PropThink published an ASCO 2014 preview early this week, highlighting events that will capture Wall Street’s interest as abstracts are published online and presentations kick off at the end of the month. The preview of the oncology event includes:
- A look at Incyte’s (INCY) Jakafi.
- Discussion of Pharmacyclics’ (PCYC) Imbruvica, AbbVie’s (ABBV) ABT-199, and Gilead’s (GILD) idelalisib in CLL and NHL.
- Timelines for AstraZeneca’s (AZN) AZD9291 and Clovis Oncology’s (CLVS) CO-1686.
- A brief rehash of the PD-1/PD-L1 race.
We also spotlight one under-the-radar micro-cap with early results from a study of its novel oncology therapy to be presented at the event; it’s a good name to have on the radar next week when abstracts go live. The medical meeting kicks off on May 30 and lasts through June 3. Abstract titles were made public on April 21, and abstracts will be available on May 14.
We took a closer look at Albany Molecular Research (AMRI) in early April, and this week the company increased its revenue and EPS guidance alongside first quarter results. The stock is off 6% for the week. We believe Albany Molecular is a compelling long-term opportunity under the guidance of a proven management team. AMRI is in the early innings of a growth by acquisition strategy, which started with Cedarburg Pharmaceuticals last month. For patient investors, it’s worth understanding the thesis. Read our rundown of the company’s first quarter earnings, here.
Emergent BioSolutions (EBS) reported after the bell on Thursday, delivering shareholders a 9% loss for the session. Emergent missed top-line consensus estimates, reporting $54M in revenues versus expectations of $57M. While a miss, we caution investors on selling the news as only two analysts cover the name – a small consensus. Emergent is undergoing pre-licensing processes for Facility 55, a government-funded facility that will almost triple production of the company’s franchise asset, BioThrax. Emergent is on track to wrap things up with Facility 55 in early 2015, after which production of its primary revenue-generating asset will no longer be capacity-constrained. You can read more in our previous research.
We’ve followed XenoPort (XNPT) peripherally for some time as the company takes on an activist-led campaign aimed at altering management’s strategy of both commercializing Horizant (restless leg syndrome) and developing ‘829, Xenoport’s answer to blockbuster Tecfidera (Biogen Idec). It’s still too early to suggest owning the stock, though shares are getting continually cheaper.
Activists contend the small commercial potential of Horizant in Restless Leg Syndrome warrants allocating resources fully to development of ‘829; Xenoport burned $18.7M on SG&A in the quarter and spent $4.7M on R&D. Management has been set on commercializing the drug on its own, a strategy that so far has not been rewarded (rightfully, in our view), by the markets. The company submitted an IND in the first quarter to begin studying ‘829 in patients with moderate-to-severe plaque psoriasis, a trial aimed at informing development of the asset in phase 3 relapsing remitting MS. As an aside, Amgen (AMGN) and AstraZeneca reported on Friday positive phase 3 results for brodalumab in patients with moderate-to-severe plaque psoriasis.
Amarin Corp. (AMRN) posted first quarter earnings on Friday before the open. The Vascepa ramp continues at a methodical and unexciting pace, but what has investors really worried are a mountain of debt and expenses associated with the ongoing REDUCE-IT trial. Amarin continues to suggest that its ability to run REDUCE-IT is in question because the FDA rejected a meaningful label expansion late last year, an approval that would have expanded Vascepa’s label to include the 20% of Americans with mixed dyslipidemia. One saving grace, say Amarin bulls, is the company’s Irish tax domicile, though we believe the number of companies who would be able to take advantage of an Amarin-acquisition for tax purposes is small. Read “Amarin Has Dug Itself a Deep, Deep Hole”, here.
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On or more of PropThink contributors are long INCY, PCYC, AMRI, or EBS.
