Biotech Stock Roundup: HCV Back in Focus - Idenix, Achillion Soar - Analyst Blog

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Last week, hepatitis C virus (HCV) treatments were a focus area with Merck's announcement regarding its intention to acquire HCV-focused biotech Idenix ( IDIX ) grabbing eyeballs, especially given the hefty valuation. Needless to say, Idenix shares shot up. Another company that benefited from this news is Achillion Pharmaceuticals ( ACHN ) which is now being touted as a potential takeover target thanks to its HCV pipeline.

Idenix Skyrockets on Acquisition News: Shares of Idenix skyrocketed 229.05% on news that the company will be acquired by pharma giant, Merck. Merck's offer price of $24.50 per share in cash was more than three times the company's share price before the offer was announced. The acquisition, slated to close in the third quarter, is valued at about $3.85 billion. This is an excellent deal for Idenix, which has had its share of pipeline setbacks.

Good Times for Achillion: Achillion's shares soared significantly over two consecutive days - 47.6% on speculation that it could be a takeover target like Idenix and 83.3% on the lifting of a clinical hold on its NS3/4A protease inhibitor, sovaprevir.

Sovaprevir was placed on clinical hold in Jun 2013 when elevated liver enzyme levels were noted. However, a partial clinical hold remains on multiple dose studies that may be conducted in healthy volunteers - for this the company will need the FDA to review and approve the protocol.

The lifting of the clinical hold is a huge positive for this HCV-focused company and has raised expectations even further that the company will be acquired. HCV is a hot development area for pharma and biotech companies. More than 150 million people are estimated to be HCV-infected across the world - this includes more than 5 million people in the U.S.

With 75% of the HCV population remaining undiagnosed, the commercial potential in this market is huge.

Receptos Gains on Promising Data: Receptos' shares are up a whopping 36.8% on positive mid-stage data on its experimental multiple sclerosis treatment, RPC1063. The company reported an 86% reduction in brain lesions in both doses evaluated in the study. The experimental drug is currently in phase III studies and if approved will target the highly lucrative oral multiple sclerosis market which currently has treatments like Novartis' Gilenya and Biogen's Tecfidera among others.

Nektar ( NKTR ) Soars on FDA Panel Vote: Shares of Nektar were up more than 10% on a much-awaited FDA panel vote. The FDA panel said that cardiovascular outcomes studies are not needed for the peripherally-acting mu-opioid receptor antagonist (PAMORA) class of drugs. Nektar's Movantik, which is under FDA review for opioid-induced constipation (OIC) for patients with chronic non-cancer pain, belongs to this class of drugs. The panel recommendation is a major positive as it saves the company from conducting additional studies which would have delayed the approval process and increased the cost burden.

Geron Gains as FDA Lifts Partial Hold: Geron's shares were up 21.15% on news that the FDA has lifted the partial clinical hold on an investigator-sponsored study of imetelstat. While the lifting of the partial clinical hold is a step in the right direction, the full clinical hold on imetelstat remains in place. Imetelstat is the only candidate in Geron's pipeline - visibility as to when the company can commence its own studies remains low. Even if imetelstat studies continue, concerns about liver function test abnormalities could limit the commercial potential of the candidate and restrict its long-term usage.

Orexigen ( OREX ) Obesity Drug Approval Date Pushed Back: Orexigen investors, who were gearing up for approval of the company's obesity treatment, NB32, received a jolt last week with the FDA pushing back the action date by three months to September. Shares were down about 14.7%. The sell-off was maybe slightly over done considering the delay was announced so that the company and the agency can come to an agreement regarding post-marketing commitments.

