Your Daily Pharma Scoop: Biogen Setback, Ironwood Commences Trial, Vtv Signs 2 Deals


Analysis of top Seeking Alpha coverage: Biogen

Today we will focus on Biogens (BIIB) announcement regarding BAN2401, the companys Alzheimers candidate in mid-stage study.

Biogen shares dropped more than 3% on Thursday after the company said that an Independent Data Monitoring Committee determined that the Phase 2 study evaluating BAN2401 in patients with early or mild Alzheimers disease (AD) failed to meet the criteria for success at the end of 12 months. The drug is being co-developed with Eisai.

The news highlights the major concern we have had with Biogen. Two years ago, the company announced a restructuring and shifted its focus towards neurology, with Alzheimers being a key area. But the high failure rate of Alzheimers drugs makes this a very risky strategy. It must be noted that the failure of BAN2401 has no bearing on Biogens lead candidate in AD, aducanumab. The companys lead Alzheimers candidate has a different mechanism of action. However, the effectiveness of aducanumab is still to be tested in a large population. And given the high failure rate with Alzheimers candidate, we are cautious on Biogen.


Another concern, which has been addressed partly, is Biogens multiple sclerosis (MS) franchise. We have already discussed the issues with the MS space in several articles, which can be found here, here and here. To briefly recap though, the MS space has become extremely crowded and faces generic competition. The approval of Copaxone 40 mg generic means that there is now already a generic in the MS market. And it comes at a time when major MS players have already been under the scanner for pricing MS drugs. Remember that much of the sales growth in the MS space in recent years has been achieved through price increases rather than volume growth.


Coming back to Biogens MS franchise, the approval of generic Copaxone does put pressure on pricing although BIIBs Tecfidera, the biggest MS drug in the franchise, is an oral therapy. But Tecfidera has problems of its own, although none of it immediate. As we noted in earlier articles, the oral MS therapy space faces potential generic competition from 2020 onwards if patents on Novartis (NVS) MS drug Gilenya are invalidated. If the patents are invalidated, then generics could knock off a significant portion of Tecfidera sales. The problem for Biogen is that its MS pipeline is extremely thin, with not much to offset the loss of these sales.


Biogen has addressed a more immediate problem, the threat to Tecfidera from ALKS 8700. The company recently signed a global licensing agreement for ALKS 8700, which potentially has a better safety and tolerability profile compared to Tecfidera. But the licensing agreement is more of an insurance than an aggressive deal. It must be noted that the deal has been signed on favorable terms but it does not add much to Biogens MS franchise.

While Thursdays development is not a major setback for Biogen, we remain cautious on the stock because of the overreliance on aducanumabs success. We continue to see Gilead (GILD) and Celgene (CELG) as more favorable bets in the large cap biopharma space.


Stocks in the news: Analysis of BLRX, SMMT, IRWD, CELG

BioLineRx (BLRX) announced that it has commenced a Phase 3 clinical trial, GENESIS, to evaluate L-8040 for the mobilization of hematopoietic stem cells for autologous transplantation in multiple myeloma patients.

Co Name

BioLineRx

Ticker

BLRX

Focus Area

clinical-stage therapeutics to address unmet needs

Price (last close)

$1.12


52-week high

$1.38

52-week low

$0.80

Diff. from 52-week low

40%

Market Cap

118.08M

Enterprise Value

61.88M

Cash (mrq)

55.01M

Debt (mrq)

273K

Analysis: The Phase 3 study will compare the combination of BL-8040 and granulocyte colony-stimulating factor (G-CSF) to placebo plus G-CSF in ~180 subjects. The primary endpoint will be the proportion of patients who mobilize a minimum number of CD34+ cells [6.0 x 10 (6)] with up the two apheresis sessions after a single administration of BL-8040 and G-CSF. The estimated trial completion date is September 2019.


Summit Therapeutics (SMMT) announced that it signed an exclusive license and commercialisation agreement granting Eurofarma Laborat贸rios SA rights in Latin America to ridinilazole, currently in development for the treatment of Clostridium difficile infection (CDI).

