In the first and second part of this series, the importance of big pipelines in successful small biotech investing and risk mitigation was discussed. As previously stated, part of a successful risk mitigation strategy is to find companies with robust pipelines. One of the main, if not the main, criteria for successful biotech investing is finding companies with strong, free flowing pipelines with promising drug candidates.
Halozyme Therapeutics (HALO) and Dyax (DYAX) with market capitalizations of $1.20 billion and $143 million, respectively, are two companies that are small, but have big, promising pipelines.
Halozyme Therapeutics
Halozyme, a biopharmaceutical company, develops products that targets the extracellular matrix of cells. This technology allows the company to develop products with new delivery methods or increase the efficacy of approved drugs on the market. This strategy is shared with Antares Pharma (AIS) where existing products are enhanced or new drugs developed using their technology. The products at Halozyme are based on their patented-protected human enzyme technology of hyaluronidases and other enzymes that alters the cellular matrix. Utilizing Halozyme's Enhanze technology, biologics such as monoclonal antibodies and other large molecules are better absorbed and delivered. Halozyme currently has one product, Hylenex recombinant, approved and on the market.
Their pipeline consists of various proprietary products and partnered candidates with some of the biggest players in the biotechnology arena. Halozyme currently has three programs-one in phase 1 and two in phase 3-with Roche (RHHBY.PK). In the HannaH trial, a 596-patient phase 3 study, trastuzumab or Herceptin using Enhanze met its co-primary endpoints, efficacy, secondary endpoints, and demonstrated similar outcomes in HER2 breast cancer patients given subcutaneous injections and intravenous treatments. This is significant as it decreases treatment time in the hospital - from a 30 minute infusion to a 5 minute injection - and medicine preparation time in the pharmacy.
A Biologics License Application for HyQ, a compound partnered with Baxter (BAX), was submitted to the FDA in mid-2011. In studies utilizing Enhanze, HyQ has demonstrated that patients can receive immune globulin through the subcutaneous route at the same frequency and volume as their intravenous dose. If FDA approved, patients can administer IG treatments at home in a cost-efficient manner.
The pipeline at Halozyme is a reflection of their promising technology in the creation of new products and improvement of existing ones.
Product | Partner | Indication | Clinical Trial Status |
Hylenex recombinant | Proprietary | Improved subcutaneous drug delivery | Approved |
Analog insulin-PH20 | Proprietary | Diabetes | Phase 2 |
PEGPH20 | Proprietary | Solid Tumors | Phase 2 |
HTI-501 | Proprietary | Aesthetic Medicine | Phase 1 |
HyQ | Baxter | Primary immunodeficiency | BLA submitted |
Herceptin Sc | Roche | Breast Cancer | Phase 3 |
MabThera Sc | Roche | Non-Hodgkin's lymphoma | Phase 3 |
Actemra Sc | Roche | Rheumatoid Arthritis | Phase1 |
Cinryze | Viropharma (VPHM) | Hereditary angioedema | Phase 2 |
Alpha 1-antitrypsin | Intrexon | Alpha 1-antitrypsin deficiency | Preclinical |
Halozyme has a market capitalization of $1.20 billion and currently trading at $11.52 with a 52-week range of $5.54 - $11.62. The company has approximately $66 million in cash and equivalents with no debt.
Dyax
Dyax, a specialty biopharmaceutical company, utilizes and leverages its phage display technology to discover and develop a variety of lead compounds in which it advances internally or licenses to big pharmaceutical and/or biotechnology companies. Dyax currently has one FDA-approved product, over seven internal programs, and 17 partnered programs.
Ecallantide or Kalbitor is FDA approved for the treatment of hereditary angioedema, a rare, but serious immunologic disorder that causes abdominal cramping and rapid swelling in the areas such as the extremities, face and airways with the latter being potentially fatal.
There are currently four partnered programs that are in phase-3 trials - two with Eli Lilly (LLY) and two with Amgen (AMGN). Four more of the partnered programs are in phase two with companies such as Genentech/Roche, Alexion (ALXN), Biogen (BIIB), and Sanofi-Aventis (SNY).
Phase 2 studies of AMG 479 and AMG 386, partnered compounds with Amgen, have demonstrated promising activity in pancreatic cancer and recurrent ovarian cancer, respectively. Data from phase 2 studies of AMG 479 showed that when given in combination with gemcitabine, median overall survival was approximately 3 months greater than the gemcitabine-alone arm at 8.7 months versus 5.9 months. In the phase 2 study of AMG 386, progression-free survival was increased, but importantly did not result in bowel perforations - a potential complication in the treatment of recurrent ovarian cancer with therapies such as Avastin. Furthermore, Eli Lilly partnered compounds, Imc-1121b and Imc-11F8, have demonstrated promising activity in the treatment of metastatic renal cancer and cancers including colorectal neoplasms, respectively.
Product | Partner | Indication | Clinical Trial Status |
Ecallantide (Kalbitor) | Proprietary | Hereditary angioedema | FDA approved, marketed |
Ecallantide | Proprietary | ACE-inhibitor angioedema | Phase 2 |
Ecallantide | Proprietary | Retinal vein occlusion induced macular edema | Phase 1 |
Ecallantide | Proprietary | Greater than 5 indications | Preclinical |
IMC-1121B | Eli Lilly | Metastatic renal cancer | Phase 3 |
IMC-11F8 | Eli Lilly | Cancer(s) including colorectal neoplasms | Phase 3 |
IMC-A12 | Eli Lilly | Cancer(s) including metastatic, asymptomatic castration-resistant prostate cancer | Phase 2 |
IMC-3C5 | Eli Lilly | Solid Tumors | Phase 1 |
AMG 479 | Amgen | Pancreatic cancer | Phase 3 |
AMG 386 | Amgen | Recurrent ovarian cancer | Phase 3 |
AMG 780 | Amgen | Advanced Solid Tumors | Phase 1 |
ALXN6000 | Alexion | B-cell chronic lymphocytic leukemia, multiple myeloma | Phase 1 |
BIIB 033 | Biogen | Multiple Sclerosis | Phase 1 |
BI-204 | Genentech/BioInvent | Prevention of cardiovascular events | Phase 2 |
MM-121 | Merrimack/Sanofi-Aventis | Advanced solid tumors | Phase 2 |
BI-505 | BioInvent | Multiple myeloma | Phase 1 |
One Compound | Confidential | Confidential | Phase 1 |
Three Compounds | Confidential | Confidential | Phase 1 |
Dyax has a market capitalization of $143 million and is currently trading at $1.45 with a 52-week range of $1.10 - $2.33. The company has approximately $50 million in cash and short-term investments with $56 million in short and long-term debt. On January 4, 2012, Dyax entered into a loan agreement with Cowen Royalty with an initial unsecured loan of $20 million.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: All information is provided for informational purposes only and does not serve as investment advice or an offer of management services. There is no guarantee that the information is accurate. All information is subject to change, amendment, and correction without any notice. Any mention of current and past results does not indicate any future expectations or results. All investments are associated with risks and loss of money. Consult with a professional tax, accounting, legal, and/or investment advisor before making any investment decision.
