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Analyst Blog

Earnings reports, pipeline updates and regulatory news were overshadowed by the run-up to the Presidential election and the surprise win of Donald Trump. In fact, the biotech sector responded favorably to Trump’s victory on hopes that there will be fewer drug pricing headwinds considering Trump was not as vocal as Hillary Clinton about rising drug prices and excessive price hikes. Trump’s pro-business stand is also expected to benefit the sector.

Recap of the Week’s Most Important Stories

Gilead HBV Drug Gains FDA Approval: Gilead (GILD - Free Report) , which is facing a slowdown in hepatitis C virus (HCV) franchise sales, gained FDA approval for Vemlidy (tenofovir alafenamide, TAF), a once-daily treatment for adults with chronic hepatitis B virus (HBV) infection with compensated liver disease. Approval comes with a boxed warning regarding the risks of lactic acidosis/severe hepatomegaly with steatosis and post-treatment severe acute exacerbation of HBV. With HBV being an under-treated disease that affects up to 2.2 million in the U.S., Vemlidy provides patients with a new treatment option.

Vemlidy also got a positive opinion from the Committee for Medicinal Products for Human Use (CHMP), the scientific committee of the European Medicines Agency (Read more: Gilead HBV Drug Vemlidy Gets Positive CHMP Opinion).

Amgen Impresses with PCSK9 Data at AHA: Amgen’s (AMGN - Free Report) PCSK9 inhibitor, Repatha, was shown to lead to a statistically significant regression of atherosclerosis in patients with coronary artery disease (CAD) when added to optimized statin therapy. These detailed results were presented from the late-stage GLAGOV coronary intravascular ultrasound imaging study at the American Heart Association (AHA) Scientific Sessions 2016 and were also published in the Journal of the American Medical Association.

Repatha is one of two PCSK9 inhibitors (the other being Praluent) currently available in the market. While both drugs have been touted as having blockbuster potential, sales so far have disappointed and are yet to pick up significantly. While the GLAGOV data looks encouraging, focus remains on cardiovascular outcomes study data, which if positive, are expected to boost sales significantly. Amgen expects to report data from its outcomes study, FOURIER, in the first quarter of 2017.  

Meanwhile, The Medicines Co. (MDCO - Free Report) and partner Alnylam (ALNY - Free Report) were also present at AHA with positive data from a mid-stage study of their experimental PCSK9 inhibitor, inclisiran, showing that the candidate met all interim analysis goals.

AbbVie Next-Gen HCV Combo on Track for NDA Filing: AbbVie (ABBV - Free Report) had some good news on the pipeline front with the company presenting new top-line data on its pan-genotypic, once-daily, ribavirin-free regimen of glecaprevir (ABT-493)/pibrentasvir (ABT-530) (G/P) across all major chronic HCV genotypes. Results showed that 97.5% of chronic HCV patients without cirrhosis and new to treatment achieved SVR12 at week 8. There were no patient discontinuations due to adverse events. AbbVie is on track to file for FDA approval by year end and EU and Japan approval early next year. With this regimen, AbbVie is targeting a faster path to cure for all HCV genotypes and addressing treatment areas of continued unmet need.

AbbVie also announced that its flagship drug, Humira, got a positive opinion in the EU for the treatment of active moderate to severe hidradenitis suppurativa (HS) in adolescents from 12 years of age who have not responded adequately to conventional systemic HS therapy. Approval would make Humira the first and only treatment option for this patient population. Humira is already approved for use in adults suffering from this painful, chronic inflammatory skin disease. AbbVie is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dynavax Plunges on Heplisav-B CRL: Dynavax’s shares plunged almost 65% on a complete response letter (CRL) from the FDA for Heplisav-B. The company was looking to get Heplisav-B approved for the immunization of adults against hepatitis B infection.

While the agency said that it is yet to complete the review of information submitted by Dynavax in early October, the CRL has asked for information on several topics including clarification regarding specific adverse events of special interest (AESIs), a numerical imbalance in a small number of cardiac events in a single study (HBV-23), new analyses of the integrated safety data base across different time periods, and post-marketing commitments. This is the second time that Dynavax has received a CRL for Heplisav-B. Dynavax said that given the time and resources that will be needed to gain approval, it may not be able to advance the program on its own and is looking for a pharmaceutical or financial partner.

FDA Lifts Partial Clinical Hold on Adaptimmune Treatment: The FDA has removed the partial clinical hold on Adaptimmune’s planned study of its NY-ESO SPEAR T-cell therapy in myxoid/round cell liposarcoma (MRCLS). The company will now commence a pilot study under a revised protocol with patient screening scheduled to start in the fourth quarter. The partial clinical hold was announced in August and had nothing to do with safety. The agency had asked the company to provide additional CMC information and clarification of certain study design-related queries before the commencement of the study.

Performance

Medical - Biomedical and Genetics Industry Price Index

It was a good week for biotech stocks with the NASDAQ Biotechnology Index soaring 11.2% over the last five trading days reflecting a positive response to Trump’s win. Additionally, Proposition 61, California’s ballot measure to ensure that the State of California is able to negotiate with drug companies for drug prices that do not exceed the price paid for the same drugs by the U.S. Department of Veterans Affairs, was also shot down by voters.

Among major biotech stocks, Regeneron (REGN - Free Report) shot up 16.6% while Vertex (VRTX - Free Report) was up 12.1%. Over the last six months, Alexion lost 16.8% while Biogen was up 21.2% (See the last biotech stock roundup here: Ionis Soars on Spinraza Data, Regeneron's Q3 Results Mixed).

What's Next in the Biotech World?

With third quarter earnings season drawing to a close, watch out for pipeline and regulatory updates.

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