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Last week turned out to be pretty eventful with Epizyme (EPZM - Snapshot Report) and Pharmacyclics (PCYC) shares soaring. But, the clear winner was Intercept Pharmaceuticals (ICPT) which saw its shares gaining an impressive 281%.

Intercept Shares Skyrocket on Data: Intercept stood out last week with its shares skyrocketing 281% when a Data Safety Monitoring Board halted a mid-stage study being conducted with obeticholic acid (OCA). OCA is being evaluated in the FLINT study for the treatment of nonalcoholic steatohepatitis (NASH) - a serious chronic liver disease caused by excessive fat accumulation in the liver.

The study was stopped as the primary endpoint was met. Usually, studies are stopped prematurely due to safety signals or some other negative event. So the halting of a study due to positive data is always welcome news and a major positive. With no drugs currently approved for NASH, Intercept is well placed to rule the market once OCA is approved.

About 12% of adults in the U.S. are estimated to have NASH with 2.7% (more than 6 million) having progressed to advanced liver disease or cirrhosis due to NASH. Not just that, the number of liver transplants due to NASH has also gone up significantly in the last few years. So, we could very well be looking at a candidate with blockbuster potential.

Epizyme Shares Shoot Up: Epizyme shares shot up 75.6% with the company achieving a proof-of-concept milestone related to the development of EPZ-5676. This means that Epizyme will get a $25 million milestone payment from partner, Celgene (CELG - Analyst Report).

The company will also get a $4 million milestone payment under its agreement with Glaxo regarding small molecule HMT inhibitors. Epizyme now expects to exit 2013 with a cash balance of $145 million, significantly above the earlier forecast of $115 million.

Fast Track Status for Peregrine’s Bavituximab: Peregrine Pharma's shares gained 14.5% on news that the FDA has granted fast-track status to its lead pipeline candidate, bavituximab, for second-line non-small cell lung cancer. Bavituximab was recently moved into a phase III study (SUNRISE - Stimulating ImmUne RespoNse thRough BavItuximab in a PhaSE III Lung Cancer).

Fast-track designation means the development and review process could be speedier with more frequent and timely communication and meetings with the FDA. The candidate could also be granted priority review.

PCYC’s Imbruvica Continues to Impress: Intercept was not the only company to receive a favorable recommendation from a data monitoring committee last week. An Independent Data Monitoring Committee unanimously recommended that the phase III RESONATE study being conducted on Pharmacyclic’s leukemia drug, Imbruvica should be stopped early. The company saw its shares gaining 19.8%.

This is a very positive development for the company as the study met its primary and a key secondary goal. Imbruvica is another drug with blockbuster potential.

Sangamo Soars on Biogen Deal: Sangamo shares shot up 38.3% on the company’s collaboration with Biogen for the development of treatments for hemoglobinopathies, which are genetic disorders resulting from the abnormal structure or underproduction of hemoglobin. This deal not only provides Sangamo with a strong partner in the form of Biogen, Sangamo also stands to receive an upfront payment of $20 million and more than $300 million on the achievement of milestones.

Biogen will also reimburse Sangamo for its internal and external R&D costs. All in all, a good deal for Sangamo.

 

Company Last Week Last 6 Months
AMGN 3.08% 16.60%
BIIB 7.90% 36.24%
GILD  0.74% 35.32%
CELG 0.00% 35.76%
REGN 0.97% 15.92%
ALXN 2.65% 35.05%
^BTK 6.49% 20.07%

 

Other Developments:

Will it be Third Time Lucky for OREX Drug? The FDA issued an action date for Orexigen’s (OREX - Analyst Report) obesity candidate, Contrave. The agency will act on the company’s regulatory submission by Jun 10. Will it prove to be third time lucky for Contrave? Considering the encouraging LIGHT study data, chances of approval look good. If approved, Orexigen and partner Takeda will launch the drug in the second half of the year.

