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Biotech Stock Roundup: Alexion to Cut Jobs, Streamline Operations, Kura Up on Cancer Data
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There were quite a few major developments this week with Alexion Pharmaceuticals announcing a restructuring plan that will see the company cutting jobs and streamlining operations. Meanwhile, data was presented by companies like Regeneron Pharmaceuticals (REGN - Free Report) , AbbVie (ABBV - Free Report) and Kura Oncology (KURA - Free Report) among others.
Recap of the Week’s Most Important Stories
Alexion to Cut Jobs, Shift Headquarters: Alexion announced a restructuring plan which will see the company cutting down its global workforce by 20%, closing down several sites (including the Rhode Island manufacturing facility and certain regional and country-based offices) and shifting its headquarters to Boston (by mid-2018). With these efforts, the company expects to generate annual pre-tax savings of about $250 million by 2019. Savings will be used for growth opportunities and optimization. Alexion is guiding toward operating margin growth of 50% in 2019 and expects to reinvest about $100 million every year in R&D starting from 2018.
Alexion is focusing on growing and maximizing its presence in the rare disease business. Core areas of focus include hematology, nephrology, neurology and metabolic disorders. As a result of the restructuring, the company expects to incur pre-tax costs of about $340 million - $440 million of which $240 million - $300 million will be recorded this year.
Regeneron/Sanofi Asthma Drug Positive in Phase III: Regeneron and partner Sanofi announced positive top-line results from a late-stage study on Dupixent (dupilumab) for uncontrolled persistent asthma.
Dupixent was found to reduce severe asthma attacks and improve lung function. While overall results were good, less activity was observed in patients with lower eosinophilic cells. Regeneron and Sanofi intend to file for FDA approval by year end. The asthma market is huge with about one million people in the United States living with uncontrolled, persistent asthma despite being treated with standard therapies. Dupixent, which has blockbuster potential, is currently approved for eczema and is being evaluated for additional indications like pediatric atopic dermatitis, nasal polyps and eosinophilic esophagitis (Read more: Regeneron/Sanofi's Dupixent Asthma Study Meets Endpoints).
AbbVie’s Upadacitinib Positive in Studies: AbbVie came out with positive data with the company saying that its experimental oral JAK1-selective inhibitor, upadacitinib (ABT-494), met all primary and ranked secondary endpoints in a late-stage study for moderate to severe rheumatoid arthritis (Read more: AbbVie's RA Candidate Meets Primary Endpoint in Phase III). The company also presented promising data on upadacitinib for atopic dermatitis or eczema from a phase IIb study (Read more: AbbVie's Upadacitinib Meets Primary Endpoint in Phase IIb). Upadacitinib is being evaluated for additional indications including psoriatic arthritis, Crohn's disease, ulcerative colitis and ankylosing spondylitis.
Intercept Hit by “Dear Doctor” Letter: Intercept Pharmaceuticals’s shares were down on a “Dear Doctor” letter issued by the company related to the use of its sole marketed product, Ocaliva. The letter lays emphasis on the use of the recommended dosage on the label as liver injury, liver decompensation, liver failure, and death were reported when Ocaliva was dosed more frequently than recommended. Ocaliva, approved in May 2016 for primary biliary cholangitis (“PBC”) in patients with moderate or severe hepatic impairment (Child-Pugh B and C), brought in sales of $30.4 million in the second quarter of 2017. While Intercept’s shares were down 16.1%, the company said on a recent call that it does not expect any label changes or a boxed warning.
Sage Drug Disappoints in Late-Stage Study: Sage Therapeutics’s (SAGE - Free Report) shares were down 13.7% on disappointing top-line data from a late-stage study on brexanolone (SAGE-547) for treatment super-refractory status epilepticus (“SRSE”). The study failed to meet the primary endpoint. Brexanolone is currently in late-stage development for the treatment of postpartum depression (“PPD”).
Kura Soars on Promising Cancer Study Data: Kura’s shares jumped more than 70% on positive topline results from a mid-stage study on its lead pipeline candidate, tipifarnib, in patients with HRAS mutant relapsed or refractory squamous cell carcinomas of the head and neck (“HNSCC”). The primary endpoint was achieved before the completion of enrollment.
Performance
Medical - Biomedical and Genetics Industry 5YR % Return
The Nasdaq Biotechnology Index gained 0.6% over the last five trading sessions. Among major biotech stocks, Amgen was up 8.1% while Regeneron lost 10.1%. Over the last six months, Vertex (VRTX - Free Report) was up 66.9% (See the last biotech stock roundup here: Cellectis Down on Clinical Hold, Insmed Soars on Positive Data).
What's Next in the Biotech World?
Watch out for the usual regulatory and pipeline updates. A response from the FDA regarding the approval status of Amgen and Allergan’s biosimilar version of Roche’s cancer drug, Avastin (bevacizumab), should be out shortly. The companies got a favorable vote from an FDA advisory panel recently.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Biotech Stock Roundup: Alexion to Cut Jobs, Streamline Operations, Kura Up on Cancer Data
There were quite a few major developments this week with Alexion Pharmaceuticals announcing a restructuring plan that will see the company cutting jobs and streamlining operations. Meanwhile, data was presented by companies like Regeneron Pharmaceuticals (REGN - Free Report) , AbbVie (ABBV - Free Report) and Kura Oncology (KURA - Free Report) among others.
