Back to top
Read MoreHide Full Article

Major biotech stocks like Gilead (GILD - Free Report) , Celgene (CELG - Free Report) , Alexion, AbbVie (ABBV - Free Report) and Vertex (VRTX - Free Report) reported second quarter results over the last few days. Companies like Gilead and Amgen (AMGN - Free Report) also provided regulatory updates. 

Recap of the Week’s Most Important Stories

A Look at Q2 Earnings Results: Gilead’s results were strong with the company’s HIV franchise putting in a strong performance and the hepatitis C virus (HCV) franchise performing better than expected. The company raised its revenue outlook including for the HCV franchise (Read more: Gilead Tops Q2 Earnings & Revenue Estimates, Stock Up). Celgene also topped estimates and raised its earnings guidance for the year (Read more: Celgene Beats Q2 Earnings & Sales Estimates, Ups View) as did Alexion (Read more: Alexion Tops Q2 Earnings & Revenues, Ups 2017 View). Vertex (Read more: Vertex Q2 Earnings Top on Solid Cystic Fibrosis Sales) and AbbVie too topped expectations (Read more: AbbVie Tops Q2 Earnings & Revenues, Outlook Intact).

Earlier-Than-Expected FDA Approval for Celgene/Agios Cancer Drug: Celgene and partner, Agios (AGIO - Free Report) gained FDA approval for Idhifa (enasidenib) for the treatment of adult patients with relapsed or refractory acute myeloid leukemia (R/R AML) with IDH2 mutation as detected by an FDA approved test. The approval came ahead of the FDA action date of Aug 30, 2017.

This makes Idhifa the first and only FDA-approved therapy for this patient population, which represents 8 – 19% of AML patients, as per information provided by the companies. More than 21,000 new cases of AML are detected every year in the U.S. with the majority of patients seeing their disease relapse eventually. The prognosis for R/R AML is poor with overall survival for this patient population estimated to be less than six months. Although Idhifa comes with a boxed warning regarding differentiation syndrome, uptake should be strong given the significant unmet medical need.

Will it be Third Time Lucky for Dynavax’s Heplisav-B? Dynavax’s (DVAX - Free Report) shares shot up on a favorable recommendation (12-1) from the FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) for Heplisav-B, a vaccine for immunization against hepatitis B infection in adults. With the positive vote, expectations are high that the company will finally gain approval for the vaccine which had previously received two complete response letters (one in Nov 2016 and the other in Feb 2013). A decision from the agency is expected on Aug 10. If approved, Dynavax plans to launch the vaccine early next year. Dynavax’s shares are up a whopping 284.8% year to date, significantly outperforming the industry’s 9.8% rally (Read more: Dynavax Shares Jump 75% after FDA Committee Approval).

Vertex Ups CF Outlook on Kalydeco Label Expansion: Vertex’s cystic fibrosis (CF) drug Kalydeco’s label has been expanded in the U.S. and can now be used in the more than 600 CF patients (2 years and older) who have one of five residual function mutations that result in a splicing defect in the cystic fibrosis transmembrane conductance regulator (CFTR) gene. With this label expansion, Vertex upped its 2017 sales guidance for the drug to $770 million - $800 million (old guidance: $740 - $770 million). Vertex now expects total CF product revenues of $1.87 billion - $2.1 billion (old guidance: $1.84 - $2.07 billion), including Orkambi sales of $1.1 billion - $1.3 billion (unchanged).

Regulatory Updates from Amgen and Gilead: Amgen provided quite a few regulatory updates over the last few days. The company said that it has submitted a regulatory application in the U.S. seeking label expansion for Prolia for the treatment of patients with glucocorticoid-induced osteoporosis (GIOP). Prolia brought in sales of $930 million in the first half of 2017.

Amgen along with partner Allergan also said that they have filed for FDA approval of ABP 980, a biosimilar candidate to Roche’s Herceptin (trastuzumab). Herceptin is approved for the treatment of HER2+ adjuvant breast cancer, metastatic breast cancer and metastatic gastric cancer in the U.S.

Meanwhile, Amgen’s PCSK9 inhibitor, Repatha, got priority review in the U.S. for the inclusion of FOURIER cardiovascular outcomes study data on the reduction in the risk of cardiovascular events. A decision from the agency is expected on Dec 2, 2017. Amgen said that a second application for the expansion of the lipid-lowering indication to include additional patient populations studied was also accepted by the agency.

Gilead also had some updates on the regulatory front. The company said that its HCV drug, Epclusa’s label was updated in the U.S. to include use in patients co-infected with HIV. Epclusa, which initially gained approval in Jun 2016, is an all-oral, pan-genotypic, once-daily single tablet regimen. The label expansion provides co-infected patients with a convenient one-pill-a-day regimen that works across all HCV genotypes and is compatible with widely-used antiretroviral regimens. Epclusa sales crossed $2 billion in the first half of 2017.

Moreover, Gilead’s latest HCV offering Vosevi gained approval in the EU for the treatment of all genotypes. The marketing authorization for Harvoni in the EU was also extended allowing use in the adolescent population. Vosevi was approved in the U.S. a few weeks back in July.

Gilead is a Zacks Rank #2 (Buy) 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

The NASDAQ Biotechnology Index declined 2.5% over the last five trading sessions. Among major biotech stocks, Alexion gained 6.5% while Regeneron lost 8.1%. Over the last six months, Vertex was up 77.6% (See the last biotech stock roundup here: Amgen, Biogen Top Q2 Estimates, Update on Incyte RA Drug).

What's Next in the Biotech World?

Watch out for earnings reports from companies like BioMarin and Regeneron among others.

More Stock News: Tech Opportunity Worth $386 Billion in 2017

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.

Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential.

See these stocks now>>



More from Zacks Analyst Blog

You May Like