ITMN Prelim Results Look Good: InterMune’s (ITMN - Snapshot Report) shares shot up 9.5% with the company saying that Esbriet revenues should come in at $70.2 million in 2013, up 168%. Increased penetration in existing markets and launch in additional countries drove performance. The strong performance should continue in 2014.

DoJ Subpeona Overshadows AEGR Prelim Results: Aegerion (AEGR - Analyst Report) was another company that announced preliminary results last week. Although the company reported that sales of its cholesterol management drug, Juxtapid, will be in-line with the recently provided guidance of $45 million - $50 million, this news was overshadowed by the disclosure that the Department of Justice (DoJ) has issued a subpoena asking the company to provide documents related to the marketing and sale of the drug. Even the company’s 2014 guidance of global net product sales of $190 million - $210 million could not prevent the shares from declining more than 10% on the DoJ investigation news.

NPS End the Week Up 12.3%:  NPS Pharma (NPSP) exited last week 12% higher with the company announcing an FDA action date for Natpara for the treatment of hypoparathyroidism. The FDA will issue a response by Oct 24. The company also reported preliminary results and said it expects 2013 revenues in-line with the guidance of $28 million - $32 million. NPS also provided an encouraging outlook for Gattex sales in 2014.

MannKind Shares Slip: MannKind’s (MNKD - Analyst Report) shares slipped 16.4% on news that its diabetes candidate, Afrezza, will be reviewed by an FDA advisory panel on Apr 1. But is this really bad news? The setting up of an advisory panel actually gives the company a chance to address any concerns that may be associated with the candidate.

The problem in this case is that the advisory panel meeting will be held a mere fortnight before the FDA is expected to deliver a response on the approval status of Afrezza. So, the short gap between the panel date and the FDA action date may make investors jittery as the FDA may very well push out the PDUFA date in order to discuss the panel’s recommendation.

The Week So Far:

This week, most biotech companies have been attending the ongoing J.P. Morgan Annual Healthcare Conference where pipeline updates, strategic goals and guidance for 2014 have been presented.

Many companies have also been presenting preliminary results. Celgene expects to deliver 2013 earnings of $5.96 per share, well above current expectations. The company’s long-term outlook also looks good.

Dendreon (DNDN - Analyst Report) also reported a sequential improvement in Provenge sales and saw its shares jump 9%. But will this be enough to regain confidence in the product’s prospects? Remember, the prostate cancer market has several strong treatments like Zytiga and Xtandi which have been doing very well.

Alnylam Shoots Up on Sanofi Deal: Big pharma companies continue to show a lot of interest in Alnylam (ALNY - Analyst Report) – Sanofi (SNY - Analyst Report) expanded its agreement with the company for the development of rare genetic diseases. Genzyme, Sanofi’s subsidiary, will acquire a 12% stake in Alnylam through a $700 million investment. Alnylam gained 40% on the news.

Lexicon to Reduce Headcount: Lexicon Pharma (LXRX - Snapshot Report) will be cutting its headcount by about 45% as the company has decided to focus only on late-stage programs. The company’s CEO will also be leaving.

ICPT Loses Some Ground: Intercept, which saw its shares shoot up a whopping 281% last week, gave back some of the gains this week on news that its CEO said that the company may need support from a bigger player for its experimental liver disease drug.

Regeneron’s Eylea Keeps Impressing: Regeneron (REGN - Analyst Report) said that it expects Eylea’s fourth quarter sales to be about $400 million and $1.4 billion in 2013. Importantly, Eylea continues to represent significant growth potential in the form of additional indications and continued uptake for approved indications. Shares were up 11.8%.

Chelsea’s Northera on Approval Track? Chelsea Therapeutics should see a huge boost in its share price as the FDA’s advisory panel has voted (16-1) in favor of approving Northera for the treatment of symptomatic neurogenic orthostatic hypotension in patients with primary autonomic failure (Parkinson's disease, multiple system atrophy and pure autonomic failure), dopamine beta hydroxylase deficiency and non-diabetic autonomic neuropathy.

For the remainder of this week, we expect more updates at the J.P. Morgan conference as well as a few preliminary results.

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