Company/Index Last Week Last 6 Months
AMGN -1.52% 4.55%
BIIB -2.38% 12.59%
GILD -2.03% 13.05%
CELG -0.82% -2.98%
REGN -1.59% 13.61%
ALXN -3.80% 32.37%
^NBI 0.65% 14.88%
^BTK 1.68% 21.84%

*As of Jun 13, 2014

Other Developments:

Dendreon CEO to Leave Mid-August: Dendreon, which is going through challenging times, said that CEO John H. Johnson will be leaving mid-August. Finding a replacement could prove challenging considering the tough times faced by the company. Dendreon's sole marketed product, Provenge, has been struggling to pick market share. Provenge sales fell 12.8% in 2013 and the current run rate implies sales will remain lackluster. More importantly, Dendreon has some debt repayments due this year as well as in 2016. While the current cash balance is sufficient to pay off the $27.7 million due this year, the main concern is the debt repayment due in 2016.

Isis Earns Couple of Milestone Payments: Isis continues to progress with its pipeline and earning milestone payments related to the same. The company earned two milestone payments this week - one from Biogen and the other from AstraZeneca both on the initiation of phase I studies.

Natpara Advisory Panel Date Pushed Back: NPS Pharma said that the advisory panel meeting for Natpara will be held tentatively on Sep 12 instead of Jul 24. However, the FDA action date of Oct 24 remains the same. NPS Pharma is looking to get Natpara approved for the treatment of hypoparathyroidism - this is a rare endocrine disorder characterized by insufficient levels of parathyroid hormone.

Agios Gains on Celgene ( CELG ) Move: Agios shares were up 5.9% as partner Celgene opted to acquire development and commercialization rights to experimental leukemia drug, AG-221.

The Week So Far

Orphan Drug Status for Alexion's ( ALXN ) Soliris: The FDA has granted orphan drug status to Soliris for the treatment of myasthenia gravis (MG), a rare, debilitating neurologic disorder. Soliris, Alexion's only marketed product, is approved for two rare diseases - paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. Soliris is being studied for several additional indications including MG.

GW Pharma Shoots Up: GW Pharma saw its shares shooting up 16.3% on encouraging data on its experimental epilepsy treatment, Epidiolex.

Vertex Down on Analyst Observations: With Vertex expected to present data on its cystic fibrosis drug, Kalydeco, from two important studies -- TRAFFIC and TRANSPORT -- soon, investors remain jittery. So when Bernstein analyst Geoffrey Porges said that these studies are likely to fail, it was not surprising to see the shares go down 8.67%. Vertex, which recently disclosed that it will no longer invest in its HCV portfolio, is betting heavily on its cystic fibrosis franchise for growth.

Another Multiple Sclerosis Success for Biogen ( BIIB ): Biogen and parent AbbVie reported positive top-line phase III results on their experimental multiple sclerosis drug, daclizumab. With these results, the companies can now move ahead with regulatory filings for the once-monthly treatment.

Endocyte-Merck Part Ways: Endocyte and Merck are parting ways with the former regaining global rights to its experimental cancer drug, vintafolide. Merck said that it does not intend to pursue development of the candidate. Merck's decision does not really come as a surprise - in May, Endocyte said that a phase III study (PROCEED) being conducted with vintafolide will be halted on the recommendation of a data safety monitoring board (DSMB).

Then a few days later, Endocyte and Merck withdrew their marketing applications for vintafolide plus a couple of companion imaging components in the EU.

The Good and Not-So-Good for Gilead: Gilead had two updates about its blockbuster HCV drug, Sovaldi.  First the good news - Sovaldi plus ledipasvir performed exceedingly well in a phase III study in Japan conducted in HCV patients. The combination will be filed for approval in Japan by year end. The not-so good news is that NICE (the National Institute for Health and Care Excellence), the healthcare guidance body in the UK, has asked Gilead to provide more information on Sovaldi.

Bluebird Gains on Positive Data: Bluebird started the week on a positive note with shares shooting up 32.1% on positive data on its experimental gene therapy, LentiGlobin BB305, for beta-thalassemia.

Later this week, the FDA will decide whether it should approve Cubist's experimental anti-infective drug - Sivextro. Chances of gaining approval look high.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MG , ALXN , OREX , CELG , BIIB

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