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Pharma Stock Roundup: Novo Nordisk Reveals Bid to Acquire Ablynx, Pfizer & Others at Healthcare Conference
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Focus this week was on the 36th annual JPMorgan healthcare conference where several biotech and pharma companies provided a preliminary look at their results for 2017 and also provided pipeline updates as well as their outlooks for 2018.
Recap of the Week’s Most Important Stories
Key Takeaways from JPMorgan Healthcare Conference: Several pharma companies were present at the 36th annual JPMorgan healthcare conference, the largest and most informative healthcare investment symposium in the industry. Among key updates, Pfizer (PFE - Free Report) said that it expects 2018 to be a rich data delivery year. Bristol-Myers Squibb Company (BMY - Free Report) also provided a look at its pipeline including opportunities for Opdivo. The company also said that business development remains an important priority with the focus being on deals that make sense from a financial perspective and where the assets and technologies are strategically aligned to its priorities and are potentially transformational. Merck (MRK - Free Report) is also on the lookout for business development deals while exercising financial discipline. The company said that it is looking at opportunities through licensing deals and bolt-on acquisitions to add drugs/technology that address unmet medical needs (Read more: Key Takeaways from Pfizer & 3 Other Drug Stocks at Healthcare Conference). Allergan was also present at the conference with its preliminary financial outlook for 2018 (Read more: Allergan's Sales Guidance for 2018 Lower Than Expected). GlaxoSmithKline (GSK - Free Report) , meanwhile, is looking to strengthen its pharma pipeline by prioritizing its development capital focus on two core (respiratory and HIV/infectious diseases) and two potential therapy (immuno-inflammation and oncology) areas. Glaxo is a Zacks Rank #2 (Buy) stock - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Novo Nordisk Goes Public With Ablynx Proposal: Novo Nordisk (NVO - Free Report) confirmed that it is looking to acquire Belgium-based biopharma company Ablynx. Novo Nordisk had initially proposed to acquire Ablynx for €26.75 per share in cash. However, the company came back with a revised offer when Ablynx rejected the first proposal. Novo Nordisk’s latest offer includes an upfront cash payment of €28 per share plus a contingent value right (“CVR”) worth up to €2.50 per share (total equity valuation of approximately €2.6 billion). This offer, too, has been rejected by Ablynx with the company’s Board announcing that the proposal fundamentally undervalues Ablynx and its growth prospects.
A look at Ablynx’s pipeline shows that the company could well be in a position to launch its first product, caplacizumab (anti-vWF; acquired thrombotic thrombocytopenic purpura - aTTP), this year. Caplacizumab is currently under review in the EU while a regulatory application will be filed in the United States in the first half of 2018. The estimated annual market opportunity for aTTP, a life-threatening blood clotting disease, is expected to be about €1.2 billion. The company also has a broad range of partnerships with the potential to generate more than €10.6 billion in milestones plus royalties. Other pipeline candidates also address significant market opportunities. While currently there are no rumors about additional bidders, the EU approval of caplacizumab could well change this scenario.
As far as Novo Nordisk is concerned, the acquisition would make sense with caplacizumab being a good fit for the company’s hematology portfolio. The deal would also give a boost to Novo Nordisk’s pipeline especially given the continued pricing pressure within diabetes care, particularly in the United States (Read more: Novo Nordisk Confirms Bid for Ablynx But Faces Rejection).
Sanofi & Regeneron Boost R&D Investment in Dupixent and Cemiplimab: Sanofi (SNY - Free Report) and partner Regeneron have decided to boost their investment in the development of cemiplimab (a PD-1 antibody) in oncology and Dupixent (an IL-4/IL-13 pathway-blocking antibody) in type 2 allergic diseases. Based on this decision, investment in cemiplimab will shoot up to at least $1.64 billion, an increase of approximately $1 billion from the initial agreement, with both companies contributing equally. Cemiplimab is being studied as monotherapy as well as in combination with other therapies in a wide range of cancers including advanced skin cancers, non-small cell lung cancer, cervical cancer and lymphomas. Regulatory applications for cemiplimab in advanced cutaneous squamous cell carcinoma are scheduled to be submitted in the European Union and the United States in the first quarter of 2018.
