With the euphoria that is ASCO 2011 rapidly fading in the rear view mirror, biotech investors are eyeing the road ahead in search of catalysts and opportunities in 3Q 2011. Although many companies presenting data in ASCO are worthy of long-term holdings, investors were no doubt disappointed with some trial data and closed or reduced their positions in many. Known as the “bio run-up method," they may have even closed their positions in the securities during the run up to the event to secure gains and minimize risk. Many traders look for near-term catalysts for quick exits and smaller gains on a long position in a stock. However, the biggest gains can often be made with longer holdings after opening a position well in advance of the catalyst. Consequently, now is a superb time to review some key biotech catalysts for 3Q 2011.
Transcept Pharmaceuticals, Inc. (NASDAQ:TSPT) has a PDUFA date of July 14 for its resubmitted NDA sleep aid, Intermezzo (zolpidem tartrate sublingual tablet with the same active ingredient as Ambien). Intermezzo’s indication is as an as-needed sleep aid for middle-of-the-night usage for patients suffering from insomnia. Although the active ingredient is the same as the already-approved and widely used Ambien, the sublingual formulation is a lower dosage and intended to rapidly absorb into the patient’s system and facilitate sleep while not residing in the biological system long enough to necessitate the seven to eight hours exclusion from being able to drive or perform other tasks. Transcept’s first attempt resulted in a CRL due to some safety concerns over the potential for inadvertently taking more than one dosage per night and over concerns of residual drug being left in the patient’s system that may affect driving and other critical tasks within three to four hours of taking the drug. Transcept’s response to the former claim was a change in the product’s packaging while the latter was addressed via a highway driving study to observe possible residual drug effects on motor skills and mental response. The company’s 2010 10K gives more information on the status of the drug and the company’s financials and should be reviewed closely.
Pacira Pharmaceuticals, Inc. (NASDAQ:PCRX) had a PDUFA date of July 28 for EXPAREL for post-surgical pain management. However, a press release on June 14 stated that the FDA had extended the date to October 28, 2011.
Alexza Pharmaceuticals, Inc. (NASDAQ:ALXA) has a tentative NDA resubmission in late July for its lead product, AZ-004, for reducing agitation in patients with schizophrenia or bipolar disorder. The active ingredient in the Staccato device that emits an aerosol spray to be inhaled by the patient is loxapine, a drug already approved for use as an antipsychotic medication. In a January 18 press release, Alexa noted that it had submitted an information packet to the FDA already addressing the concerns of safety, noting that the pulmonary changes noted in the CRL were likely background events in the patient population and that the extensive and repeated pulmonary testing may have even caused some of the observations. Alexa recently stated that it intends to resubmit the NDA in July of 2011 and expects a PDUFA date in early 2012. There were less significant items mentioned in the CRL that Alexa believes it can address pertaining to "at risk" patients via risk management, and that plan will be included in the NDA resubmission in July. Approval for AZ-004 would not only provide the obvious revenue but would also help legitimize the Staccato device and likely open doors to other indications via other drugs either through Alexza or licensing the product to other companies.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) has a PDUFA scheduled for August 20 for its wet AMD drug, Eylea. Regeneron recently enjoyed a unanimous 10-0 FDA advisory committee vote in favor of Eylea for its wet AMD indication on June 16. Although the FDA is not required to rule in favor of the drug following the advisory committee vote, a unanimous vote is certainly an indication of how the decision might turn out. Regeneron and Bayer HealthCare are collaborating on the global development of EYLEA for the treatment of the neovascular form of age-related macular degeneration (the indication with August 20 PDUFA), central retinal vein occlusion and diabetic macular edema (the latter two indications data reported December 20, 2010). Regeneron will maintain the exclusive rights to the drug in the United States. Bayer HealthCare will market the drug elsewhere and equally share profits from all future revenue with Regeneron and submitted an application for marketing authorization in Europe for wet AMD in June 2011.
NuPathe, Inc. (PATH) has a PDUFA date of August 29 for Zelrix, its transdermal patch for the treatment of migraines. The active ingredient in Zelrix is sumatriptan, the most commonly prescribed drug for migraine treatment. The sumatriptan is administered via NuPathe’s proprietary SmartRelief technology, a controlled delivery technology that uses a mild electrical current to actively deliver medication through the skin in a process called iontophoresis. Not only would an approval provide NuPathe with the obvious financials of a marketed drug, but it would also legitimize its SmartRelief technology, which would likely be utilized to deliver other drugs for the company or for potential licensees. More information on Zelrix may be viewed at the company’s website.
Seattle Genetics, Inc. (NASDAQ:SGEN) and the Takeda Oncology Company, a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (OTCPK:TKPYY) have an exciting August ahead of them with two PDUFA’s on August 30 for brentuximab vedotin. Preceding that date, the company will face the FDA’s Oncologic Drugs Advisory Committee on July 14. The committee will review the company’s Biologic License Application, or BLA, for relapsed or refractory Hodgkin lymphoma and then for relapsed or refractory systemic anaplastic large cell lymphoma (ALCL). Brentuximab vedotin has been granted orphan drug designation by the FDA for the treatment of Hodgkin lymphoma and ALCL. The Hodgkin lymphoma’s pivotal trial benefited from the FDA’s SPA with positive results likely to give a better chance of approval if all primary endpoints are met. Data presented at ASCO for both indications were encouraging, and investors should review this data closely as this may be the last data to be published before the advisory committee meeting.
