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Pharmaceutical companies with a set Phase III data release date usually have a run-up leading into the release date. I usually try to buy the stocks 3-9 months before the catalyst date to make profit from the run-up. I screened for companies that have a Phase III data release date set for this year. I wrote the Part I of "5 Pharmaceutical Companies With Phase III Clinical Study Catalysts This Year" on August 10. Here is a look at 5 additional companies that I found.

1. ArQule (ARQL) is a biotechnology company engaged in the research and development of next-generation, small-molecule cancer therapeutics. The company's targeted, broad-spectrum products and research programs are focused on key biological processes that are central to human cancers. ArQule's lead product, in Phase II and Phase III clinical development, is tivantinib (ARQ 197), an oral, selective inhibitor of the c-MET receptor tyrosine kinase. The company has also initiated Phase I clinical testing with ARQ 621, designed to inhibit the Eg5 kinesin motor protein, and with ARQ 736, designed to inhibit the RAF kinases. ArQule's current discovery efforts, which are based on the ArQule Kinase Inhibitor Platform, are focused on the identification of novel kinase inhibitors that are potent, selective and do not compete with ATP (adenosine triphosphate) for binding to the kinase.


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Upcoming Phase III catalysts

ArQule and Daiichi Sankyo announced on May 18 that recruitment of patients has been completed in the randomized, double-blind, controlled Phase III MARQUEE pivotal trial of their investigational selective c-MET inhibitor, tivantinib, in combination with erlotinib in previously treated patients with locally advanced or metastatic, non-squamous, non-small cell lung cancer (NSCLC).

The MARQUEE (Met inhibitor ARQ 197 plus Erlotinib vs Erlotinib plus placebo in NSCLC) trial began enrollment in January 2011 and is being conducted under a Special Protocol Assessment (SPA), which was established following agreement with the U.S. Food and Drug Administration (FDA). Tivantinib is currently in Phase III development and has not yet been approved for any indication.

Approximately 1,000 patients have been recruited in MARQUEE from more than 200 clinical sites worldwide. The primary endpoint in the trial is overall survival in the overall intent-to-treat population.

Interim analysis is expected by 2012 year-end and final data expected in mid-2013.

Financials

The company reported the second-quarter financial results on August 2 with the following highlights:

Revenue $11.8 million
Net loss $0.01 per share
Cash $147 million

Outlook

For 2012 ArQule expects net use of cash to range between $39 and $44 million. Revenues are expected to range between $40 and $45 million. Net loss is expected to range between $15 and $20 million. Net loss per share is expected to range between $(0.25) and $(0.33) for 2012. ArQule expects to end 2012 with between $121 and $126 million in cash and marketable securities.

My analysis

The stock has an $8.75 price target from the Point and Figure chart. The stock has seen insider buying by four different insiders during June 2012. The company's cash resources will be sufficient to finance its operations through 2014.

2. Santarus (SNTS) is a specialty biopharmaceutical company focused on acquiring, developing and commercializing proprietary products that address the needs of patients treated by physician specialists. The company's current commercial efforts are focused on GLUMETZA (metformin hydrochloride extended release tablets) and CYCLOSET (bromocriptine mesylate) tablets, which are indicated as adjuncts to diet and exercise to improve glycemic control in adults with type 2 diabetes, and on FENOGLIDE (fenofibrate) tablets, which is indicated as an adjunct to diet to reduce high cholesterol.

Santarus has a diverse product development pipeline. A New Drug Application for UCERIS (budesonide) tablets for induction of remission of mild to moderate active ulcerative colitis is under review by the U.S. Food and Drug Administration with a response expected in October 2012. The pipeline also includes two late-stage investigational drugs in Phase III clinical studies: RUCONEST (recombinant human C1 inhibitor) for treatment of acute attacks of hereditary angioedema and rifamycin SV MMX for treatment of travelers' diarrhea. In addition, the company's investigational monoclonal antibody, SAN-300, is being evaluated in a Phase I clinical program.