Meanwhile, Dupixent, currently approved for eczema, has the potential to be evaluated for additional indications including chronic obstructive pulmonary disease, peanut allergy and grass allergy and in patients who have multiple allergic conditions. This is in addition to ongoing development in pediatric atopic dermatitis, pediatric asthma, eosinophilic esophagitis and nasal polyposis. Regeneron and Sanofi are currently seeking FDA approval for Dupixent in uncontrolled, persistent asthma in patients at least 12 years old.
Another candidate that should benefit from the additional investment is REGN3500, an IL-33 antibody, with potential in atopic dermatitis, asthma and chronic obstructive pulmonary disease.
Development Updates from Merck: Merck provided late-stage data on its anti-PD-1 therapy, Keytruda, as monotherapy for surgically resected high-risk melanoma. Keytruda met the primary endpoint of recurrence-free survival (“RFS”).
Merck also announced that the FDA has accepted its regulatory applications for doravirine, its investigational non-nucleoside reverse transcriptase inhibitor (“NNRTI”) for the treatment of HIV-1 infection in adults. A response from the agency is expected by Oct 23, 2018.
The FDA also granted Breakthrough Therapy Designation to Eisai’s Lenvima (lenvatinib) in combination with Keytruda for the treatment of patients with advanced and/or metastatic renal cell carcinoma (“RCC”). Breakthrough Therapy Designation helps fasten the development and review of drugs which are being evaluated for the treatment of serious conditions and where preliminary clinical evidence indicates that the drug may be substantially better than existing treatments on clinically significant endpoint(s) (Read more: Merck's Keytruda Combo Gets Breakthrough Therapy Status).
Merck’s stock is down 7.4% over the last one year, compared to the 18.1% rally of the industry it belongs to.
The NYSE ARCA Pharmaceutical Index was up 1% over the last five trading sessions. Among major stocks, Johnson & Johnson (JNJ - Free Report) was up 3% while Pfizer declined 0.6%. Over the last six months, Bristol-Myers was up 13.6% while Glaxo declined 9.9% (See the last pharma stock roundup here: Allergan Announces Job Cuts, Pfizer Inks Deals).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
Pharma Stock Roundup: Novo Nordisk Reveals Bid to Acquire Ablynx, Pfizer & Others at Healthcare Conference
Focus this week was on the 36th annual JPMorgan healthcare conference where several biotech and pharma companies provided a preliminary look at their results for 2017 and also provided pipeline updates as well as their outlooks for 2018.
Recap of the Week’s Most Important Stories
Key Takeaways from JPMorgan Healthcare Conference: Several pharma companies were present at the 36th annual JPMorgan healthcare conference, the largest and most informative healthcare investment symposium in the industry. Among key updates, Pfizer (PFE - Free Report) said that it expects 2018 to be a rich data delivery year. Bristol-Myers Squibb Company (BMY - Free Report) also provided a look at its pipeline including opportunities for Opdivo. The company also said that business development remains an important priority with the focus being on deals that make sense from a financial perspective and where the assets and technologies are strategically aligned to its priorities and are potentially transformational. Merck (MRK - Free Report) is also on the lookout for business development deals while exercising financial discipline. The company said that it is looking at opportunities through licensing deals and bolt-on acquisitions to add drugs/technology that address unmet medical needs (Read more: Key Takeaways from Pfizer & 3 Other Drug Stocks at Healthcare Conference). Allergan was also present at the conference with its preliminary financial outlook for 2018 (Read more: Allergan's Sales Guidance for 2018 Lower Than Expected). GlaxoSmithKline (GSK - Free Report) , meanwhile, is looking to strengthen its pharma pipeline by prioritizing its development capital focus on two core (respiratory and HIV/infectious diseases) and two potential therapy (immuno-inflammation and oncology) areas. Glaxo is a Zacks Rank #2 (Buy) stock - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Novo Nordisk Goes Public With Ablynx Proposal: Novo Nordisk (NVO - Free Report) confirmed that it is looking to acquire Belgium-based biopharma company Ablynx. Novo Nordisk had initially proposed to acquire Ablynx for €26.75 per share in cash. However, the company came back with a revised offer when Ablynx rejected the first proposal. Novo Nordisk’s latest offer includes an upfront cash payment of €28 per share plus a contingent value right (“CVR”) worth up to €2.50 per share (total equity valuation of approximately €2.6 billion). This offer, too, has been rejected by Ablynx with the company’s Board announcing that the proposal fundamentally undervalues Ablynx and its growth prospects.
