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Biotech Stock Roundup: SAGE, GRTX Plunge on Setback, REGN to Buy DBTX & More News
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It was a busy week for the biotech sector, with a focus on earnings and important regulatory and pipeline updates. Among these, Sage Therapeutics (SAGE - Free Report) was in the spotlight as it suffered a regulatory setback.
Recap of the Week’s Most Important Stories:
SAGE Crashes on Setback: Shares of Sage Therapeutics plunged earlier in the week after the FDA issued a complete response letter (CRL) for its new drug application (NDA) for zuranolone to treat adults with major depressive disorder (MDD). The drug is being developed in collaboration with Biogen. The FDA stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone, and hence, an additional study or studies will be needed. Sage and Biogen are evaluating the further course of action.
The agency, however, approved zuranolone for adults with postpartum depression (PPD) under the brand name Zurzuvae. Per the companies, Zurzuvae is the first and only oral, once-daily, 14-day treatment that can rapidly improve depressive symptoms in women with PPD. This approval was based on the NEST clinical development program, which included two studies in adult women with PPD (ROBIN and SKYLARK Studies). Both studies met their primary endpoint, a significant mean reduction from baseline in the 17-item Hamilton Rating Scale for Depression (HAMD-17) total score, a common measure of depression severity, at Day 15 compared to placebo.
While the approval of the drug for PDD is positive, MDD is a much larger and more lucrative market opportunity. Investors clearly were disappointed with the setback, leading to the massive crash in Sage’s share price.
Regeneron to Acquire Decibel: Regeneron Pharmaceuticals, Inc. (REGN - Free Report) announced that it would acquire clinical-stage biotechnology company Decibel Therapeutics, Inc. for $213 million to expand its gene therapy programs for hearing loss.
Per the terms, Regeneron will acquire Decibel's common stock for $4.00 per share, payable in cash at closing. The deal will also give Decibel shareholders an additional non-tradeable contingent value right (CVR) to receive up to $3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for Decibel’s lead investigational candidate, DB-OTO, within specified periods. The transaction is expected to close in the third quarter of 2023.
Shares of Decibel surged 80.29% on Aug 9 following the acquisition news, as a merger with a bigwig like Regeneron will accelerate the development of candidates with a much-needed cash infusion and expertise. Both companies initially collaborated in 2017 to discover and develop new potential therapeutics to protect, repair and restore hearing. Thereafter, in 2021, Regeneron extended the research term of its collaboration with Decibel to discover and develop gene therapies for hearing loss to Nov 15, 2023.
Decibel’s pipeline includes DB-OTO, which is currently in the global phase I/II CHORD study. It is an investigational cell-selective, adeno-associated virus (AAV) gene therapy designed to provide durable, physiological hearing to individuals with profound, congenital hearing loss caused by mutations of the otoferlin gene. Preclinical programs include AAV.103 for people with GJB2-related hearing loss and AAV.104 for people with stereocilin-related hearing loss.
Galera Plunges on Regulatory Update: Shares of Galera Therapeutics, Inc. (GRTX - Free Report) plummeted on receipt of a CRL from the FDA regarding the company’s NDA for avasopasem manganese (avasopasem) for radiotherapy-induced severe oral mucositis in patients with head and neck cancer undergoing standard-of-care treatment. The FDA stated the results from the late-stage ROMAN trial, along with the supporting data from the GT-201 trial, are not sufficiently persuasive to establish substantial evidence of avasopasem’s effectiveness and safety for reducing severe oral mucositis in patients with head and neck cancer in the CRL. Consequently, the regulatory body asked for results from an additional clinical trial for resubmission.
Galera intends to request a type A meeting with the FDA to understand the agency’s rationale for its decision and discuss the next steps to support an NDA resubmission seeking approval of avasopasem. It is also looking for partnerships for the continued development of avasopasem and rucosopasem.
Galera also announced that it will reduce its workforce by approximately 70%. The restructuring plan includes a wind-down of launch activities and headcount reductions across several departments.
Vistagen Surges on Study Success: Shares of clinical-stage biopharmaceutical company, Vistagen (VTGN - Free Report) , surged after the company announced that its late-stage study evaluating the efficacy, safety and tolerability of fasedienol (PH94B) nasal spray in adults diagnosed with social anxiety disorder (SAD) was successful. The phase III study, PALISADE-2, met its primary endpoint, with fasedienol demonstrating a statistically significant difference in average SUDS score during a public speaking challenge compared to placebo. The trial also met its secondary endpoint, demonstrating a statistically significant difference in the proportion of clinician-assessed responders between fasedienol and placebo as measured by the CGI-I scale. The candidate was well-tolerated and demonstrated a favorable safety profile consistent with all prior trials.
Consequently, Vistagen is planning an additional phase III study involving multiple administrations of fasedienol over several weeks on a patient-tailored basis. The success of the PALISADE-2 increases the probability of a plausible FDA approval of the candidate, which will be a significant boost for Vistagen.
Performance
The Nasdaq Biotechnology Index has lost 1.08% in the past five trading sessions. Among the biotech giants, Amgen has gained 13.59% during the period. Over the past six months, shares of Moderna have lost 40.76%. (See the last biotech stock roundup here: Biotech Stock Roundup: BIIB, GSKs Q2 Earnings, KOD Faces Setback & More).
What's Next in Biotech?
Stay tuned for more pipeline updates.
