2016

Look back at pharma news to July 8

More than $1 billion was wiped from the market value of biotech groups racing to develop a revolutionary cancer treatment, after one of the companies, Juno Therapeutics, revealed that three young patients had died after receiving its experimental therapy on a clinical trial, reported the UK’s Financial Times.

The US Food and Drug Administration had ordered Juno to suspend the trial of the drug, codenamed JCAR015, after two patients died last week. A third patient died in May, but the company continued the study following discussions with the FDA. Shares in Juno fell almost 32% in New York, wiping about $1.4 billion from the company’s market value, which fell to $3 billion. Shares in Kite Pharma, a rival group, fell almost 7% on fears the FDA could take a broader look at the safety of Car-T and potentially suspend other studies, while Bluebird Bio dipped early before recovering to close flat at $48.75, the FT noted.

“Biotech investors are going to be on pins and needles over the next three or four weeks as the FDA looks into this, and they will be hoping that this is only confined to Juno,” said Brad Loncar, founder of the Cancer Immunotherapy exchange-traded fund, quoted by the FT.

Also commenting, EP Vantage, the editorial arm of the Evaluate group, said Juno Therapeutics seems optimistic that a clinical hold on its lead CAR-T candidate will delay the project rather than scuppering it altogether. This did not stop investors in the group, and other CAR-T companies, getting the jitters. If the safety issue turns out to be a class effect it would not just be the end for JCAR015 but also the hot area of CAR-T and its major players Juno and Kite Pharma, as well as being a setback for the likes of Novartis and Celgene, which have placed big bets in this space. Juno was down 32% in early trading today, and all these groups and their shareholders will be watching the story with JCAR015 unfold.

Xbiotech’s Xilonix shows promise

Xilonix, Xbiotech's lead product candidate, demonstrated significant clinical benefit in last-line treatment of patients with advanced colorectal cancer with a notable lack of toxicity. Xilonix showed 26% less severe adverse events versus placebo, which boosts Xilonix' potential beyond its current sole competitor regorafenib (Stivarga) from Germany’s Bayer. Regorafenib is projected to have peak sales of 1 billion, although the tolerability of regorafenib has been put into question in several publications, noted BioWizard writing on the Seeking Alpha blog.

Xbiotech recently received an accelerated review for its marketing authorization application for Xilonix by the European Medicines Agency. A decision on the marketing authorization is expected in fourth-quarter 2016. The study protocol was designed in close collaboration with the EMA and the EMA has accepted Lean Body Mass (LBM) gain plus Quality of Life (QoL) score as primary endpoints for this novel cancer agent.

Given these findings from the European study, enrollment for the Fast-Tracked FDA Phase III study of Xilonix for the treatment patients with metastatic colorectal cancer should accelerate, where Overall Survival is the primary endpoint. According to Xbiotech's most recent business update first-quarter 2016, enrollment should be completed in fourth-quarter 2016, BioWizard said.

In agreeing to purchase Transition Therapeutics in a $60 million transaction, OPKO Health is obtaining important drugs in development for the treatment of several diseases and disorders, including diabetes and obesity, noted Gene Marcial writing in Forbes magazine.

Transition Therapeutics has two lead drugs under development: TT401, a clinically advanced drug candidate from a new class of GLP1-glucagon receptor agonists, and TT701, a once-daily oral selective androgen receptor modular for androgen deficiency. TT401, in a recently completed Phase II study of patients with type-2 diabetes, achieved significant weight loss when compared to existing treatments. OPKO believes the TT401 is a compelling complement to its existing oxyntomodulin candidate, MOD-6031, Mr Marcial noted. And TT701, in a recent study of 350 male paints, achieved a dramatic decrease in fat mass and a corresponding increase in lean body mass and muscle strength. Moreover, these results were achieved without a marked change in prostate specific antigen (PSA) levels. A third asset in the acquired Transition Therapeutics portfolio is ELNDOO5, a neuropsychiatric drug that has completed Phase II clinical studies in Alzheimer disease and Down syndrome patients.

Bristol-Myers picks up asset missed in previous Medarex buy

When Bristol-Myers Squibb pulled off what looks to be the deal of the last decade when it bought Medarex for $2.4 billion to access the technology that produced Opdivo and Yervoy, it is interesting that it did not apparently see that another asset, now called HuMAX-IL8, might be worth up to $520 million, noted EP Vantage.

Through a series of transactions that antibody ended up with the private Swedish group Cormorant Pharmaceuticals, which fell to Bristol-Myers last week for $9 5 million up front. After passing through Genmab’s hands, the immune-activating agent has been steered away from inflammatory disease and into a solid tumor trial at the US National Cancer Institute (NCI).

Gilead Sciences announced that its latest combination hepatitis C treatment Epclusa has been approved by the European Commission. Maxim’s Jason Kolber and Jason McCarthy contend that this is just another reason Gilead will remain dominant in hepatitis C: With the US and EU approval of Epclusa, they continue to see Gilead maintaining its dominant position in the HCV space, saying: “We expect to see Epclusa start cannibalizing revenues from Harvoni and Solvaldi, and bringing incremental gains to Gilead’s HCV franchise.”

According to Ben Levisohn, writing on Stocks to Watch, said “this drives the key question: Where does Gilead go from here? Fundamentally, the company drove free cash flow of more than $4 billion in the first quarter, allowing it to be opportunistic, pay dividends, and make share repurchases. We still believe in Gilead and its long-term potential; however, in the short term, we see a period of consolidation in the stock.”

After two months of increasingly acrimonious correspondence between Sanofi and its intended acquisition target, Medivation, peace broke out last week. What the markets now have to decide is whether this makes a deal more likely or not, commented EP Vantage.

While Medivation stresses that it has signed confidentiality agreements with a “number of parties,” hinting at a bidding war, Sanofi wants the markets to believe that a deal can be done at a new, higher bid of $58 per share plus a $3 contingent value right. Next comes a protracted process where Sanofi pretends not to be desperate to buy, and Medivation stresses that it is in no hurry to sell. Celegene and Pfizer have been confirmed as potential bidders, and over the weekend, AstraZeneca has been rumored as a likely entrant into the fray.

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