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Biotech Stock Roundup: FDA CRL Hits Incyte, Pipeline Setbacks Weigh on OncoMed
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The FDA’s complete response letter (CRL) for Incyte (INCY - Free Report) and Lilly’s experimental rheumatoid arthritis (RA) treatment was the big news in the biotech sector while OncoMed continued to be hit by more pipeline setbacks.
Recap of the Week’s Most Important Stories
CRL for Incyte’s RA Drug, FDA Wants More Data: Incyte and partner Lilly were in for a major disappointment with the FDA issuing a CRL for their experimental RA treatment, baricitinib. The agency told the companies that it is unable to approve baricitinib, a once-daily oral medication for the treatment of moderate-to-severe RA, in its current form. What is concerning is that the agency has asked for additional clinical data to determine the most appropriate doses as well as to further characterize safety concerns across treatment arms. This means delayed approval timelines and additional costs depending on the studies that may need to be conducted. Lilly and Incyte said that they were not in agreement with the FDA and the timing for resubmission would be based on further discussions with the agency.
We note that baricitinib was approved in the EU under the trade name Olumiant in Feb 2017. Incyte’s shares were down on the CRL. The company is evaluating the impact of the CRL on its previously-issued milestone and R&D expense guidance for 2017 and will provide an update on its first quarter call to be held on May 4 (Read more: Eli Lilly's Rheumatoid Arthritis Drug Gets CRL in the U.S.).
OncoMed Hit by More Pipeline Setbacks: There seems to be no end to OncoMed’s woes with the company now reporting disappointing top-line data on yet another pipeline candidate. The company announced that its experimental lung-cancer treatment, tarextumab, failed to meet the primary endpoint or secondary endpoints in a mid-stage study. The company also announced its intention to discontinue patient enrolment in a phase Ib study evaluating brontictuzumab plus Lonsurf in third-line colorectal cancer patients as the combination of brontictuzumab plus chemotherapy was not tolerable in this patient population. Shares were down on the news and hit a new 52-week low.
The latest setbacks come just a week after the company announced demcizumab’s failure in a mid-stage study in treatment-naïve metastatic pancreatic cancer patients and Bayer Pharma’s decision to not exercise its option to license OncoMed’s Wnt pathway inhibitors vantictumab and ipafricept for strategic reasons (Read more: OncoMed Cancer Candidate Fails Trial, Bayer Opts Out of Deal). Not surprisingly, OncoMed said that it intends to conduct a comprehensive portfolio prioritization review.
So far in 2017, OncoMed’s shares are down 49.9%, significantly lagging the Zacks-categorized Medical-Biomedical/Genetics industry which is up 3% year-to-date YTD).
Biogen in Licensing Agreement with Bristol-Myers: Biogen (BIIB - Free Report) , which is looking to strengthen its Alzheimer’s disease (AD) pipeline, announced a licensing agreement with Bristol-Myers Squibb for exclusive rights to BMS-986168, an anti-tau candidate. BMS-986168 is phase II-ready with potential in AD as well as progressive supranuclear palsy (PSP). Biogen’s AD pipeline comprises candidates with different mechanisms of action including anti-tau and anti-amyloid candidates as well as a BACE inhibitor program (Read more: Biogen to License Alzheimer Candidate from Bristol-Myers).
BioMarin Settles Kuvan Patent Challenge: BioMarin (BMRN - Free Report) entered into a settlement agreement with Par Pharmaceutical related to a patent infringement lawsuit for BioMarin’s phenylketonuria (PKU) drug, Kuvan (tablets and powder). With this agreement, Kuvan should not face generic competition from Par until Oct 1, 2020. The company had earlier entered into a settlement agreement with Dr. Reddy’s for Kuvan tablets in Sep 2015. The settlement agreement removes an overhang on the shares -- Kuvan brought in sales of $348 million in 2016 and is expected to generate sales in the range of $380 - $410 million in 2017.
Ionis Signs Agreement with Ribo: Ionis (IONS - Free Report) is reaching out to the highly lucrative Chinese pharma market through a collaboration with Suzhou Ribo Life Science Co., Ltd. The licensing deal is focused on the development and commercialization of RNA-targeted therapeutics in China. Under the agreement, Ribo will get to commercialize two Ionis Generation 2+ antisense drugs in metabolic disease and cancer as well as an option to license a third pre-specified Generation 2+ antisense drug in China. Moreover, Ribo will be responsible for conducting a multi-year research and drug discovery program to identify drugs that utilize Ionis' ssRNAi technology. The deal will see Ionis receive an undisclosed up-front payment and equity in Ribo.
The NASDAQ Biotechnology Index declined slightly (0.2%) over the last four trading sessions. Among major biotech stocks, Celgene declined 1.6% while Alexion gained 1.1%. Over the last six months, Vertex was up 38.2% while Gilead was down 10% (See the last biotech stock roundup here: Geron Gains on Interim Data, OncoMed Slumps on Pipeline Setback).
What's Next in the Biotech World?
Watch out for earnings results from companies like Biogen and The Medicines Co. in the coming week.