Adventrx Pharmaceuticals, Inc. (ANX) has a PDUFA date of September 1 for Exelbine, a novel emulsion reformulation of the currently approved generic vinorelbine for non-small cell lung cancer. Adventrx seeks approval for the same indications as Navelbine, a branded formulation of vinorelbine. The company had already received a “refuse to file” letter from the FDA on March 1, 2010. The concerns did not seem insurmountable with the letter identifying only a chemistry, manufacturing and controls (CMC) reason for the refusal to file. The NDA was resubmitted on November 3, 2010 with the CEO stating," Our Exelbine submission includes 12 months of site-specific stability data from our intended commercial manufacturer, which fulfills a request communicated to us by the FDA earlier this year. We believe this submission will be accepted for review in early 2011 and we look forward to working with the agency toward our first product approval."
Events With No Specific Dates Assigned for Q3
Zogenix, Inc. (NASDAQ:ZGNX) said phase 3 data for ZX002 should be available in 3Q 2011. ZX002’s indication is for the treatment of moderate to severe pain in patients requiring around-the-clock opioid therapy. ZX002 is a controlled release formulation of hydrocodone that utilizes Elan Pharma International Limited’s proprietary Spheroidal Oral Drug Absorption System, or SODAS Technology. The SODAS system modifies the release profile of the hydrocodone to provide a consistent 12-hour administration of a drug that is typically given in an immediate-release formulation. ZX002 is also unique in that the formulation contains no other analgesic. Typical formulations of hydrocodone often contain acetaminophen to help enhance longer-term pain management. However, the possibility of possible liver damage with long-term use of acetaminophen is a huge concern with doctors, particularly for those with at-risk patients already having liver or potential liver problems. If approved, the improved long-term safety profile due to the lack of acetaminophen would certainly have a niche market to fit in.
QLT, Inc. (NASDAQ:QLTI) will be completing its phase II trial and data analysis of its latanoprost punctal plug drug delivery system (L-PPDS) in glaucoma patients sometime in 2Q or 3Q 2011. The delivery system is a novel means to apply drugs to the eye through controlled sustained release to the tear film. Historically, this type of plug is used to prevent draining of tears from the eyes in patients with dry eye syndrome and other ailments that may cause the surface of the eyes to be uncomfortably dry. The particular indication for this trial involves the slow-release of latanoprost via the punctal plug for glaucoma patients. Topical latanoprost is known by its brand name, Xalatan, and is manufactured by Pfizer (NYSE:PFE). Of particular note pertaining to the marketing potential for L-PPDS is that annual sales of Xalatan are about $1.6 billion. Even a small piece of that pie would be substantial for a company operating at a loss of $9.6 million for the 1Q 2011. It will have some generic drug competition with Pfizer’s patent on the drug expiring in March of this year and Mylan Inc. (NASDAQ:MYL) already receiving FDA approval to market its topical version of the drug as of April 4.
Cytosorbents Corporation (CTSO.OB) received European Mark CE approval on March 31 for its cytokine filtration device, Cytosorb. The device was approved to remove plasma cytokines in patients with sepsis and respiratory failure. Without a doubt, this is a turning point for the micro-cap company and the revenue from the marketing of the product will be welcome. Investors will be watching closely to get hints as to when U.S. trials will commence. The approval will also open new doors for the company as it patents and makes plans for additional indications possible by simply altering the pore-size and bead size of the particles in the filters. Termed BetaSorb, these other indications and possible indications are on the company’s website. The key upcoming catalyst for this security will likely come in the form of government funding from DARPA (Defense Advanced Research Projects Agency), an agency of the United States Department of Defense responsible for the development of new technology for use by the military. On February 8, 2011 the agency posted a solicitation for “innovative research proposals to manage the life-threatening blood infection known as sepsis.” If one reads Cytosorbents’ description of its Mark CE approved Cytosorb device and then the solicitation, "The goal of the Dialysis Like Therapeutics (DLT) program is to develop a portable device capable of controlling relevant components in the entire blood volume on clinically relevant time scales," the dots can be connected very easily to show how well Cytosorb fits DARPA’s solicitation description. Although no timeframe was given as to when the funding would be awarded, 3Q 2011 is certainly a distinct possibility. The June investor presentation is now available and mentions the DARPA award application and other key company events.
Biodel, Inc. (NASDAQ:BIOD) should soon be completing its phase I trial on BIOD-105 and BIOD-107 in a double-blinded and three-period crossover with Humalog for patients with type 1 diabetes. In this trial, patients will receive one subcutaneous injection of BIOD-105, BIOD-107 and Humalog as a comparator each on separate occasions. This clinical trial will evaluate 18 patients with type 1 diabetes and is expected to be complete in 3Q 2011. Depending on which product looks more promising, Biodel will use data from this trial to support a Phase II trial that is set to begin in 4Q 2011 and a phase III trial, which should begin in 2012. The BIOD-105 and BIOD-107 trial designs are the result of Biodel's meeting with the FDA and are part of its "accelerated development plan" implemented after the company’s other human insulin, Linjeta, was rejected via a complete response letter in November 2010. Trading near its 52-week low before these catalysts, BIOD could become a prime example of the merits of an early security entry and hold through upcoming trials, data presentations, NDA, PDUFA and perhaps even approval.
Disclosure: I have no positions in any stocks mentioned, but I may initiate a long position in CTSO.OB over the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.