Acquisitions once again remained in focus this week with Celgene (CELG - Free Report) rumored to be in talks with Juno regarding a possible deal.
Recap of the Week’s Most Important Stories
Juno Soars on Acquisition Rumors: Juno’s shares skyrocketed on reports that Celgene is interested in acquiring the immuno-oncology focused company. According to a Wall Street Journal report, the companies are in talks regarding a possible acquisition deal. If the Juno acquisition rumors turn out to be true, this will be the second acquisition announcement to be made by Celgene this year. Just last week, the company announced its intention to acquire Impact Biomedicines, which is developing fedratinib for myelofibrosis and polycythemia vera.
Celgene is under a lot of pressure to strengthen its pipeline and revenue stream - the company had a tough 2017 with issues like pipeline setbacks as well as the weak performance of Otezla weighing on the stock.
However, it remains to be seen how much Celgene will be willing to shell out for Juno. Juno’s market cap as of Jan 16, 2018 was $5.2 billion. Juno’s shares have been on an upward trend following the $11.9 billion Gilead-Kite acquisition announcement last year in August. With Juno being focused on the development of innovative cellular immunotherapies for the treatment of cancer, the company has long been considered a potential acquisition target. Over the last one year, Juno’s shares are up 139% compared to the 3.3% gain recorded by the industry it belongs to.
Juno’s cell-based cancer immunotherapies are based on chimeric antigen receptor and high-affinity T cell receptor technologies. The company has several cell-based candidates in its pipeline targeting a variety of B-cell malignancies as well as multiple solid tumors and multiple myeloma. Although Juno suffered a major setback with the development of its erstwhile lead pipeline candidate due to safety issues (including patient deaths), the company is now focusing on liso-cel, a next-generation CAR-T cell product that targets CD19. Juno expects to file for FDA approval of liso-cel for relapsed/refractory diffuse large B-cell lymphoma (“DLBCL”) in the second half of 2018. With the immuno-oncology space remaining quite lucrative, Celgene may have to pay a hefty premium to finalize the deal. Juno and Celgene already have a collaboration deal in place.
Concert Down on Patent Challenge Update: Concert Pharmaceuticals (CNCE - Free Report) suffered a major blow with its Post Grant Review (“PGR”) petition challenging the validity of U.S. Patent No. 9,662,335 being rejected by the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. Concert had filed the petition last year in July challenging the validity of the patent that has been assigned to Incyte Pharmaceuticals (INCY - Free Report) . The concerned patent covers deuterated ruxolitinib analogs while Concert’s CTP-543 is a deuterium-modified version of ruxolitinib. Incyte markets ruxolitinib in the United States under the name Jakafi and has patents covering ruxolitinib that may be unexpired if and when Concert seeks marketing approval for CTP-543.
Despite the setback, Concert said that it can always challenge the validity of the patent later in federal court. Moreover, the company said that the decision does not affect its plans to develop CTP-543 for alopecia areata. However, the company is now reassessing its plans for developing CTP-543 for additional indications.
CTP-543 is a novel JAK inhibitor currently in phase II development for alopecia areata. The FDA recently granted fast track status to the candidate for this indication (Read more: Concert Pharmaceuticals Plunges on Patent Petition Setback).
Vertex’s Orkambi Label Expanded in EU: Vertex Pharmaceuticals (VRTX - Free Report) gained EU approval for the use of Orkambi (lumacaftor/ivacaftor) in children with cystic fibrosis (“CF”) in the 6-11 years age group with two copies of the F508del mutation. About 3,400 children in Europe belong to this category. Approval was in-line with expectations considering the company had got a positive opinion from the European Union Committee for Medicinal Products for Human Use (“CHMP”) for this indication in November 2017 (Read more: Vertex's Cystic Fibrosis Drug Ok'd for Pediatric Use in EU). Vertex is a Zacks Rank #1 (Strong Buy) stock - you can see the complete list of today’s Zacks #1 Rank stocks here.
Humira Biosimilar BLA Accepted by FDA: The FDA has accepted for review a Biologics License Application (“BLA”) submitted by Sandoz for its biosimilar version of AbbVie’s blockbuster drug, Humira (adalimumab). Humira is approved for a wide range of indications. At a recent healthcare conference, AbbVie said that global Humira sales crossed $18 billion in 2017 and should approach $21 billion in 2020. The company, which expects the drug to lose exclusivity in international markets in the fourth quarter of 2018, believes that sales erosion will be manageable.
We note that Sandoz is not the first to file for a biosimilar version of Humira. In fact, companies like Amgen (AMGN - Free Report) and Boehringer Ingelheim have already gained approval for their Humira biosimilars. Amgen, which entered into a global settlement and license agreement with AbbVie, expects to launch its Humira biosimilar in Europe in October 2018 and in the United States in January 2023. Meanwhile, AbbVie and Boehringer are engaged in patent litigation in the United States.
Eiger Plunges on Pipeline Setback: Eiger suffered a major setback with its investigational treatment, ubenimex, for pulmonary arterial hypertension (“PAH”) failing to meet the primary endpoint in a mid-stage study. Based on this disappointing update, the company has decided to discontinue the development of ubenimex for PAH though it will continue to evaluate ubenimex for lymphedema. Ubenimex is in a mid-stage study for this indication with data expected in the second half of the year. The company’s shares were down 49.4% on the news.
Medical - Biomedical and Genetics Industry 5YR % Return
The Nasdaq Biotechnology Index was up slightly over the last four trading sessions. Among major biotech stocks, Celgene declined 0.6% while Gilead (GILD - Free Report) gained 2.8%. Over the last six months, Biogen was up 20.7% while Regeneron lost 26.7% (See the last biotech stock roundup here: Celgene to Acquire Impact, J.P. Morgan Healthcare Conference in Focus).
What's Next in the Biotech World?
Watch out for the usual regulatory and pipeline updates. Synergy Pharmaceuticals should get to know about the approval status of Trulance for use in adult patients with irritable bowel syndrome with constipation (IBS-C) by Jan 24, 2018.
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 >>