Markets

Biotech Stock Roundup: AbbVie to Buy Pharmacyclics, FDA Approves First Biosimilar - Analyst Blog

A generic image of a monitor with Market Analysis displayed
Credit: Shutterstock photo

The big news last week was AbbVie's ABBV decision to acquire Pharmacyclics PCYC . Moreover, the biotech sector will be facing some new challenges with the FDA approving the first biosimilar in the U.S. - Sandoz's (filgrastim-sndz), a biosimilar version of Amgen's AMGN blockbuster drug, Neupogen (filgrastim).

Recap of the Week's Most Important Stories

1. AbbVie announced its intention to acquire Pharmacyclics in a deal worth approximately $21 billion. The acquisition will add Pharmacyclics' Imbruvica to AbbVie's portfolio. Imbruvica, currently approved for four indications, has multi-billion dollar potential and Pharmacyclics is exploring the potential to expand Imbruvica's label into solid tumors.

However, the acquisition price, which is being considered high, has been a topic of discussion ever since the deal was announced. While Imbruvica does represent huge commercial potential, one cannot ignore the fact that revenues will be shared with Johnson & Johnson which has a collaboration agreement with Pharmacyclics.

AbbVie, nevertheless, is positioning Imbruvica as a "pipeline in a molecule" - the treatment is currently in more than 50 studies. AbbVie is obviously looking to bring in drugs that will help replace Humira sales once it loses exclusivity. Last year, AbbVie had announced its intention to acquire Shire but the deal was cancelled due to tax inversion rules. The bottom line is that mergers and acquisitions will continue even if it involves lofty valuations (Read more: Pharmacyclics Set to Be Acquired by AbbVie for $21B ).

2. The FDA approved the first biosimilar in the U.S. - Sandoz's Zarxio - a biosimilar of Amgen's Neupogen. The approval is a landmark decision and follows years of debate regarding the regulatory path for biosimilars. Unlike its pharma counterparts, biotech companies have not been exposed to generic competition in the U.S. But with the approval of Zarxio, the floodgates have opened and focus will remain on companies involved in the development of biosimilars (Read more: Biosimilars the Way Forward: Companies in Focus ).

3. United Therapeutics UTHR gained FDA approval for Unituxin, which targets a type of cancer in children - high-risk neuroblastoma. The company was also given a Rare Pediatric Priority Review Voucher (PPRV) for neuroblastoma which provides United Therapeutics with the opportunity to bring in funds through the sale of the voucher.

For example, Regeneron REGN and Sanofi had purchased a rare pediatric disease priority review voucher from BioMarin and used it for their regulatory application for their PCSK9 inhibitor, alirocumab. The companies had purchased the voucher for $67.5 million.

Gilead GILD is another company that had purchased a voucher - the company bought a Neglected Tropical Disease Priority Review Voucher for $125 million from Knight Therapeutics Inc. So, United Therapeutics has the option of selling its voucher for millions of dollars to interested companies.

4. Ocular Therapeutix, which focuses on the development of treatments for eye diseases, reported positive top-line data on its lead candidate, OTX-DP, for the treatment of ocular inflammation and pain following cataract surgery. Results from another phase III study should be out shortly - positive data would allow the company to move ahead with its plans to file an NDA in the second quarter.

Performance

Over the last five trading days, Regeneron's shares were up the most (2.5%) among major biotechs. While Gilead's shares were down 3.85% during this period, Amgen lost 3.14% reflecting the biosimilar news. Vertex VRTX was the highest gainer (31.03%) over the last six months. Gilead lost 8.68% during this period.

Overall, the NASDAQ Biotechnology Index gained 1.03% over the last five trading days (See the last biotech stock roundup here: Pharmacyclics Up on Buyout Rumors, Celgene Drug Label Expanded ).

Company Last Week Last 6 Months
AMGN -3.14% 11.35%
BIIB 0.34% 24.73%
GILD -3.85% -8.68%
CELG -0.12% 25.76%
REGN 2.50% 19.34%
ALXN -0.67% 9.44%
VRTX 0.50% 31.03%

What's Next in the Biotech World?

Amgen will be presenting abstracts, including data on pipeline candidates under regulatory review like Repatha (cholesterol lowering) and Corlanor (chronic heart failure) at the upcoming American College of Cardiology's Annual Scientific Session. The FDA is also expected to issue a response regarding the approval status of Vertex's cystic fibrosis (CF) drug Kalydeco for use in children with CF two to five years of age with specific gating mutations in their CFTR gene, including the G551D mutation.

Want the latest recommendations from Zacks Investment Research? Today, y ou can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

VERTEX PHARM (VRTX): Free Stock Analysis Report

UTD THERAPEUTIC (UTHR): Free Stock Analysis Report

REGENERON PHARM (REGN): Free Stock Analysis Report

GILEAD SCIENCES (GILD): Free Stock Analysis Report

AMGEN INC (AMGN): Free Stock Analysis Report

ABBVIE INC (ABBV): Free Stock Analysis Report

PHARMACYCLICS (PCYC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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


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

In This Story

VRTX CF GILD REGN UTHR

Other Topics

Stocks