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Biotech Stock Roundup: Medivation Gains on Xtandi Strength, Amgen Scores in Late-Stage Study - Analyst Blog

By: Zacks.com
Posted: 5/14/2014 9:46:00 AM
Referenced Stocks: AEGR;AMGN;MDVN;MNKD;NPSP

A major chunk of biotech companies reported first quarter results last week. While some companies like Regeneron ( REGN ) impressed with their results, others like Aegerion ( AEGR ) missed expectations.

Medivation ( MDVN ) Up on Xtandi Performance: Medivation gained 8.5% even though its first quarter results lagged expectations. The main reason behind the positive sentiment was prostate cancer drug, Xtandi's, strong performance. Xtandi's performance helped the company cut loss by half compared to the year-ago period. Moreover, the company raised its guidance for Xtandi which is encouraging - Medivation's initial guidance provided on the fourth quarter call had been disappointing.

Xtandi could very well be a game-changer for Medivation. The prostate cancer market represents huge commercial potential and Medivation has consistently presented impressive data on Xtandi. Earlier last week, the FDA granted priority review to Xtandi for the treatment of chemo-naïve patients. This means a response will be out by Sep 18.

Expansion into the pre-chemo setting would be a major positive for Medivation. The 17-month delay in the time to initiation of chemotherapy should help Xtandi gain share once it is approved for the pre-chemo patient population.

A Closer Look at Vivus' ( VVUS ) Results: Vivus' shares were up 7.2% on the company's better-than-expected first quarter results. However, a closer look at results show that the revenue beat was mainly driven by license and milestone payments. Although anti-obesity pill Qsymia posted significantly higher year-over-year sales, scrips were down sequentially.

This is concerning. Vivus is yet to find a partner for Qsymia, unlike other companies with anti-obesity drugs/candidates like Arena and Orexigen. In fact, Arena's partner, Eisai, is going all out in supporting the promotion of their obesity treatment, Belviq - the company is increasing the sales force for Belviq by 50% to about 600.

This is triple the size of the original sales force when Belviq had been launched. The sales force addition means that now about 90k physicians in the U.S. can be targeted -- almost four times the physician coverage since launch.

Meanwhile, competition in the obesity market could well increase this year with the FDA expected to deliver a decision regarding Orexigen's NB32 (formerly known as Contrave) by Jun 10.

Vivus' woes don't end there -- Actavis is looking to get its generic version of the anti-obesity pill approved. 

NPS Pharma ( NPSP ) Slips on First Quarter Results: NPS Pharma shares slipped on first quarter results which were affected by a weak winter. This led the company to cut its guidance for Gattex by $10 million. The guidance cut did not go down well with investors and shares were down 10.6%. A main focus for investors is the increase in the Gattex discontinuation rate in the first quarter.

Aegerion Cuts Revenue Guidance: Aegerion saw its shares declining 21.6% on disappointing first quarter results. In addition to missing expectations, what was even more disappointing was the revenue guidance cut.

Company/Index Last Week Last 6 Months
AMGN -0.84% -0.62%
BIIB 1.64% 21.10%
GILD 2.64% 18.39%
CELG -0.50% -1.51%
REGN -4.83% -1.29%
ALXN -1.45% 30.18%
^NBI -1.20% 10.80%
^BTK 0.38% 17.60%

* As of May 9, 2014

Other Developments:

Delay in Momenta's Generic Copaxone Launch? Momenta Pharmaceuticals' shares were down 7.6% shortly after the company reported first quarter results. Shares were down on concerns regarding the timing of the company's launch of its generic version of Teva's Copaxone. With a Supreme Court hearing slated to take place in the fourth quarter, there could very well be a delay in the launch of the product.

Regeneron Eyes Pipeline Expansion: Regeneron, which has blockbuster eye drug Eylea in its portfolio, is looking to bring additional eye disease treatments to market. The company is tying up with privately held Avalanche Biotechnologies, which specializes in developing gene therapies for eye diseases.

The deal, worth at least $640 million in the form of upfront and milestone payments, will give Regeneron worldwide rights to eight therapeutic targets for eye disease as well as an option to acquire rights to AVA-101, which is currently in a phase IIa study for wet age-related macular degeneration. Eylea is approved for this indication.

Alexion's Soliris Gets Regular Approval: Alexion has gained regular FDA approval for Soliris for the treatment of adult and pediatric patients with atypical hemolytic uremic syndrome (aHUS), which is a genetic, chronic, ultra-rare disease. This means that the company has fulfilled its post-marketing requirements for the drug which had gained accelerated approval for this indication in Sep 2011. The product label will now contain additional information including long-term data.

Amgen ( AMGN ) Psoriasis Drug Scores in Late-Stage Study: Amgen and partner, AstraZeneca, said that their experimental psoriasis treatment, brodalumab, fared well in a late-stage study. The encouraging results bring Amgen and AstraZeneca a step closer to regulatory filing though two more phase III studies are still ongoing with results due later this year. Brodalumab's success in the first phase III study is good for Amgen which is working on strengthening its product portfolio. According to a recent press release issued by AstraZeneca, analyst estimates for brodalumab range between $0.5 billion - $1.5 billion.

However, the psoriasis market is highly crowded with treatments like Stelara and Otezla among others. Moreover, several companies have late-stage candidates in development for the psoriasis market.

The Week So Far

With first quarter earnings season winding down, most biotech companies have reported results. So far this week, companies like Arena, Halozyme and MannKind ( MNKD ) have reported.

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