It was an eventful week for the biotech sector with companies like Regeneron REGN and Intra-Cellular Therapies ITCI presenting data while Summit SMMT shot up on a collaboration agreement with Sarepta SRPT.
Recap of the Week’s Most Important Stories
Summit Shoots Up on Sarepta Collaboration: Summit’s shares shot up 65.9% on the company’s deal with Sarepta granting rights to its utrophin modulator pipeline in Europe, Turkey and the Commonwealth of Independent States for the treatment of Duchenne muscular dystrophy (DMD). The companies will collaborate for the development of novel treatments for DMD. In addition to receiving an upfront payment of $40 million, Summit is entitled to receive up to $522 million on the achievement of ezutromid-related milestones plus escalating royalties. The companies will share R&D costs. Ezutromid is the lead candidate in Summit’s pipeline. Summit’s utrophin modulation technology has the potential to lead to the development of disease-modifying treatments for all DMD patients, regardless of their underlying dystrophin gene mutation.
Summit is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Regeneron Continues to Present Promising Data on Blockbuster Hopeful Eczema Drug: Regeneron and partner Sanofi continue to add to the data supporting their blockbuster hopeful eczema treatment, Dupixent (dupilumab). Detailed data from a couple of phase III studies showed that the primary as well as key secondary endpoints like itch reduction (one of the most burdensome symptoms for eczema patients) and improvement in patient-reported anxiety and depression symptoms were met. These data should support the use of Dupixent as a new treatment option for patients struggling to manage their disease. Dupixent is currently under priority review in the U.S. for the treatment of patients with moderate-to-severe atopic dermatitis with a response expected on Mar 29, 2017. Dupixent is also being evaluated for other atopic or allergic diseases including asthma, eosinophilic esophagitis and nasal polyposis.
Meanwhile, Regeneron’s blockbuster eye treatment, Eylea, came up short in a mid-stage study evaluating Eylea in combination with rinucumab (an anti-PDGFR-beta antibody) for wet age-related macular degeneration. The combination was compared to Eylea monotherapy. The results are a setback for the company’s life cycle management plans for Eylea. Eylea has already clocked $1.6 billion in sales in the U.S. where sales are expected to grow 20-25% in 2016. With the rinucumab combination study failing, focus will now shift to the Eylea-nesvacumab (an anti-angiopoietin 2 antibody) combination studies (Read more: Regeneron's Eylea/Rinucumab Combination Data Disappoints).
Vertex Cuts Orkambi Outlook: Vertex VRTX, which gained FDA approval for the use of its CF drug in children (ages 6 through 11) with two copies of the F508del mutation, cut its 2016 outlook for the treatment. Orkambi was earlier approved for use in people ages 12 and older with two copies of the F508del mutation. With the label expansion, about 11,000 CF patients in the U.S. including approximately 2,400 children in the U.S. are eligible for treatment with Orkambi.
However, despite the label expansion, Vertex lowered its 2016 outlook for Orkambi and said it now expects sales of $950 million - $990 million instead of $1.0 billion - $1.1 billion. Factors like a slower-than-expected launch in Germany, slower-than-anticipated refills in July and August and near-peak penetration in the U.S. led to the lowered outlook (Read more: Vertex Orkambi's Label Expanded in U.S., Outlook Revised).
Intra-Cellular Schizophrenia Data Disappoints: Intra-Cellular Therapies’ shares plunged on top-line data from a late-stage study on its lead pipeline candidate, ITI-007, which failed to meet the primary endpoint in the study conducted for the treatment of schizophrenia. The company, however, plans to meet with the FDA’s Division of Psychiatry Products to discuss the regulatory path for the candidate (Read more: Intra-Cellular Reports Poor Phase III Schizophrenia Data)).
Boxed Warning for Gilead, AbbVie HCV Drugs: The FDA has issued a warning about the risk of hepatitis B virus (HBV) becoming an active infection again in any patient who has or had HBV and is being treated with certain direct-acting antiviral (DAA) medicines for hepatitis C virus (HCV). With some of the HBV reactivation cases leading to serious liver problems or death, the FDA is requiring the addition of a Boxed Warning to the labels of 9 DAA medicines including Gilead’s GILD Epclusa, Harvoni and Sovaldi and AbbVie’s Viekira Pak, Viekira Pak XR and Technivie.
Medical - Biomedical and Genetics Industry Price Index
The NASDAQ Biotechnology Index declined 3.2% over the last five trading days. All major biotech stocks recorded a decline with Regeneron declining 5.8% and Vertex 3%. Over the last six months, Biogen BIIB was up 17.9% while Gilead (GILD) lost 18% (See the last biotech stock roundup here: Amgen's Kyprolis Disappoints, Array Up on Cancer Data).
What's Next in the Biotech World?
Watch out for the usual pipeline and regulatory updates from biotech companies.
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