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Analyst Blog

Last week’s biotech highlights include strong results from Regeneron (REGN - Analyst Report) and Gilead’s (GILD - Analyst Report) marketing application for its next hepatitis C virus (HCV) treatment. The Medicines Co. (MDCO - Analyst Report) was also in the news with the FDA’s advisory panel refusing to back the company’s antiplatelet agent, Cangrelor.

Regeneron 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. An FDA decision regarding the diabetic macular edema indication should be out in August.

Regeneron expects to file for a fourth indication, macular edema following branch retinal vein occlusion, shortly. The company will also be moving to a tax-efficient operating model -- the benefits should materialize from 2017. There is definitely a lot to like about Regeneron.

GILD Already Planning for Next HCV Drug: 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. Approval would make this combination the first oral treatment for HCV patients with genotype 1 infection to be available in the U.S. The important thing is that patients would not need to take interferon or ribavirin (RBV), which are usually associated with greater side effects.

But competition is not far behind. AbbVie (ABBV - Analyst Report) recently provided data from four additional studies that evaluated its all-oral, interferon-free therapy with/without RBV in the same patient population.

AbbVie remains on track to file for its HCV treatment early in the second quarter of 2014 and expects to gain approval this year.

Both treatments look effective with high cure rates. But Gilead’s treatment is once daily while AbbVie’s will require more frequent dosing. However, eventually pricing will play a role as well in share uptake.

Cadence to Be Acquired: Mallinckrodt plc will be acquiring Cadence for $14.00 per share in cash or about $1.3 billion. The offer price represents a 32% premium to the trailing 30-trading-day volume weighted average price of $10.62 per share for Cadence. The acquisition is slated to go through in mid-to-late March. Cadence shares were up 26.5% on the news.

MDCO’s Cangrelor Fails to Get Panel Support: The Medicines Co.’s antiplatelet agent, Cangrelor, failed to get the support of the FDA’s advisory panel. Primary concerns included the design of the study conducted with the candidate and higher bleeding rates compared to Plavix. Currently, chances of gaining FDA approval look pretty low – a final response should be out by Apr 30. Shares were down 11.5%.

Company Last Week Last 6 Months
AMGN 4.68% 18.18%
BIIB 4.04% 58.96%
GILD 3.12% 42.75%
CELG 4.49% 38.56%
REGN 8.07% 70.09%
ALXN 10.34% 30.85%
^BTK 4.06% 17.40%

 

 

 

 

 

 

 

Other Developments:

FDA Says Yes to BioMarin’s (BMRN - Analyst Report) Vimizim: BioMarin’s enzyme replacement therapy, Vimizim, gained FDA approval for the treatment of Morquio A syndrome that is estimated to affect 3,000 people in the developed world. Vimizim, which is the first and only drug therapy approved for Morquio A syndrome, got approved with a broad label. About 350 patients are expected to be on the drug by year end. BioMarine's Vimizim sales guidance of $60 million - $70 million should be easily achievable – annual cost of treatment for a typical patient on Vimizim is expected to be about $380,000.

AVEO – Astellas Call It Quits: After facing several setbacks related to the development of oncology candidate, tivozanib, AVEO (AVEO - Snapshot Report) and partner Astellas (ALPMY) have decided to terminate their agreement for the development and commercialization of tivozanib. The worldwide collaboration and license agreement, which dates back to 2011, will come to an end on Aug 11, 2014, with full rights going back to AVEO.

The big question now is will AVEO continue on its own with the development of tivozanib. Considering the tivozanib-related setbacks, we do not think a partnership deal for the candidate will materialize any time soon.

Second Indication for Pharmacyclics’ Imbruvica: The FDA approved Pharmacyclics’ (PCYC - Analyst Report) and Johnson & Johnson’s (JNJ - Analyst Report) Imbruvica for chronic lymphocytic leukemia (CLL) in patients who have undergone treatment with at least one therapy. CLL is the most common type of leukemia. This is the second indication for Imbruvica which gained approval last year for mantle cell lymphoma. Imbruvica has blockbuster potential.

Coming Up:

The CHMP’s opinion on Vimizim’s approval in the EU should be out on Friday. With the U.S. accounting for only 15% of the 1,500 patients identified by BioMarin, EU approval remains key.

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