Medivation (MDVN) has made a rapid come-back since investors exited en masse in mid-June as the company’s closest development-stage competitor was bought by J&J (JNJ). PropThink called the sell-off an over-reaction, and the stock has turned around expeditiously, up 20% and closing in on its 52-week highs.
Immunomedics (IMMU) has been on a tear since early in May, running from $2.50 to a 52-week high of $5.75 last week — the highest this stock has been since 2009. Immunomedics has a long history of underperforming, but Mr. Deryugin revisited the name in March and liked the trade coming into the end of the year. Here’s what we said early in April:
“The stock has remained in a channel since its equity offering in February, but with a fortified balance sheet (the need for capital had pressured IMMU for months) and the AACR meeting this weekend, we expect a breakout above $2.52. That should prompt IMMU to fill its previous gap, and we’re looking for $3 in the near-term, resistance on both the weekly and daily charts.”
The trade has been good for 120%, but an announcement this week regarding a completed Phase Ib trial of 90Y-Clivatuzumab was off-putting. The trial compared 90Y-Clivatuzumab + gemcitabine to Y90-Clivatuzumab alone in patients with metastatic pancreatic cancer. The company called the improved survival in the combination arm encouraging; however it’s a stretch to consider the benefit a result of Immunomedics’ product when 90Y-Clivatuzumab was the constant in the study. The company now plans to initiate a Phase III trial of 90Y-Clivatuzumab by the end of the year. Trial protocol will be telling of how this team operates.
Synageva (GEVA) has eliminated some major risks since January, and we’ve gotten bullish on the orphan drug developer. Back then, we considered patent conflicts a key overhang for the company. Synageva settled this litigation in April and released 12-month data from a Phase II study of sebelipase alfa shortly after, demonstrating continued improvements in patients with late-onset LAL deficiency.
Isis Pharmaceuticals (ISIS) demonstrated a textbook breakout on Friday following a week of consolidation, hitting the $30/share mark and an all-time high for the antisense drug developer. The company now carries a market capitalization of over $3B, and while the move was overdone in our view — it began when ISIS-APOCIIIRx demonstrated an impressive ability to lower triglycerides in patients with type 2 diabetes — ISIS should continue higher following Friday’s price action.
On the flip-side, Amarin (AMRN) may have finally found some temporary support after breaking below $6.00 a few weeks ago. Recall that AMRN tends to rally on a monthly basis as the release of the FDA’s Orange Book approaches every 2nd full week of the month. There’s little reason to expect the FDA to make a NCE decision after so many months of limbo, so while the stock may rally over the next week, a breakdown is likely as the designation fails to materialize yet again. We’re still waiting to average down ahead of the scheduled October advisory panel vote.
The FDA suspended an early trial of Achillion’s (ACHN) sovaprevir combined with ritonavir-boosted atazanavir intended for use in patients with HCV and HIV. Investors punished the stock, but the news isn’t as damming as it seems. This particular patient subset is just that — a fraction of a fraction of the addressable population. You can read more here.
We expect PTC Therapeutics (PTCT) to be a great short candidate further down the road. The company’s lead candidate targets nonsense mutations, specifically in Duchenne Muscular Dystrophy and Cystic Fibrosis, and there’s a pile of evidence against the treatment’s efficacy. Read on.
In connection with MDVN, AMRN, GEVA, ACHN, PropThink has taken a long position.
