Another Week of Healthcare Trading at PropThink: Here’s the Recap

Sunshine Heart (SSH), in its first ever quarterly conference call on Wednesday, provided more anecdotal evidence that its C-Pulse device is benefitting late-stage heart failure patients. We’ve been long SSH since the company’s April financing, and PropThink Premium Subscribers who followed us in are up 75%. More anecdotal evidence that C-Pulse is working in an open-label Europen study, which will materialize through the end of this year at medical conferences, should continue to catalyze the stock. Here’s Mr. King’s latest update, and here’s why we’re long-term holders. PropThink Premium Subscribers were alerted to the break-out on Monday; the stock closed the week up another 12% from the Monday buy recommendation.

After trading to new all time highs, shares of Regeneron (REGN) sold off nearly 10% following the release of its Q2 results. The numbers were mixed. A closer look from Mr. Ivan Deryugin suggests that the revenue miss isn’t that big of a concern, and Regeneron bolstered investor confidence by readjusting full-year forecasts for Eylea sales from $1.2875 to $1.325 billion, revealing that it would be filing for approval in Diabetic Macular Edema by YE-2013, much earlier than expected. Approval in DME would pave the road for meaningful sales growth for Regeneron’s already-blockbuster product. In light of recent developments, Mr. Deryugin remains bullish on Regeneron.

Continuing with the biotech earnings week, Mr. Napodano took a dive into Depomed’s (DEPO) Q2 report and believes the stock is still undervalued. The launch of Gralise is continuing on a positive note, and top-line success translated to surprise profitability this quarter, with net income of $0.5 million, $2 million better than expected. Mr. Napodano believes that Depomed is worth 50% more as the company continues to execute.

Investors who bought Incyte (INCY) alongside Mr. Deryugin’s July 18 suggestion to buy are up 21% in as many days. Incyte markets the JAK1/JAK2 inhibitor Jakafi for the treatment of myelofibrosis, and has a deep pipeline of mid- and late-stage assets. Jakafi sales in the second quarter came in at $54.1 million, up 82% over the year earlier quarter; management raised 2013 revenue guidance for the product from $210-$225 million to $220-$230 million.

Acadia (ACAD) continues to focus on completing the remaining elements of the pimavanserin Parkinson’s Disease Psychosis development program, steps necessary for the submission of a New Drug Application to the FDA, which is now planned for late in 2014. Mr. Napodano makes a compelling case for being long ACAD, which he’s been suggesting since the stock traded at less than $2.00 – ACAD ended this week at $20.76. Smartly, Acadia discussed on its 2Q conference call how the company is preparing for commercialization while development in PDP, and preparation for an Alzheimer’s Disease Psychosis program, continues.


Synergy Pharmaceuticals (SGYP), in a somewhat surprising move, plans to spin off its FV-100 assets into a separate publicly traded company. ContraVir Pharmaceuticals will be focused on the development of drugs to treat herpes zoster, or shingles, and filed a Form 10 registration statement this week to list on the OTCBB. Shares of the new entity will be issued to SGYP shareholders on a pro-rata base, although timing has not yet been released. Synergy bought the FV-100 franchise from Bristol-Myers Squibb (BMY) in August of 2012. Last week, the GI-drug developer hinted at a multi-trial Phase III program for plecanatide in CIC, which the company says will begin later this year. Click here to learn why we’re long SGYP.

Mr. Napodano updated investors on the goings-on at Durect Corp. (DRRX) this week following the company’s second quarter report. Although the crowd is still focused on Remoxy and Pfizer’s (PFE) next steps, there’s a lot more going on for the small-cap drug developer. Durect closed the week at $1.04 – Napodano’s model suggests fair value at $3.00.

Sales of Amarin’s (AMRN) triglyceride-lowering therapy Vascepa came in substantially below analyst estimates for the second quarter – $5.5M actual vs. $8.4M consensus. Since Vascepa was approved in July of 2012, AMRN has fallen 65%. With an FDA advisory meeting approaching in mid-October for Vascepa in the Anchor indication (patients with high triglycerides (>200 mg/dL and <500 mg/dL) with mixed dyslipidemia), we’ll be getting more involved later this quarter as the supply-demand imbalance shifts in anticipation of the inflectional regulatory event. The Anchor PDUFA date is set for December 20, 2013.

In connection with SSH, REGN, INCY, SGYP, and AMRN, PropThink  has taken a long position.