Pharma Stock Roundup: Is BMY the Next Acquisition Target? Priority Review for PFE, Novartis Drugs

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This week, focus remained on Bristol-Myers BMY with the company making additions to its Board and billionaire activist investor Carl Icahn reportedly acquiring a stake in the company.

Recap of the Week's Most Important Stories

Is Bristol-Myers the Next Takeover Target? According to The Wall Street Journal , activist investor Carl Icahn has taken a stake in Bristol-Myers. As per sources, Icahn views the company as a possible takeover target. So is Bristol-Myers headed for a buyout or a split? The company has been under pressure ever since its immuno-oncology drug Opdivo failed in a lung cancer study last year giving Merck MRK an edge in this market. Over the last one year, Bristol-Myers has underperformed the Zacks categorized Large Cap Pharmaceuticals industry with shares declining 10.4% compared to the industry gain of 6.9% reflecting concerns regarding the future prospects for Opdivo growth as well as the Opdivo-Yervoy combination for first-line lung cancer remain. Competition has also increased for the second-line lung business mainly due to the entry of Tecentriq. Fourth quarter earnings also fell short of expectations and the company cut its adjusted earnings outlook.

Earlier this week, the company appointed three new independent directors to its Board following discussions with JANA Partners LLC which became a Bristol-Myers shareholder in the fourth quarter of 2016 (Read more: Can Carl Icahn Save Bristol Myers Squibb? ). With JANA Partners and Icahn in the picture, expectations are high that there will be major changes in the company including a possible sale.

Priority Review for Pfizer's ALL Drug: Pfizer PFE got priority review in the U.S. for its investigational treatment for adult patients with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL). If approved, inotuzumab ozogamicin would represent a new treatment option for this patient population. A response from the agency should be out in Aug 2017. The candidate is under review in the EU as well. Information provided by Pfizer in the press release shows that the 5-year overall survival rate for patients with relapsed or refractory adult ALL is less than 10%. Meanwhile, the American Cancer Society estimates that 5,970 new cases of ALL will be diagnosed in the U.S. this year (Read more: Pfizer's Leukemia Candidate Gets Priority Review in U.S. )

Pfizer along with Celltrion also presented new data on Inflectra which showed efficacy and safety profiles similar to that of Remicade in patients with moderate-to-severe Crohn's disease (CD). The data was presented at the 12th Congress of the European Crohn's and Colitis Organisation (ECCO). Inflectra is Pfizer's biosimilar version of Remicade and was launched recently in the U.S. where it brought in sales of $4 million while worldwide sales were $192 million in 2016.

On its fourth quarter call, Pfizer had said that it expects initial uptake of Inflectra to remain slow in the first few months in the U.S. but as physicians get comfortable with biosimilars, the rate of uptake should pick pace. Moreover, the recently reported Crohn's disease data should provide a boost.

Novartis Lung Cancer Drug Also Gets Priority Review: Another drug that received priority review this week is Novartis' NVS Zykadia. Novartis is seeking FDA approval for the drug for first-line use in patients with ALK+ metastatic non-small cell lung cancer (NSCLC). Results from a late-stage study had shown that progression-free survival in treatment-naïve ALK+ metastatic NSCLC patients was 16.6 months for Zykadia compared to 8.1 months for chemotherapy.

AstraZeneca Inks Deal for Zoladex: AstraZeneca AZN continues to streamline its portfolio and entered into an agreement with TerSera Therapeutics selling commercial rights to Zoladex in the U.S. and Canada. Zoladex is used for prostate cancer, breast cancer and certain benign gynecological disorders.

The deal will see AstraZeneca getting $250 million upfront, up to $70 million in sales-based milestone payments and double-digit percentage quarterly sales-based payments. Zoladex sales were $816 million in 2016 including $69 million in the U.S. and Canada.

AstraZeneca also provided data on its PARP inhibitor, Lynparza, from a late-stage study in patients with HER2-negative metastatic breast cancer harboring germline BRCA1 or BRCA2 mutations. Patients on Lynparza experienced a statistically-significant improvement in progression-free survival compared to chemotherapy. AstraZeneca intends to work with regulatory authorities to expand Lynparza's label into this indication. Lynparza is currently approved for an ovarian cancer indication and brought in sales of $218 million in 2016.

Glaxo's Relvar Ellipta Positive in Non-Inferiority Study: Glaxo GSK and partner Innoviva's asthma drug Relvar Ellipta fared well in a non-inferiority lung function study, which showed that patients with well-controlled asthma were able to switch to the once-daily Relvar Ellipta from the twice-daily Seretide Accuhaler without compromising their lung function. A treatment that needs to be taken only once a day should improve compliance in patients who find it challenging to follow a twice-daily regimen. Glaxo is a Zacks Rank #2 (Buy) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .


Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

The NYSE ARCA Pharmaceutical Index gained 1.5% over the last five trading sessions with all major pharma stocks recording gains. Lilly LLY was up 3.1% during this period. Over the last six months, Lilly gained 3.8% while AstraZeneca was down 12.8% (See the last pharma stock roundup here: Merck's Alzheimer's Study Halted, Allergan to Buy ZELTIQ ).

What's Next in the Pharma World?

Watch out for the usual pipeline and regulatory updates.

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Astrazeneca PLC (AZN): Free Stock Analysis Report

Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report

Pfizer, Inc. (PFE): Free Stock Analysis Report

Eli Lilly and Company (LLY): Free Stock Analysis Report

Novartis AG (NVS): Free Stock Analysis Report

GlaxoSmithKline PLC (GSK): Free Stock Analysis Report

Merck & Company, Inc. (MRK): Free Stock Analysis Report

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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 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.

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