Back to top

Analyst Blog

It was a busy week as well as weekend for the biotech sector. Highlights from last week include the approval of Gilead’s (GILD - Analyst Report) hepatitis C virus (HCV) treatment, Sovaldi, and that of Auxilium’s (AUXL - Analyst Report) Xiaflex (Peyronie’s disease), a collaboration between Celgene (CELG - Analyst Report) and OncoMed (OMED - Snapshot Report) and positive data on Puma Biotechnology’s (PBYI - Snapshot Report) experimental cancer drug.

Meanwhile, with the annual meeting of the American Society of Hematology (ASH) kicking off during the weekend, several companies were in attendance presenting data on their approved as well as experimental drugs.

Sovaldi Approval Ushers in New HCV Treatment Paradigm: Last week, Gilead’s blockbuster hopeful, Sovaldi, was approved in the U.S. for HCV. With approval being largely expected, shares inched up 1.6%. FDA approval of Sovaldi also resulted in Moody's Investors Service revising its rating outlook on Gilead to positive from stable.

Sovaldi is an important product not only for Gilead but also for HCV patients who have postponed treatment as they await the launch of a better therapy. Sovaldi has many factors that should work in its favor – high cure rates, a short treatment period and reduction/elimination of the need for interferon injections. It has the potential to change the treatment paradigm in the HCV market.

Following Sovaldi’s approval, there has been a lot of buzz regarding Gilead’s pricing of the drug. Each pill is priced at $1,000 which means that a 12-week treatment period would cost about $84K. However, the company is providing a copay assistance program.

Given the broad label of the product and the pent-up demand for new treatments, uptake should be rapid despite the pricing. Sovaldi should bring in multi-billion dollar sales for Gilead.

AUXL Jumps on Xiaflex Label Expansion: Auxilium’s shares soared 11.95% with the FDA approving Xiaflex for an additional indication. Xiaflex, which is currently marketed for Dupuytren’s Contracture, gained approval for Peyronie’s disease. Hopefully, approval for the additional indication will boost Xiaflex sales which are yet to pick up significantly.

OncoMed Shoots Up on Celgene Deal: Biotech major Celgene inked a deal with OncoMed for the joint development and commercialization of up to six anti-cancer stem cell candidates from OncoMed's biologics pipeline. OncoMed shares jumped 97.9% on the news. The deal is a major achievement for OncoMed which went public earlier this year in July. Celgene also benefits as it has acquired an anti-cancer stem cell pipeline by investing $177.25 million for now.

I-SPY Positive for Puma: Shares of Puma Biotechnology soared more than 68% on positive top-line results from the phase II I-SPY 2 study on lead pipeline candidate, neratinib. The strong results from the phase II study conducted in breast cancer patients bode well for late-stage studies.

Biogen Dips Slightly on Regulatory Delay: Biogen shares were down 1.3% with the FDA action date for its hemophilia B candidate, Alprolix, being pushed back by three months, which means the company will most likely be able to launch Alprolix later in the first half of 2014 provided it gains approval. This is the second delay being faced by Biogen where its hemophilia pipeline is concerned.

AMBI Plunges on Regulatory Update: Ambit Biosciences’ (AMBI - Snapshot Report) hopes of filing for accelerated approval for its experimental drug for relapsed/refractory acute myeloid leukemia were dashed with the FDA saying that a phase III study on quizartinib will have to be conducted in order to file for approval. Not so good news for Ambit as this will push up costs and push out the potential approval/launch date for the drug. Not surprisingly, shares were down 33.1% on the news.

Company Last Week Last 6 Months
AMGN 0.04% 18.06%
BIIB -0.02% 31.52%
GILD -1.10% 44.09%
CELG 2.88% 44.02%
REGN -3.78% 12.12%
ALXN 0.76% 35.00%
^BTK -1.14% 19.32%

 

 

 

 

 

 

 

Other Developments:

Conatus and Immunomedics Gain on Orphan Drug Status: Shares of Conatus Pharmaceuticals were up 18.1% after the FDA granted Orphan Drug Status to experimental drug, emricasan. Immunomedics got the same designation for its antibody-drug conjugate IMMU-132 for the treatment of small cell lung cancer.

EMA Takes A Closer Look at Iclusig: Ariad’s shares lost 10.9% on news that the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee (PRAC) is conducting a further in-depth review of the risk/benefit profile of leukemia drug Iclusig. Earlier, EU regulators had recommended that Iclusig could remain on the market though tough restrictions would be imposed for continued marketing of the product.

Lexicon Slips on Phase II Data: Lexicon Pharmaceuticals' pipeline candidate, LX1033, failed to achieve statistical significance in the primary endpoint of a phase II study for diarrhea-predominant irritable bowel syndrome (IBS-d). Shares were down 4.7%.

The Week So Far:

ASH Updates: Several biotech companies presented data on approved drugs as well as pipeline candidates at the annual ASH meeting (Dec 7 – 10). Companies that were in the limelight thanks to encouraging data include Celgene, Pharmacyclics (PCYC - Analyst Report) and Geron.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Please login to Zacks.com or register to post a comment.