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Upcoming milestones

Gerald Proehl, president and chief executive officer of Santarus commented on August 7:

"We are looking forward to several key regulatory and development milestones in the second half of the year, the most important of which is the October 16th U.S. Food and Drug Administration (FDA) target action date for UCERIS for the induction of remission of mild to moderate active ulcerative colitis. We are working on a number of activities to prepare for the commercial launch of UCERIS in early 2013, subject to the receipt of FDA approval. We also expect top-line data from two Phase III studies in the second half of the year, including data from our development partner for RUCONEST in treating acute attacks of hereditary angioedema and data evaluating rifamycin SV MMX for the treatment of travelers' diarrhea."

Financials

The company reported the second-quarter financial results on August 7 with the following highlights:

Revenue $47.2 million
Net income $3.4 million
Cash $72.1 million

Outlook

Santarus affirmed that it expects to report total revenues of at least $200 million for the full year in 2012.

The company's expense estimates are as follows:

  • License fee expenses that will include a $10 million milestone payable to Pharming Group NV subject to successful completion of the ongoing Phase III clinical study for RUCONEST in treating acute attacks of hereditary angioedema; and
  • The R&D expense estimate is lowered to approximately $28 million to $30 million from the prior estimate of $30 million to $32 million based on slower than anticipated enrollment in the UCERIS Phase IIIb clinical study, which accounts for roughly half of the R&D expense estimate.
  • Santarus expects the decrease in R&D expenses to be offset by increased spending in SG&A as the company prepares for the launch of UCERIS, subject to FDA approval.

The company affirmed net income guidance of approximately $8 million to $11 million, which includes the impact of the approximately $4 million success-based regulatory milestone expense in the first quarter related to UCERIS and the anticipated $10 million expense for the success-based milestone for RUCONEST mentioned above. In addition the company affirmed adjusted EBITDA of approximately $24 million to $29 million.

My analysis

The stock has a $10.25 price target from the Point and Figure chart. The stock has seen more insider selling than buying since 2006. I would be looking to be a buyer around $5 level if we do get a pullback.

3. Vical (VICL) researches and develops biopharmaceutical products based on its patented DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. Potential applications of the company's DNA delivery technology include DNA vaccines for infectious diseases or cancer, in which the expressed protein is an immunogen; cancer immunotherapeutics, in which the expressed protein is an immune system stimulant; and cardiovascular therapies, in which the expressed protein is an angiogenic growth factor. The company is developing certain infectious disease vaccines and cancer therapeutics internally. In addition, the company collaborates with major pharmaceutical companies and biotechnology companies that give it access to complementary technologies or greater resources. These strategic partnerships provide the company with mutually beneficial opportunities to expand its product pipeline and address significant unmet medical needs.


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Upcoming Phase III milestones

In the company's Phase III registration trial of Allovectin in patients with metastatic melanoma, data collection for the primary endpoint (response rate at 24 weeks or more after randomization) is completed and independent adjudication is ongoing. The company expects to reach the target number of death events for the secondary endpoint (overall survival) in late 2012, and to release top-line data for both endpoints as soon as practical after that.

Financials

The company reported the second-quarter financial results on August 1 with the following highlights:

Revenue $1.6 million
Net loss $7.9 million
Cash $97 million

Outlook

CFO, Jill Broadfoot, commented during the second-quarter earnings call:

We remain on track with our full-year 2012 cash burn forecast of $17 million to $22 million and believe we have sufficient capital for our planned activities through at least the end of 2013.

My analysis

The latest insider buys in the stock were in January 2012 and the latest insider sells were in July 2009. I believe the stock is a good runup candidate for the late 2012 Allovectin Phase III data release.

4. Spectrum Pharmaceuticals (SPPI) is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in oncology and hematology. Spectrum currently markets two oncology drugs ─ FUSILEV (levoleucovorin) for Injection in the U.S. and ZEVALIN (ibritumomab tiuxetan) Injection for intravenous use, for which the company has worldwide marketing rights. Spectrum's strong track record in in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified, and growing pipeline of product candidates in advanced-stage Phase II and Phase III studies.