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Biotech Stock Roundup: SAGE, GRTX Plunge on Setback, REGN to Buy DBTX & More News
It was a busy week for the biotech sector, with a focus on earnings and important regulatory and pipeline updates. Among these, Sage Therapeutics (SAGE - Free Report) was in the spotlight as it suffered a regulatory setback.
Recap of the Week’s Most Important Stories:
SAGE Crashes on Setback: Shares of Sage Therapeutics plunged earlier in the week after the FDA issued a complete response letter (CRL) for its new drug application (NDA) for zuranolone to treat adults with major depressive disorder (MDD). The drug is being developed in collaboration with Biogen. The FDA stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone, and hence, an additional study or studies will be needed. Sage and Biogen are evaluating the further course of action.
The agency, however, approved zuranolone for adults with postpartum depression (PPD) under the brand name Zurzuvae. Per the companies, Zurzuvae is the first and only oral, once-daily, 14-day treatment that can rapidly improve depressive symptoms in women with PPD. This approval was based on the NEST clinical development program, which included two studies in adult women with PPD (ROBIN and SKYLARK Studies). Both studies met their primary endpoint, a significant mean reduction from baseline in the 17-item Hamilton Rating Scale for Depression (HAMD-17) total score, a common measure of depression severity, at Day 15 compared to placebo.
While the approval of the drug for PDD is positive, MDD is a much larger and more lucrative market opportunity. Investors clearly were disappointed with the setback, leading to the massive crash in Sage’s share price.
Regeneron to Acquire Decibel: Regeneron Pharmaceuticals, Inc. (REGN - Free Report) announced that it would acquire clinical-stage biotechnology company Decibel Therapeutics, Inc. for $213 million to expand its gene therapy programs for hearing loss.
Per the terms, Regeneron will acquire Decibel's common stock for $4.00 per share, payable in cash at closing. The deal will also give Decibel shareholders an additional non-tradeable contingent value right (CVR) to receive up to $3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for Decibel’s lead investigational candidate, DB-OTO, within specified periods. The transaction is expected to close in the third quarter of 2023.
Shares of Decibel surged 80.29% on Aug 9 following the acquisition news, as a merger with a bigwig like Regeneron will accelerate the development of candidates with a much-needed cash infusion and expertise. Both companies initially collaborated in 2017 to discover and develop new potential therapeutics to protect, repair and restore hearing. Thereafter, in 2021, Regeneron extended the research term of its collaboration with Decibel to discover and develop gene therapies for hearing loss to Nov 15, 2023.
Decibel’s pipeline includes DB-OTO, which is currently in the global phase I/II CHORD study. It is an investigational cell-selective, adeno-associated virus (AAV) gene therapy designed to provide durable, physiological hearing to individuals with profound, congenital hearing loss caused by mutations of the otoferlin gene. Preclinical programs include AAV.103 for people with GJB2-related hearing loss and AAV.104 for people with stereocilin-related hearing loss.
Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Galera Plunges on Regulatory Update: Shares of Galera Therapeutics, Inc. (GRTX - Free Report) plummeted on receipt of a CRL from the FDA regarding the company’s NDA for avasopasem manganese (avasopasem) for radiotherapy-induced severe oral mucositis in patients with head and neck cancer undergoing standard-of-care treatment. The FDA stated the results from the late-stage ROMAN trial, along with the supporting data from the GT-201 trial, are not sufficiently persuasive to establish substantial evidence of avasopasem’s effectiveness and safety for reducing severe oral mucositis in patients with head and neck cancer in the CRL. Consequently, the regulatory body asked for results from an additional clinical trial for resubmission.
Galera intends to request a type A meeting with the FDA to understand the agency’s rationale for its decision and discuss the next steps to support an NDA resubmission seeking approval of avasopasem. It is also looking for partnerships for the continued development of avasopasem and rucosopasem.
Galera also announced that it will reduce its workforce by approximately 70%. The restructuring plan includes a wind-down of launch activities and headcount reductions across several departments.
Vistagen Surges on Study Success: Shares of clinical-stage biopharmaceutical company, Vistagen (VTGN - Free Report) , surged after the company announced that its late-stage study evaluating the efficacy, safety and tolerability of fasedienol (PH94B) nasal spray in adults diagnosed with social anxiety disorder (SAD) was successful. The phase III study, PALISADE-2, met its primary endpoint, with fasedienol demonstrating a statistically significant difference in average SUDS score during a public speaking challenge compared to placebo. The trial also met its secondary endpoint, demonstrating a statistically significant difference in the proportion of clinician-assessed responders between fasedienol and placebo as measured by the CGI-I scale. The candidate was well-tolerated and demonstrated a favorable safety profile consistent with all prior trials.
Consequently, Vistagen is planning an additional phase III study involving multiple administrations of fasedienol over several weeks on a patient-tailored basis. The success of the PALISADE-2 increases the probability of a plausible FDA approval of the candidate, which will be a significant boost for Vistagen.
Performance
The Nasdaq Biotechnology Index has lost 1.08% in the past five trading sessions. Among the biotech giants, Amgen has gained 13.59% during the period. Over the past six months, shares of Moderna have lost 40.76%. (See the last biotech stock roundup here: Biotech Stock Roundup: BIIB, GSKs Q2 Earnings, KOD Faces Setback & More).
What's Next in Biotech?
Stay tuned for more pipeline updates.