Co Name

Summit Therapeutics

Ticker

SMMT

Focus Area

genetic and infectious diseases

Price (last close)

$10.58


52-week high

$16.86

52-week low

$7.95

Diff. from 52-week low

33.08%

Market Cap

148.6M

Enterprise Value

85.87M

Cash (mrq)

42.37M

Debt (mrq)

n/a

Analysis: According to the terms of the agreement, Summit will receive an upfront payment of $2.5 million. The company is also entitled milestone payments of up to $25 million. As part of the agreement, Summit will also receive product supply transfer payments in high single digit to low double-digit percentage of net sales.


Ironwood (IRWD) announced that it has commenced a Phase 2 trial, STRONG-SCD, evaluating IW-1701 in patients with sickle cell disease (SCD).

Co Name

Ironwood Pharmaceuticals, Inc.

Ticker

IRWD

Focus Area

Therapeutics, IBS

Price (last close)

$15.85

52-week high

$19.94

52-week low

$13.43


Diff. from 52-week low

18.02%

Market Cap

2.37B

Enterprise Value

2.55B

Cash (mrq)

225.42M

Debt (mrq)

396.34M

Analysis: This will be a randomized, placebo-controlled study. The company plans to enroll 88 subjects in the study, who will remain on their current treatment regimens for the duration of the trial. The primary endpoint of the trial is safety and tolerability. Secondary outcome measures include efficacy. The estimated trial completion date is July 2019.


Celgene (CELG) announced that a Phase 3 trial evaluating its REVLIMID (lenalidomide) plus Biogen’s (BIIB) RITUXAN (rituximab) in treatment-naive follicular lymphoma (FL) patients failed to demonstrate a treatment benefit over standard-of-care (SOC) therapy.

Co Name

Celgene Corporation

Ticker

CELG

Focus Area

cancer and inflammatory diseases

Price (last close)

$107.88


52-week high

$147.17

52-week low

$94.55

Diff. from 52-week low

14.1%

Market Cap

84.94B

Enterprise Value

87.56B

Cash (mrq)

11.79B

Debt (mrq)

14.28B

Analysis: The Phase 3 study, RELEVANCE, evaluated REVLIMID/RITUXAN (RxR) followed by RxR maintenance compared to REVLIMID plus chemotherapy (R-CHOP or R-CVP). The RxR arm failed failed to show statistically valid superiority over SOC as determined by complete response at week 120 or progression-free survival. The news has sent CELG shares down, but we would not read too much into it. It has been a difficult year for CELG but we remain positive on the long-term prospects.


In other news

vTv Therapeutics (VTVT) announced that it has signed a license agreement with Huadong Medicine’s Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. granting it exclusive rights to develop, manufacture and commercialize vTv’s GLP-1R agonist program in China, Hong Kong and 12 other Asian countries (ex. Japan). The company has also signed an agreement with Reneo Pharmaceuticals under which Reneo has secured exclusive global rights to vTvs selective peroxisome proliferator-activated receptor delta (PPAR-delta) program. As part of the deal, vTv will receive an upfront payment, milestones and royalties on net sales. The financial terms of the deal though have not been made public.


Gemphire Therapeutics (GEMP) announced that it launched a clinical program to develop emcabene as a treatment for NASH/nonalcoholic fatty liver disease (NAFLD).

Johnson & Johnsons (JNJ) subsidiary Janssen announced that the FDA has granted its apalutamide, a next-generation oral androgen receptor inhibitor, for Priority Review for the treatment of non-metastatic castration-resistant prostate cancer.

Biohaven (BHVN) announced that it has commenced enrollment in its Phase 2/3 trial evaluating the efficacy and safety of trigriluzole in patients with obsessive-compulsive disorder (OCD).


Jazz Pharmaceuticals (JAZZ) announced that it has filed U.S. marketing application for its Orphan Drug-designated olriamfetol (JZP-110) for the treatment of excessive sleepiness in adult patients with narcolepsy or obstructive sleep apnea.

Acasti Pharma (ACST) announced public offering of 9.9 million shares of common stock and accompanying warrants to purchase up to 8.9 million shares of common stock for $1.01 per share and warrant. Net proceeds from the offering will help fund the continued development of CaPre, expansion of business development activities, working capital and general corporate purposes.