Recap of the Week’s Most Important Stories
Alexion to Cut Jobs, Shift Headquarters: Alexion announced a restructuring plan which will see the company cutting down its global workforce by 20%, closing down several sites (including the Rhode Island manufacturing facility and certain regional and country-based offices) and shifting its headquarters to Boston (by mid-2018). With these efforts, the company expects to generate annual pre-tax savings of about $250 million by 2019. Savings will be used for growth opportunities and optimization. Alexion is guiding toward operating margin growth of 50% in 2019 and expects to reinvest about $100 million every year in R&D starting from 2018.
Alexion is focusing on growing and maximizing its presence in the rare disease business. Core areas of focus include hematology, nephrology, neurology and metabolic disorders. As a result of the restructuring, the company expects to incur pre-tax costs of about $340 million - $440 million of which $240 million - $300 million will be recorded this year.
Alexion is a Zacks Rank #1 (Strong Buy) stock - you can see the complete list of today’s Zacks #1 Rank stocks here. The company has gained 17.8% year to date, outperforming the industry’s 15.9% rally.
Regeneron/Sanofi Asthma Drug Positive in Phase III: Regeneron and partner Sanofi announced positive top-line results from a late-stage study on Dupixent (dupilumab) for uncontrolled persistent asthma.
Dupixent was found to reduce severe asthma attacks and improve lung function. While overall results were good, less activity was observed in patients with lower eosinophilic cells. Regeneron and Sanofi intend to file for FDA approval by year end. The asthma market is huge with about one million people in the United States living with uncontrolled, persistent asthma despite being treated with standard therapies. Dupixent, which has blockbuster potential, is currently approved for eczema and is being evaluated for additional indications like pediatric atopic dermatitis, nasal polyps and eosinophilic esophagitis (Read more: Regeneron/Sanofi's Dupixent Asthma Study Meets Endpoints).
AbbVie’s Upadacitinib Positive in Studies: AbbVie came out with positive data with the company saying that its experimental oral JAK1-selective inhibitor, upadacitinib (ABT-494), met all primary and ranked secondary endpoints in a late-stage study for moderate to severe rheumatoid arthritis (Read more: AbbVie's RA Candidate Meets Primary Endpoint in Phase III). The company also presented promising data on upadacitinib for atopic dermatitis or eczema from a phase IIb study (Read more: AbbVie's Upadacitinib Meets Primary Endpoint in Phase IIb). Upadacitinib is being evaluated for additional indications including psoriatic arthritis, Crohn's disease, ulcerative colitis and ankylosing spondylitis.
Intercept Hit by “Dear Doctor” Letter: Intercept Pharmaceuticals’s shares were down on a “Dear Doctor” letter issued by the company related to the use of its sole marketed product, Ocaliva. The letter lays emphasis on the use of the recommended dosage on the label as liver injury, liver decompensation, liver failure, and death were reported when Ocaliva was dosed more frequently than recommended. Ocaliva, approved in May 2016 for primary biliary cholangitis (“PBC”) in patients with moderate or severe hepatic impairment (Child-Pugh B and C), brought in sales of $30.4 million in the second quarter of 2017. While Intercept’s shares were down 16.1%, the company said on a recent call that it does not expect any label changes or a boxed warning.
Sage Drug Disappoints in Late-Stage Study: Sage Therapeutics’s (SAGE - Free Report) shares were down 13.7% on disappointing top-line data from a late-stage study on brexanolone (SAGE-547) for treatment super-refractory status epilepticus (“SRSE”). The study failed to meet the primary endpoint. Brexanolone is currently in late-stage development for the treatment of postpartum depression (“PPD”).
Kura Soars on Promising Cancer Study Data: Kura’s shares jumped more than 70% on positive topline results from a mid-stage study on its lead pipeline candidate, tipifarnib, in patients with HRAS mutant relapsed or refractory squamous cell carcinomas of the head and neck (“HNSCC”). The primary endpoint was achieved before the completion of enrollment.
Performance
Medical - Biomedical and Genetics Industry 5YR % Return
Medical - Biomedical and Genetics Industry 5YR % Return
The Nasdaq Biotechnology Index gained 0.6% over the last five trading sessions. Among major biotech stocks, Amgen was up 8.1% while Regeneron lost 10.1%. Over the last six months, Vertex (VRTX - Free Report) was up 66.9% (See the last biotech stock roundup here: Cellectis Down on Clinical Hold, Insmed Soars on Positive Data).
What's Next in the Biotech World?
Watch out for the usual regulatory and pipeline updates. A response from the FDA regarding the approval status of Amgen and Allergan’s biosimilar version of Roche’s cancer drug, Avastin (bevacizumab), should be out shortly. The companies got a favorable vote from an FDA advisory panel recently.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>