The story of the week was Puma Biotechnology’s (PBYI) unexpected success in the phase 3 ExteNET trial, which sent the stock soaring 200% in after hours trading on Tuesday night. The breast cancer study met its primary endpoint, with neratinib producing a 33% improvement in disease free survival when compared to placebo, a hazard ratio 0.67 (p=0.0046). One interesting facet, however: Puma announced just moments before releasing the ExteNET results an amendment to its licensing agreement with Pfizer (PFE), the drug’s original developer, in which the smaller biotechnology company will take over $30 million in R&D expenses and pay the larger company a low- to mid-teens royalty rate on net sales of neratinib. Under the original license agreement, Puma was obligated to pay Pfizer annual royalties of 10 and 20%. Still not clear: whether Pfizer saw the ExteNET results before the re-negotiation.
Earnings in biopharma kicked off with Biogen Idec (BIIB) on Wednesday. The company trounced street expectations, a beat led by $700 million in Tecfidera sales during the quarter that topped consensus for $561 million. Ex-U.S., the recently approved drug produced revenue of $115M compared to expectations for just $75M. Biogen Idec was the first of the four major biopharma companies to report; the beat was a nice start to an earnings season overshadowed by the Fed’s recent comments about biotechnology valuations being “stretched.” Excluding one-time items, earnings came in at $3.49/share, beating expectations for $2.83. BIIB ended the week higher by 10%.
Perhaps most-watched this earnings season, Sovaldi sales at Gilead Sciences (GILD) topped sell-side expectations handsomely, but more importantly, missed buyside expectations (whisper number) by a margin – $3.48B vs $3.5B in the quarter. GILD ended the week flat.
In partnership with PropThink, Dr. Paul De Santis of Alpha BioPharma Advisers, recently outlined his firm’s expectations, long- and short-term for Gilead in a 154-page research report available for purchase here. Dr. De Santis and his team took an in-depth look at the current bear thesis, promulgated primarily by analysts at Morgan Stanley and Goldman Sachs. Alpha BioPharma focused on what they believe are meaningful deficiencies to the bear thesis (including overlooked pipeline assets and emerging market opportunities) from MS and GS, elucidating future treatment trends and presenting a preponderance of medical evidence to essentially rebut what they believe are misrepresentations: For more information, on the report, which includes coverage of GILD for the remainder of 2014, as well as derivative trades, click here.
With just one of the four major biopharma companies yet to report, Amgen (AMGN), on the 29th, the iShares Biotechnology Index (IBB) ended the week in the green, encouraging after a deep sell-off less than seven days ago – though we’re not out of the woods yet.
David Phillips took a look under the hood of OncoGeneX (OGXI) this week, having followed the stock’s precipitous decline earlier this year when custirsen failed a critical phase 3 trial in prostate cancer (No One’s Excited about OncoGeneX, which Makes it Worth a Look). OGXI essentially trades at cash, as custirsen has largely been left for dead by investors and a second pipeline asset, apatorsen, has yet to demonstrate proof of concept. Nonetheless, Phillips outlines why there’s reason to take a deeper dive on OGXI in the near-term.
A second late-stage study of Incyte’s (INCY) Jakafi (ruxolitinib) in polycythemia vera (PV) failed on Wednesday, though the company says the study wasn’t necessary for FDA approval. The phase 3 RELIEF study, testing ruxolitinib in the rare blood cancer failed to achieve statistical significance on its primary endpoint, the proportion of patients with ≥50% reduction in PV symptoms, including tiredness, itching, muscle aches and night sweats. Jakafi produced a 43.4% symptom response rate in the 110-subject trial, while patients receiving hydroxyurea demonstrated a 29.6% response rate. The difference was not statistically significant. The company continues to believe that Jakafi is approve-able in PV based on RESPONSE results, a prior phase 3 PV study that was carried out under a Special Protocol Assessment with the FDA. Read more.
Late Friday evening, AcelRx (ACRX) announced that the New Drug Application for Zalviso, the company’s proprietary patient-controlled analgesic, had been met with a Complete Response letter – rejected. The CRL, according to the company, contained requests for additional information to ensure proper use of the device, including changes to the Instructions for Use and a request for more bench data and data to support the shelf life of the product. AcelRx believes that some of the requests have already been addressed in amendments submitted prior to the CRL, but that FDA has yet to review.
Issues raised by the FDA centered squarely on the device/software components of Zalviso, which were acknowledged risks coming into the approval decision. Nevertheless, the issues should be addressable. AcelRx will host a conference call on Monday morning to provide additional information, though a defined path forward won’t be clear until the company meets with FDA in the coming months.
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