A look at Ablynx’s pipeline shows that the company could well be in a position to launch its first product, caplacizumab (anti-vWF; acquired thrombotic thrombocytopenic purpura - aTTP), this year. Caplacizumab is currently under review in the EU while a regulatory application will be filed in the United States in the first half of 2018. The estimated annual market opportunity for aTTP, a life-threatening blood clotting disease, is expected to be about €1.2 billion. The company also has a broad range of partnerships with the potential to generate more than €10.6 billion in milestones plus royalties. Other pipeline candidates also address significant market opportunities. While currently there are no rumors about additional bidders, the EU approval of caplacizumab could well change this scenario.
As far as Novo Nordisk is concerned, the acquisition would make sense with caplacizumab being a good fit for the company’s hematology portfolio. The deal would also give a boost to Novo Nordisk’s pipeline especially given the continued pricing pressure within diabetes care, particularly in the United States (Read more: Novo Nordisk Confirms Bid for Ablynx But Faces Rejection).
Sanofi & Regeneron Boost R&D Investment in Dupixent and Cemiplimab: Sanofi (SNY - Free Report) and partner Regeneron have decided to boost their investment in the development of cemiplimab (a PD-1 antibody) in oncology and Dupixent (an IL-4/IL-13 pathway-blocking antibody) in type 2 allergic diseases. Based on this decision, investment in cemiplimab will shoot up to at least $1.64 billion, an increase of approximately $1 billion from the initial agreement, with both companies contributing equally. Cemiplimab is being studied as monotherapy as well as in combination with other therapies in a wide range of cancers including advanced skin cancers, non-small cell lung cancer, cervical cancer and lymphomas. Regulatory applications for cemiplimab in advanced cutaneous squamous cell carcinoma are scheduled to be submitted in the European Union and the United States in the first quarter of 2018.
Meanwhile, Dupixent, currently approved for eczema, has the potential to be evaluated for additional indications including chronic obstructive pulmonary disease, peanut allergy and grass allergy and in patients who have multiple allergic conditions. This is in addition to ongoing development in pediatric atopic dermatitis, pediatric asthma, eosinophilic esophagitis and nasal polyposis. Regeneron and Sanofi are currently seeking FDA approval for Dupixent in uncontrolled, persistent asthma in patients at least 12 years old.
Another candidate that should benefit from the additional investment is REGN3500, an IL-33 antibody, with potential in atopic dermatitis, asthma and chronic obstructive pulmonary disease.
Development Updates from Merck: Merck provided late-stage data on its anti-PD-1 therapy, Keytruda, as monotherapy for surgically resected high-risk melanoma. Keytruda met the primary endpoint of recurrence-free survival (“RFS”).
Merck also announced that the FDA has accepted its regulatory applications for doravirine, its investigational non-nucleoside reverse transcriptase inhibitor (“NNRTI”) for the treatment of HIV-1 infection in adults. A response from the agency is expected by Oct 23, 2018.
The FDA also granted Breakthrough Therapy Designation to Eisai’s Lenvima (lenvatinib) in combination with Keytruda for the treatment of patients with advanced and/or metastatic renal cell carcinoma (“RCC”). Breakthrough Therapy Designation helps fasten the development and review of drugs which are being evaluated for the treatment of serious conditions and where preliminary clinical evidence indicates that the drug may be substantially better than existing treatments on clinically significant endpoint(s) (Read more: Merck's Keytruda Combo Gets Breakthrough Therapy Status).
Merck’s stock is down 7.4% over the last one year, compared to the 18.1% rally of the industry it belongs to.
Performance
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
The NYSE ARCA Pharmaceutical Index was up 1% over the last five trading sessions. Among major stocks, Johnson & Johnson (JNJ - Free Report) was up 3% while Pfizer declined 0.6%. Over the last six months, Bristol-Myers was up 13.6% while Glaxo declined 9.9% (See the last pharma stock roundup here: Allergan Announces Job Cuts, Pfizer Inks Deals).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>