Biotech Day in Review: Lilly Buys Insomnia-Focused Hypnion

Lilly (LLY) will buy Hypnion, a privately held biotech that specializes in sleep disorder treatments, for an undisclosed sum.

Hyperion has advanced HY10275, a non-addictive drug for transient insomnia, through its Phase II trial, where it met its endpoints. HY10275 is a dual-acting H1/5HT2a compound. In addition, Hypnion, which was founded in 2000, brings with it the SCORE technology for drug discovery.

In other insomnia news, Arena Pharma (ARNA) began a Phase II trial of its new sedative, APD125, a treatment for chronic insomnia and sleep maintenance. The double-blind trial will enroll 100 patients, in a cross-over study that administers both active doses of the drug and placebo in random order for a week, separated by one week to wash out the effects of the previous drug.

Myriad Genetics (MYGN) presented positive results from a Phase II follow-on trial of Flurizan in patients with mild Alzheimer’s disease. The drug was able to stop the progression of the disease in many patients, and sometimes it improved patients’ symptoms. The trial followed patients for two years. Compared to the placebo, patients showed a 67% reduction in their cognitive decline.

In the active cohort, 42% of the patients showed improvement or no decline, a level that only 14% in the placebo group attained. Flurizan is in the middle of two Phase III trials currently. It is a member of the class of drugs known as Selective Amyloid beta-42 Lowering Agents [SALAs]. Myriad climbed 4.5% higher, gaining $1.40 to end at $32.63.

Memory Pharma (MEMY) reported that MEM 1003 failed a Phase IIa trial. The drug was seeking to prove its efficacy for combating acute mania in bipolar disorder. Memory enrolled 84 patients who were randomized to receive either MEM 1003 or a placebo for 21 days, followed by an optional four-week treatment. The endpoint was a comparison with placebo on the number of patients who showed a 50% improvement. Memory gave up 36% of its value, slipping $1.12 to $2.01.

GlaxoSmithKline (GSK) said that its pre-pandemic split antigen H5N1 vaccine was effective against a drifted (or diverse) strain of avian flu, showing that it may protect against more than one strain of the virus. The vaccine was administered along with an adjuvant that greatly increased the antibody response.

Iomai (IOMI) published results showing its vaccine patch was effective against travelers’ diarrhea. The vaccine was given to volunteers who were then exposed to higher levels of enterotoxigenic E. coli bacteria. The volunteers had less diarrhea and were less likely to require IV fluids. Iomai thinks the vaccine will be helpful in the more normal, less toxic conditions of regular travel. A Phase III trial is planned.

Two investment houses, JP Morgan and Deutsche Bank, recommended Amgen (AMGN), pointing out that the giant biotech is now selling at about 12.5 times 2008 earnings, which is lower than the 15 times multiple of big pharma or the 21 times multiple of big biotechs. The news has been bad, they admit, but the reaction has been overdone, given the strong fundamentals of the company. After opening at a 52-week low, Amgen rose modestly, moving up 40 cents to $62.16.

Biotech slalomed between positive and negative territory during the early going, but closed with another loss. The Centient Biotech 200™ dropped 33 points to 3789, a loss of .86%. The S&P 500 was down .94% and Nasdaq was off by 1.15%.

Disclosure: none.