Tag Archives: biotech

2 Hotly Debated Drugs Due For FDA Decisions Next Week

In the week before Memorial Day, the FDA is due to decide whether to approve two of the most divisive drugs in the biotech industry, both of them crucial for the companies that make them, Sarepta Therapeutics and Intercept Pharmaceuticals. Thursday is the deadline for eteplirsen, Sarepta Therapeutics ‘ ( SRPT ) treatment for Duchenne muscular dystrophy (DMD). Just getting to the filing took years of negotiation between Sarepta and the FDA, and May 26 is three months later than the decision was originally supposed to be made. And after all that, Wall Street is placing low odds on the drug’s approval. That’s based mainly on last month’s advisory committee meeting on eteplirsen, which voted 7 to 3 (with 3 abstentions) that the drug’s effectiveness wasn’t adequately proven by Sarepta’s tiny clinical trial. Sarepta stock hit a four-year low of 8, on April 26, as multiple analysts downgraded it on the assumption the drug will be rejected. Nonetheless, DMD is a devastating disease without a current treatment, and the families of the children affected have turned into a formidable lobby to get something on the market — especially after BioMarin Pharmaceutical ‘s ( BMRN ) rival drug Kyndrisa was rejected in January. Some observers say the families’ desperation might be enough to move the agency. Oppenheimer analyst Christopher Marai on May 2 upgraded Sarepta on the grounds that, in the past, the FDA has been more flexible in such cases of unmet need. He also pointed out that the stock was now cheap. Sarepta stock has remained volatile but has steadied somewhat the past couple of weeks. On Friday, shares jumped 8.8%, to 19.15. Intercept’s Liver-Disease Treatment Expected To Get OK A day after the Sarepta decision, Intercept Pharmaceuticals ‘ ( ICPT ) liver-disease treatment Ocaliva is due for a verdict. Ocaliva’s advisory committee vote last month went the opposite way of eteplirsen’s, with the panel unanimously supporting approval for the drug, which treats the rare disease primary biliary cholangitis (PBC). As a result, Wall Street generally expects approval. Bears, however, are still growling about Ocaliva’s safety, which they say could limit the drug’s label. The day after the panel vote, Morgan Stanley analyst Andrew Berens drove down Intercept’s stock with the theory that the FDA would discourage use in patients with advanced cirrhosis. This might affect not only the relatively small PBC market, but also the much, much bigger possibilities for Ocaliva in non-alcoholic steatohepatitis (NASH). Intercept is testing the drug in NASH, and approval wouldn’t be for a couple of years, but it’s a major part of the stock’s bull thesis, as analysts see annual sales in the multi-billions. Intercept stock has been on a downtrend this month, but it rose 2.4% this past week. On Friday, shares closed up 2.2%, at 134.28.

Akorn Rebounds Further As Q1 Meets Views, Big Investor Ups Stake

Specialty drugmaker Akorn ( AKRX ) was up in early trading Tuesday after its belated Q1 earning report met Wall Street’s expectations and a major investor tripled its stake in the firm. Late Monday, Akorn reported its first-quarter results just a week after it announcing Q4 and 2015 results , along with restated 2014 earnings, after a year-long repair of its accounting system. It also affirmed the 2016 guidance it issued last month, calling for at least 80% earnings growth over the previous year, with revenue up 8% to 10%. “Akorn’s guidance continues to exclude new approvals, and to us the growth outlook here is going to be about two things: (i) converting the current pipeline of 86 ANDAs (generic-drug applications) in an environment where we are seeing accelerating FDA approval activity, and (ii) pursuing a strategy of targeting bolt-on deal opportunities,” RBC Capital Markets analyst Randall Stanicky wrote in a research note. Akorn said that adjusted net income rose 20% over the year-earlier quarter to 54 cents a share, in line with analysts’ consensus. Revenue rose 18% to $268 million, also in line. The financial uncertainty cut Akorn’s stock price by two-thirds between its April 2015 high and its March 18 low, but since then it’s climbed nearly 70%. In the stock market today , Akorn stock rose 7.6% in heavy volume, to 29.91, and hit a four-month high. Bloomberg also reported that investment management firm Paulson & Co. has become Akorn’s second-largest shareholder , with $219 million in holdings. The report said Paulson also bought into Endo International ( ENDP ), another specialty pharma that fell out of favor with Wall Street after issuing guidance this month that disastrously missed estimates, with a Paulson spokeswoman saying many specialty pharma stocks have been oversold.

AbbVie’s Biggest Drug Gets Patent Setback; Stock Tumbles

Shares of big pharma AbbVie ( ABBV ) nosedived Monday after the U.S. Patent and Trademark Office agreed to review a challenge to a patent on its best-selling drug. The Patent Trial and Appeal Board accepted a request for inter partes review (IPR) by generic-drug startup Coherus Biosciences ( CHRS ) on patent 8,889,135, or the “methods” patent, for rheumatoid-arthritis treatment Humira. The patent is due to expire in 2025, but if Coherus is successful, it could launch its biosimilar version of Humira earlier. That might not happen too soon, though, since the review normally takes a year and is then open to appeal. AbbVie stock, which had opened flat on the stock market today , abruptly dropped 4% after the news came out mid-morning, to near 60, and ended Tuesday’s session at 60.23, down 3.6%. Coherus’ more lightly traded stock jumped 16%, to 18.85. AbbVie is No. 1 in its Industry Group — find out more at IBD Stock Checkup . Humira is currently the top-selling drug in the world, with $14 billion in sales last year. Coherus is one of several companies developing biosimilars of Humira — others include privately held Boehringer Ingelheim, which has some outstanding IPR requests on several different patents, and Amgen ( AMGN ), whose IPR request on a different Humira patent was denied back in January. Coherus has also filed IPR requests on two other patents. “Keep in mind AbbVie also has methods patents which cover other approved Humira indications, such as Crohn’s (disease), and we would expect additional IPRs/litigation to commence prior to potential biosimilar approvals (Amgen’s Humira biosimilar could be approved later this year),” wrote Evercore ISI analyst Mark Schoenebaum in an email. “Thus, these IPRs will likely be the first of many legal actions against AbbVie’s methods patent estate.”