Written by Scott Matusow
Today, we list four biopharmaceutical companies that have catalysts events approaching. We expect these company's stock prices to appreciate significantly in the short term as they draw closer to their respective catalysts. However, just because a biotech has an upcoming catalyst event, it does not mean the event will have a positive result. At StockMatusow, we occasionally hedge our stock trades via the option chain buying puts to protect against downside, should we choose to hold our stock position through the catalyst event.
Enanta Pharmaceuticals (ENTA) will be releasing Phase III trial data from ABT-450 for HCV at the 64th Annual Meeting of the American Association for the Study of Liver Diseases (AASLD) on November 3, 2013. ABT-450 is a protease inhibitor designed to treat known resistant Hepatitis C (HCV) mutants. HCV is a virus that causes inflammation of the liver and is usually transmitted between people through bodily fluids. Although HCV usually is symptom-less at the beginning, the virus actually is a leading cause of chronic liver disease. This disease is quite serious, as it is the leading cause of liver death in the United States.
In Phase II clinical testing of ABT-450, the treatment demonstrated high SVR rates of 96%-99% after 12 weeks in treatment-naive patients, or patients who are new to treatment. In addition, SVR rates of 90%-95% were seen in patients after 24 weeks of treatment, reinforcing the treatment's strong efficacy.
The company is planning to present one oral presentation and five poster presentations at the meeting. HCV is a big market, which generates billions of dollars a year in revenues. We believe after looking at ABT-450's Phase II data, that the Phase III data will confirm to be positive. Additionally, Enanta has just begun clinical testing with its anti bacterial pipeline, so we feel that as these clinical trials progress for the company, if proven to be successful, Enanta could end up being a long-term big winner.
Our catalyst trade price appreciation target opinion for Enanta is between $25 and $30 a share.
Vanda Pharmaceuticals (VNDA) faces a Peripheral and Central Nervous System Drugs Advisory Committee (ADCOMM) meeting on November 14, 2013, for the review of the company's New Drug Application (NDA) for tasimelteon, designed for the treatment of Non-24-Hour sleep-wake Disorder (Non-24) in the totally blind. Vanda's tasimelteon NDA is currently under Priority Review by the FDA with an action target date under the Prescription Drug User Fee Act (PDUFA-V) of January 31, 2014.
Non-24 is a chronic circadian rhythm sleep disorder related to abnormal synchronization between the 24-hour light-dark cycle and the endogenous circadian rhythms of sleep and wake propensity. The majority of patients with non-24 are totally blind, and the failure of entrainment is explained by an absence of photic input to the circadian clock. In other words, because the blind do not receive light, a small population of them have their internal clocks set of order, not knowing when to sleep or wake from sleep.
Non-24 is a serious, rare, and chronic circadian rhythm disorder characterized that affects a majority of totally blind individuals, or between 65,000 and 95,000 people in the U.S.
On June 5th, 2013, Vanda presented positive data for tasimelteon.
The drug achieved the primary endpoints of entrainment (synchronizing) of the melatonin (aMT6s) rhythm as compared to placebo and clinical response as measured by entrainment plus a score of greater than or equal to 3 on the Non-24 Clinical Response Scale (N24CRS). Tasimelteon also demonstrated significant improvement versus placebo across a number of sleep and wake parameters.
The upcoming Adcomm for the company is very significant, and if the committee recommends the drug for approval to the Food and Drug Adminstration (FDA), we could see Vanda's stock price double from its current level. Therefore, we expect to see nice price appreciation running into the November 14th date. Our price target opinion for Vanda is $11.75 before the committee meets.
ImmunoCellular Therapeutics (IMUC) expects to present Phase IIb topline data of ICT-107, a dendritic cell vaccine targeting Glioblastoma antigens and cancer stem cells.
According to the company:
We continue to anticipate that in the second quarter the Data Monitoring Committee (DMC) for the ICT-107 phase II trial will communicate its recommendation based on the interim safety and futility analysis. Assuming a favorable outcome, we anticipate completing the trial and having initial top-line results available by the end of this year.
ICT-107 is a dendritic cell-based vaccine, which is designed to work by activating a patient's immune system against specific tumor-associated antigens. This is accomplished by extracting dendritic cells from a patient, loading them with the antigens, and reintroducing them to the patient's body to trigger an immune response. ICT-107 is being studied as a treatment for glioblastoma multiforme (GBM)
GBM is a brain tumor involving glial cells, which accounts for 52% of all functional tissue brain tumor cases and 20% of all intracranial tumors. GBM is rare, with incidence of 2-3 cases per 100,000. If ultimately proved successful through all clinical trials, ICT-107 could reach $700M in peak sales. ICT-107 is a long ways away from this however, but we feel the potential of the drug and subsequent data release should attract biotech catalyst traders and speculation investors. Our price target opinion for this catalyst event is $3.50.
Celldex Therapeutics (CLDX) also expects Phase II data from CDX-110 (rindopepimut), in combination with Avastin for GBM. The company is expected to report the data from this study at the Society for Neuro-Oncology (SNO) Annual Meeting in November 21-24, 2013.
Rindopepimut is designed to target the tumor specific oncogene EGFRv3, a functional and permanently activated mutation of the epidermal growth factor receptor.
In 2012, Celldex announced positive data from 3 Phase II studies on rindopepimut.
In the multi-center Phase 2 ACT III study, the median overall survival is 24.6 months from diagnosis (21.8 months from study entry) and overall survival is 26% at three years. In the Phase 2 ACT II study, the median overall survival is 24.4 months from diagnosis (20.5 months from study entry) and overall survival is 23% at three years. In the Phase 2 ACTIVATE study, the median overall survival is 24.6 months from diagnosis (20.4 months from study entry) and overall survival is 33% at three years.
Celldex has been on a tear in 2013, and we expect this to continue at least onto the catalyst event. If the data release here is positive, the Celldex stock could really fly high. Because of the importance of this data release, we expect to see strong price appreciation in the short term. Our Price target opinion is $32 moving into the catalyst event.
Merrimack Pharmaceuticals (MACK) expects to announce Phase III MM-398 data for second line pancreatic cancer due 4Q 2013/1Q 2014.
MM-398 is a nanotherapeutic consisting of the chemotherapeutic irinotecan, encapsulated in a liposomal sphere. MM-398 is designed to rely on the natural blood flow of the tumor to direct the therapy directly to the site of the cancer and minimize exposure to non-target cells.
In the MM-398 Phase II study, 75% of patients achieved the primary endpoint of 3-month survival rate with a good safety profile, with some patients surviving six months or longer. A few patients survived for more than one year, which is promising.
A positive data announcement for MM-398 would be extremely significant for the company and its shareholders, as the stock price would certainly sky-rocket, perhaps doubling or more. Predicting a catalyst price appreciation target is difficult for this one, as there seems to be a good amount of over-hang in the stock from a recent dual finance deal. However, we would expect short sellers in the stock to begin to cover soon, which could add additional price appreciation into the catalyst event. Our Price target opinion for this catalyst event is $4.75.
Additional disclosure: Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.