Analyst Ratings

Company

Analyst

Action

Rating

Target

Avisol Analysis

ABIOMED (ABMD)

Jefferies Group

Raises Target

Buy

$208.00 -> $220.00

AEterna Zentaris (AEZS)

Maxim Group

Set Price Target

Buy

$4.00

Yes


Axovant Sciences (AXON)

Jefferies Group

Downgrades

Buy -> Hold

$6.00

Yes

Biogen (BIIB)

Mizuho

Set Price Target

Buy

$400.00

Yes

Bioline RX (BLRX)

HC Wainwright

Set Price Target

Buy

$4.00

Bioline RX (BLRX)


Oppenheimer

Initiates

Buy

$3.00

bluebird bio (BLUE)

CIBC

Initiates

Market Perform -> Market Perform

Yes

Catalyst Pharmaceuticals (CPRX)

HC Wainwright

Reiterates

Buy

$6.00

Crispr Therapeutics (CRSP)

Oppenheimer

Reiterates


Hold

Cardiovascular Systems (CSII)

William Blair

Initiates

Hold

Exelixis (EXEL)

SunTrust Banks

Reiterates

Buy

$38.00

Yes

Gilead Sciences (GILD)

Oppenheimer

Reiterates

Hold

Yes

Intercept Pharmaceuticals (ICPT)


Citigroup

Set Price Target

Hold

$74.00

Yes

Invacare (IVC)

KeyCorp

Reiterates

Buy

$20.00

La Jolla Pharmaceutical (LJPC)

HC Wainwright

Initiates

Buy -> Buy

$62.00

Medtronic (MDT)

Oppenheimer

Reiterates


Buy

MEI Pharma (MEIP)

Cann

Reiterates

Buy

$6.50

MEI Pharma (MEIP)

Oppenheimer

Set Price Target

Buy

$7.00

Mirati Therapeutics (MRTX)

Cowen

Initiates

Outperform

Aratana Therapeutics (PETX)


HC Wainwright

Set Price Target

Buy

$10.00

Yes

Rigel Pharmaceuticals (RIGL)

Piper Jaffray Companies

Reiterates

Overweight -> Overweight

$6.00

Soligenix (SNGX)

Maxim Group

Set Price Target

Buy

$5.00

Syros Pharmaceuticals (SYRS)


HC Wainwright

Reiterates

Hold

$10.00

Verastem (VSTM)

Oppenheimer

Set Price Target

Buy

$13.00

GILD is in Avisol portfolio.

Insider Sales

Adamas Pharmaceuticals Inc (ADMS): CBO, GC, Compliance Officer Rhodes Jennifer J disposed 440 shares for $14,212.

Concert Pharmaceuticals, Inc. (CNCE): 10% shareholders Bvf Partners disposed 1282856 shares (91% of their holding) for $34,188,112.


Illumina Inc (ILMN): Director Flatley Jay T disposed 20000 shares for $4,309,502.

Ligand Pharmaceuticals Inc (LGND): Director Sabba Stephen L disposed 925 shares for $126,956.

Regenxbio Inc. (RGNX): President & CEO Mills Kenneth T disposed 10000 shares for $317,500.

Insider Acquisitions

Marijuana Co of America, Inc. (OTCPK:MCOA): President & 10% shareholder Steinberg Donald J acquired 6700000 shares for $252,656.

Mannkind Corp (MNKD): Corp VP, Chief People Officer Tross Stuart A acquired 39840 shares for $100,397.

Secondary Offerings


Company

Stock Offering

Price Offering

Vistagen Therapeutics (NASDAQ:VTGN)

$15 Million

$1.25/Share

Fennec Pharmaceuticals Inc. (NASDAQ:FENC)

$20 Million

$8.50/Share

Fibrocell Science Inc. (NASDAQ:FCSC)

$5.9 Million

$0.77/Share


Viking Therapeutics Inc. (NASDAQ:VKTX)

$12.8 Million

$2.50/Share

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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