Investors should have their eyes on a slew of economic events this month. With that said, the FDA has several important action dates in August. PDUFA dates can cause extreme buying or selling of a particular stock. However, this month the majority of the companies receiving FDA decisions are established companies that may not see these extremes. One important note to make is there will be no Advisory Committee meetings that directly pertain to major publicly-traded healthcare companies in August. Ranibizumab 0.5mg monthly VEGF Trap-Eye 0.5mg monthly VEGF Trap-Eye 2mg monthly VEGF Trap-Eye 2mg every 2 months Maintenance of vision* (% patients losing <15 letters) at week 52 versus baseline VIEW 1 94.4% 95.9%** 95.1%** 95.1%** VIEW 2 94.4% 96.3%** 95.6%** 95.6%** Mean improvement in vision* (letters) at 52 weeks versus baseline (p-value versus ranibizumab 0.5mg monthly)*** VIEW 1 8.1 6.9 (NS) 10.9 (p<0.01) 7.9 (NS) VIEW 2 9.4 9.7 (NS) 7.6 (NS) 8.9 (NS) *Visual acuity was measured as the total number of letters read correctly on the Early Treatment Diabetic Retinopathy Study (ETDRS) eye chart **Statistically non-inferior based on a non-inferiority margin of 10%, using confidence interval approach (95.1% and 95% for VIEW 1 and VIEW 2, respectively) *** Test for superiority NS=not statistically significant
The first PDUFA on August 10th is for Gilead Sciences' (GILD) new HIV-1 treatment Truvada and Tibotec Pharmaceuticals TMC278 (rilpivirine). Keep in mind, Tibotec is owned by Johnson & Johnson (JNJ). Both drugs are currently approved as individual treatments for HIV. Truvada is approved as a fixed dose antiretroviral combining Emtriva and Viread. The pending treatment would combine Emtriva, Viread, and TMC278; which is a nucleoside reverse transcriptase inhibitor. TMC278 was recently approved by the FDA in May 2011. As I expect an approval, it is important to note the original NDA was refused by the FDA due to some problems with the Chemistry, Manufacturing, and Controls (CMC) section of the NDA.
Gilead's share price has been rising slowly since August 2010 and I expect continued slow growth through the FDA decision. If the treatment is approved, I expect a slight blip in the share price, but if Truvada is rejected, we are looking at a 2-5% first day decline for Gilead. In terms of Johnson & Johnson, I expect less of a reaction from the share price either way.
Regeneron (REGN) will be receiving a decision on the companies new wet AMD [Age-related macular degeneration] treatment Eyelea (VEGF Trap Eye) on August 20th. Eyelea requires less doses than the current treatment Lucentis, and achieves the same results. Eyelea will be dosed every eight weeks after an initial monthly dosing for the first three months. Lucentis is dosed every four weeks. The treatment faced an FDA Advisory Committee on June 17th and the committee voted unanimously, 10-0, in favor of Eyelea. One important note to make is that the Advisory Committee hinted at a future post approval trial comparing Avastin with Eylea. However, this will not affect the FDA's decision towards Eyelea because Avastin is not approved in the U.S. for wet AMD. You can read a short synopsis as well as view the table comparing Eyelea and Lucentis by viewing my June catalysts article here. I will provide the table below for those who do not want to view the previous article.
It seems like an approval is headed Regeneron's way for two reasons: First, the company developed the drug well and received positive results. Secondly, because the wet AMD market needs a second drug that doesn't cost $23,000 per year. While Avastin is a fraction of the cost, Avastin is not approved for wet AMD; therefore it should not be considered a wet AMD treatment regardless of the results. This PDUFA should cause Regeneron's stock to move quite a bit because some analysts, such as Deutsche Bank's Robyn Kamauskas, are expecting Eyelea to take at least 15% of the Lucentis market. Longer term investors should take a look at Regeneron because the company filed for approval in the EU and Japan in June.
Shire (SHPGY) will receive the FDA's decision for Firazyr on August 25th. Shire acquired the drug in the transaction of Jerini back in 2008 after the drug received a CRL in April of 2008. Firazyr is intended to treat acute hereditary angiodema; which is simply the swelling of the extremities and airways such as the hands, feet, face, larynx and trachea. The drug is currently approved in the EU and recently received a labeling upgrade. More positive news for Firazyr is an FDA Advisory committee voted 12-1 in favor of approval with regards to safety and effectiveness. Also, the same committee voted 11-2 with regards to self administration practices. However it must be noted one person did not vote in the 11-2 vote. Shire has taken Firazyr a long way since the confusing trial data presented by Jerini that led to the original CRL.
Nupathe (PATH) is the least traded company of the healthcare companies with catalysts this month, with an average volume of about 90,000. Nevertheless, the company's lead product Zelrix will receive a decision from the FDA on August 29th. The treatment is an electric band intended to be worn on the arm. The electrical currents are supposed to transport the common migraine drug sumatriptan into the body. The trials showed the drug met all end points from nausea to less migraine pain. However, I think the FDA's decision will hinge upon whether the arm band led to a placebo effect in all patients. With a population of 530 patients, the placebo effect is highly unlikely. However this is one thing to keep in mind as the action date approaches.
One of the most anticipated PDUFA dates comes August 30th when the FDA makes the decision on Seattle Genetics' (SGEN) Adcetris. Adcetris has been developed for two treatments: One for Hodgkin's Lymphoma for patients who relapse after autologous stem cell transplants, and second for patients with relapsed systemic anaplastic large cell lymphoma (ALCL). Adcetris received 10-0 votes in favor of approval for both forms of lymphoma by an Advisory Committee in July. However the Committee also requested the treatments be regarded as accelerated approval. This means the treatment will most likely be approved with only phase two trials complete. Also, based upon the Advisory Committee, the FDA may provide serious limitations along with a costly phase three trial- which is what Seattle was hoping to avoid. The company did have a third trial in the making, but the FDA shot that trial down, citing the fact that it will most likely fall short of FDA standards. A short note about the details of Seattle's trials for Adcetris can be found in my July catalysts article found here.
The question that remains is what the FDA will decide. Currently the drug is looking strong for approval, but the FDA wants Seattle to provide a plan for the phase three trial prior to August 30th. Also, the limitations placed on the drug will be very important. Since the share price has slid about 18% since the Advisory Committee, if Adcetris receives regulatory approval with extreme limitations until the third trial is finished, the share price may only move a little bit. This means anything worse or better could move the stock accordingly.
The month of August has some very radical drugs that could potentially hit the market. The two biggest drugs would be Adcetris and Truvada. As lymphoma and HIV are both devastating medical conditions. Age-related macular degeneration (AMD) is also very devastating, however wet AMD is a rare condition compared to dry AMD.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
2mg every 2
Maintenance of vision* (% patients losing <15 letters) at week 52 versus baseline
Mean improvement in vision* (letters) at 52 weeks versus baseline (p-value versus ranibizumab 0.5mg monthly)***
*Visual acuity was measured as the total number of letters read correctly on the Early Treatment Diabetic Retinopathy Study (ETDRS) eye chart
**Statistically non-inferior based on a non-inferiority margin of 10%, using confidence interval approach (95.1% and 95% for VIEW 1 and VIEW 2, respectively)
*** Test for superiority
NS=not statistically significant