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We are in the midst of earnings season with several biotech companies coming out with fourth quarter results and guidance for 2014. Meanwhile, pipeline data continues to flow in and the companies carry on with the usual business of filing for regulatory approval. But first, a look at a couple of winners on the earnings front.

Gilead’s (GILD - Analyst Report) Sovaldi Off to a Flying Start: Gilead’s fourth quarter results were strong with the company surpassing both revenue and earnings expectations. But the main focus was on the performance of recently launched hepatitis C virus (HCV) treatment, Sovaldi.

Sovaldi delivered sales of $136 million in just a month on the market. About $50 million represented patient demand. The strong launch indicates continued outperformance in 2014. Typically, new HCV treatments benefit due to the warehousing effect – patients and physicians postpone treatment with existing drugs so as to avail better new treatments once they are launched. Given the strong start, Sovaldi estimates are on the rise.

Cytokinetics (CYTK - Snapshot Report) Surprises: Cytokinetics’ shares gained 26.1% on strong fourth quarter results. The company surprised with its results - it reported a profit while analysts were expecting a loss. The company has three promising pipeline candidates and investors will be on the lookout for updates on the same.

Puma (PBYI - Snapshot Report) Surges on EU Patent Decision: Puma Biotech soared 18.2% on favorable patent-related news from Europe. The company’s licensed European patent - EP 1848414 - was upheld by the European Patent Office. Boehringer Ingelheim was looking to get the patent revoked.

Basically, this patent includes specific claims like a pharmaceutical composition for use in treating cancer in patients having a mutation in EGFR with a T790M mutation using an irreversible EGFR inhibitor. Although Puma is not developing its experimental cancer drug, neratinib, for the T790M resistance mutation, the patent is important in the T790M landscape and could help the company garner patent-related royalties in future.

Repros Soars on Androxal Data: Repros saw its shares soaring more than 15% on a favorable update regarding its experimental drug, Androxal, which is being developed for the treatment of secondary hypogonadism. The company met with the FDA to discuss phase III data requirements for its regulatory application for Androxal.

Repros said it remains on track to submit the NDA by year's end. The key take away from the meeting is that the company will not have to run additional safety studies as had been expected earlier.

EU Win for Biogen’s Tecfidera: Biogen’s oral multiple sclerosis drug Tecfidera gained EU approval. This was largely expected – Biogen had already received a positive opinion regarding Tecfidera’s approval in the EU last year. The company was waiting for stronger patent coverage which came through in November last year with the receipt of new active substance (NAS) designation for dimethyl fumarate. With the NAS designation in place, Tecfidera will enjoy 10 years of regulatory exclusivity in the EU.

 

Company

Last Week

Last 6 Months

AMGN

-0.04%

6.69%

BIIB

0.93%

44.90%

GILD

-2.36%

30.77%

CELG

3.26%

9.98%

REGN

3.88%

18.39%

ALXN

3.09%

42.72%

^BTK

-0.20%

17.40%

Other Developments:

Priority Review for Spectrum Drug: Spectrum Pharmaceuticals’ (SPPI - Snapshot Report) shares have been gaining ever since the FDA said that it will issue a response on the company’s experimental lymphoma drug, Beleodaq, on a priority basis.  A response will be out by Aug 9.

CRL for RedHill Biopharma: The FDA issued a complete response letter (CRL) for RedHill Biopharma and IntelGenx Corp.’s VersaFilm Oral Film Product for the treatment of acute migraines. Although disappointing, the good news is that no additional studies are needed. The main issues raised by the agency relate to third party Chemistry, Manufacturing and Controls and the packaging and labeling of the product.

Clarity on Sarepta (SRPT - Analyst Report) Phase III Study Soon? Sarepta gained 9.5% on encouraging new pulmonary function data from its phase IIb open-label extension study evaluating eteplirsen in patients with Duchenne muscular dystrophy. This data should help provide some clarity on the pivotal study for the candidate. An update should be available shortly.

New Kids on the Block: With the biotech sector garnering a lot of interest, quite a few companies have pulled off IPOs. These include Eleven Biotherapeutics, Revance Therapeutics and Egalet – together these companies will raise almost $200 million.

The Week So Far

Regeneron (REGN - Analyst Report) on a Roll: There is no stopping Regeneron, which continues to impress with its performance. The company’s fourth quarter results were strong and guidance encouraging. Eye drug, Eylea, remains poised for growth.

GILD’s Next HCV Drug Filed: Gilead is looking to get its once-daily fixed-dose HCV cocktail treatment -- ledipasvir (NS5A inhibitor) plus Sovaldi (nucleotide analog polymerase inhibitor) -- approved in the U.S.

Cadence an Acquisition Target: Mallinckrodt will be acquiring Cadence for $14.00 per share in cash or about $1.3 billion. The acquisition is slated to go through in mid-to-late March. Cadence shares were up 26.5% on the news.

Ligand Gains on Earnings Report: Ligand shares were up 13.8% on better-than-expected fourth quarter results as well as full year guidance well above expectations.

More earnings reports should come in through the remainder of the week. Plus, the FDA’s advisory panel will be voting on The Medicines Co.’s (MDCO - Analyst Report) cangrelor, an intravenous anticoagulant.

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