Incyte (INCY) has been one of PropThink’s most profitable recommendations in the last year. The stock is up nearly 190% since we first began covering the name in July of 2013. This Tuesday Ivan Deryugin laid out his thesis for the road ahead, discussing in detail the evolving competitive landscape and what it means for the stock (of particular note is Geron’s (GERN) imetelstat). 2013 was all about Jakafi’s growth in myelofibrosis; 2014 will be centered on expanding the drug’s label, namely in Polycythemia vera, a blood disorder in which a patient’s bone marrow produces an excess amount of red blood cells. Likewise, the company expects important pancreatic cancer data at ASCO2014. Deryugin noted the addition of Hervé Hoppenot to succeed the retiring Paul Friedman as Incyte’s CEO. Hoppenot comes to Incyte directly from Novartis (NVS), where he served as President of Novartis Oncology. Novartis is Incyte’s primary pharmaceutical partner (Eli Lilly is the other), and the appointment of a top exec at Incyte raises the specter of a closer collaboration. Click here to read the column.
BioDelivery Sciences (BDSI) and partner Endo Health Solutions (ENDP) announced on the 23rd that the second of three phase 3 trials testing one of its lead drug candidates, BEMA buprenorphine, as a treatment for chronic pain has been complete with positive results. BDSI gapped up before trading off into this week on broader weakness and what the market is perceiving as overhangs on the stock. Jake King explained in a note to PropThink Premium readers on Thursday why we’re optimistic about forthcoming events. You can read his recommendation in the report.
This week Sarepta Therapeutics (SRPT) reported data from pulmonary function tests through 120 weeks in the ongoing phase IIb study of eteplirsen in DMD. In addition, an advocacy group (the Jett Foundation) along with a panel of muscular dystrophy researchers met with U.S. lawmakers on Friday to urge accelerated approval for Sarepta’s eteplirsen. Spurred by the 120 week data and the congressional meeting on Friday, SRPT ended the week up 3 points from its lows. Accelerated approval remains a point of debate (as does the clinical activity of eteplirsen) among investors, though we believe that an expedited approval process isn’t as baked into the stock as many might believe. Read more in our most recent update on SRPT, which is up 35% since we suggested buying the stock late last year.
Mr. King wrote extensively about the in-demand IPO Ultragenyx Pharmaceutical (RARE). The company upsized its offering and listed on Friday the 31st to strong initial performance. Admittedly, we completely underestimated how far demand would drive the stock, and RARE is out of what we would consider an appropriate price range at which to buy. The stock has pulled back from a high of nearly $48 (the IPO priced at $21), but at $37, we still suggest being on the sidelines.
A March 10/11 FDA Advisory Committee was delayed on Thursday, meaning that Salix Pharmaceuticals’ (SLXP) Supplemental New Drug Application (sNDA) for Relistor subcutaneous (methylnaltrexone bromide) is stuck in regulatory limbo for a little longer. Relistor was developed by Progenics (PGNX) and licensed to Salix in 2011. Relistor is approved for opioid-induced constipation in advanced patients who are receiving opioids as part of palliative care. The sNDA would extend the drug’s label to include its use in chronic non-cancer pain, a market opportunity that Salix pegs at more than 10 times that of the current label. With such a defined date for the panel, we and many traders had been stalking PGNX for a re-entrance following the news last week that its PSMA ADC, a potential treatment for prostate cancer, didn’t look as good as investors hoped. For now, that trade is off, although we’ll keep PropThink Premium members up to date. Readers who followed us in could have returned 30% on PGNX through late-2014 and early January.
In connection with INCY, SRPT, GERN, and BDSI, PropThink has taken a long position. In connection with PGNX, PropThink has taken a short position.