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Biotech Stock Roundup: FDA CRL Hits Incyte, Pipeline Setbacks Weigh on OncoMed
The FDA’s complete response letter (CRL) for Incyte (INCY - Free Report) and Lilly’s experimental rheumatoid arthritis (RA) treatment was the big news in the biotech sector while OncoMed continued to be hit by more pipeline setbacks.
Recap of the Week’s Most Important Stories
CRL for Incyte’s RA Drug, FDA Wants More Data: Incyte and partner Lilly were in for a major disappointment with the FDA issuing a CRL for their experimental RA treatment, baricitinib. The agency told the companies that it is unable to approve baricitinib, a once-daily oral medication for the treatment of moderate-to-severe RA, in its current form. What is concerning is that the agency has asked for additional clinical data to determine the most appropriate doses as well as to further characterize safety concerns across treatment arms. This means delayed approval timelines and additional costs depending on the studies that may need to be conducted. Lilly and Incyte said that they were not in agreement with the FDA and the timing for resubmission would be based on further discussions with the agency.
We note that baricitinib was approved in the EU under the trade name Olumiant in Feb 2017. Incyte’s shares were down on the CRL. The company is evaluating the impact of the CRL on its previously-issued milestone and R&D expense guidance for 2017 and will provide an update on its first quarter call to be held on May 4 (Read more: Eli Lilly's Rheumatoid Arthritis Drug Gets CRL in the U.S.).
OncoMed Hit by More Pipeline Setbacks: There seems to be no end to OncoMed’s woes with the company now reporting disappointing top-line data on yet another pipeline candidate. The company announced that its experimental lung-cancer treatment, tarextumab, failed to meet the primary endpoint or secondary endpoints in a mid-stage study. The company also announced its intention to discontinue patient enrolment in a phase Ib study evaluating brontictuzumab plus Lonsurf in third-line colorectal cancer patients as the combination of brontictuzumab plus chemotherapy was not tolerable in this patient population. Shares were down on the news and hit a new 52-week low.
The latest setbacks come just a week after the company announced demcizumab’s failure in a mid-stage study in treatment-naïve metastatic pancreatic cancer patients and Bayer Pharma’s decision to not exercise its option to license OncoMed’s Wnt pathway inhibitors vantictumab and ipafricept for strategic reasons (Read more: OncoMed Cancer Candidate Fails Trial, Bayer Opts Out of Deal). Not surprisingly, OncoMed said that it intends to conduct a comprehensive portfolio prioritization review.
So far in 2017, OncoMed’s shares are down 49.9%, significantly lagging the Zacks-categorized Medical-Biomedical/Genetics industry which is up 3% year-to-date YTD).
Biogen in Licensing Agreement with Bristol-Myers: Biogen (BIIB - Free Report) , which is looking to strengthen its Alzheimer’s disease (AD) pipeline, announced a licensing agreement with Bristol-Myers Squibb for exclusive rights to BMS-986168, an anti-tau candidate. BMS-986168 is phase II-ready with potential in AD as well as progressive supranuclear palsy (PSP). Biogen’s AD pipeline comprises candidates with different mechanisms of action including anti-tau and anti-amyloid candidates as well as a BACE inhibitor program (Read more: Biogen to License Alzheimer Candidate from Bristol-Myers).
BioMarin Settles Kuvan Patent Challenge: BioMarin (BMRN - Free Report) entered into a settlement agreement with Par Pharmaceutical related to a patent infringement lawsuit for BioMarin’s phenylketonuria (PKU) drug, Kuvan (tablets and powder). With this agreement, Kuvan should not face generic competition from Par until Oct 1, 2020. The company had earlier entered into a settlement agreement with Dr. Reddy’s for Kuvan tablets in Sep 2015. The settlement agreement removes an overhang on the shares -- Kuvan brought in sales of $348 million in 2016 and is expected to generate sales in the range of $380 - $410 million in 2017.
Ionis Signs Agreement with Ribo: Ionis (IONS - Free Report) is reaching out to the highly lucrative Chinese pharma market through a collaboration with Suzhou Ribo Life Science Co., Ltd. The licensing deal is focused on the development and commercialization of RNA-targeted therapeutics in China. Under the agreement, Ribo will get to commercialize two Ionis Generation 2+ antisense drugs in metabolic disease and cancer as well as an option to license a third pre-specified Generation 2+ antisense drug in China. Moreover, Ribo will be responsible for conducting a multi-year research and drug discovery program to identify drugs that utilize Ionis' ssRNAi technology. The deal will see Ionis receive an undisclosed up-front payment and equity in Ribo.
Ionis is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance
Medical - Biomedical and Genetics Industry 5YR % Return
Medical - Biomedical and Genetics Industry 5YR % Return
The NASDAQ Biotechnology Index declined slightly (0.2%) over the last four trading sessions. Among major biotech stocks, Celgene declined 1.6% while Alexion gained 1.1%. Over the last six months, Vertex was up 38.2% while Gilead was down 10% (See the last biotech stock roundup here: Geron Gains on Interim Data, OncoMed Slumps on Pipeline Setback).
What's Next in the Biotech World?
Watch out for earnings results from companies like Biogen and The Medicines Co. in the coming week.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>