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Upcoming Phase III milestones

Rajesh Shrotriya, Chairman, Chief Executive Officer of Spectrum Pharmaceuticals commented during the second quarter earnings call:

Let me say a few words about belinostat. Belinostat is currently in a registrational trial. We call it the BELIEF Study, and this study is being run under an SPA from the FDA. It is a monotherapy for relapsed and refractory PTCL. We expect top line data from the pivotal trial in -- sometime in the fourth quarter.

More information about Belinostat can be found from the Spectrum's site.

Financials

The company reported the second-quarter financial results on August 8 with the following highlights:

Revenue $68.7 million
Net income $0.29 per share
Cash $278.5 million

Potential Catalysts for the Second Half of 2012

FUSILEV

  • Continue to expand market penetration.

ZEVALIN

  • Grow ZEVALIN sales through worldwide expansion.
  • Report early results from investigator-initiated study comparing ZEVALIN with rituximab maintenance in NHL (ZAR study).
  • Commence pivotal ZEST study assessing 2-year overall survival and progression-free survival in DLBCL patients 60 years and older.
  • Expand head-to-head study of a single ZEVALIN vs. rituximab maintenance in follicular non-Hodgkin's lymphoma (RoZettastudy).

Late-stage Drug Candidates

  • Belinostat: Topline data expected in Q4 from pivotal trial in relapsed refractory peripheral T-cell lymphoma (PTCL).
  • Apaziquone: Expect to meet with the FDA in Q4.

Earlier-stage Development Pipeline

  • Report topline clinical data from Renazorb.
  • Initiate a Phase II study for SPI-1620.
  • Initiate a Phase II study for SPI-2012.

Business Development

  • Anticipate closing Allos Therapeutics acquisition.

My analysis

The stock has seen more insider buying than selling since 2004. Most of the insider selling has been this year. Brian Nichols wrote an article about Spectrum Pharmaceuticals on August 9. I mostly agree with Brian Nichols.

5. AcelRx Pharmaceuticals (ACRX) is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain. AcelRx's lead product candidate, the ARX-01 Sufentanil NanoTab PCA System, which is currently in Phase III clinical development, is designed to solve the problems associated with post-operative intravenous patient-controlled analgesia which has been shown to cause harm to patients following surgery because of the side effects of morphine, the invasive IV route of delivery and the inherent potential for programming and delivery errors associated with the complexity of infusion pumps. AcelRx has two additional product candidates which have completed Phase II clinical development: ARX-02 for the treatment of cancer breakthrough pain, and ARX-03 for mild sedation, anxiety reduction and pain relief for patients undergoing painful procedures in a physician's office. A fourth product candidate, ARX-04, is a sufentanil product for the treatment of moderate-to-severe acute pain, and AcelRx plans to initiate a Phase II study funded by a grant from USAMRMC, contingent on approval of the proposed clinical protocol for the study by USAMRMC.


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Upcoming Phase III milestones

Richard King, President and CEO of AcelRx commented on August 9:

"AcelRx continues to successfully execute its product development plans. We have initiated and are actively enrolling in two ARX-01 Phase III clinical trials, which are expected to report top-line data in the fourth quarter of 2012. We also expect to initiate our third Phase III study in the third quarter."

Financials

The company reported the second-quarter financial results on August 9 with the following highlights:

Revenue $0.2 million
Net loss $7.2 million
Cash $31.9 million

Financial outlook

AcelRx anticipates that research and development expenses for the remaining two quarters of 2012 and into 2013 will increase as AcelRx seeks to execute and complete three Phase III clinical trials with ARX-01. Development of ARX-04 through Phase II clinical work and Phase III preparatory work is expected to be funded by a grant from USAMRMC, contingent on approval of the proposed clinical protocol for the study by USAMRMC. The development of ARX-04 beyond Phase II and initial preparations for Phase III is dependent on the identification of sources of additional funding. Additionally, AcelRx anticipates modest increases in general and administrative expenses due to costs associated with operating as a public company and expansion of its corporate infrastructure to support ongoing development of its product candidates.

AcelRx believes its current cash, cash equivalents and investments are sufficient to fund operations into the second quarter of 2013.

My analysis

I wrote an article about AcelRx on July 30. The stock has only seen insider buying no selling since February 2011.

Source: 5 Pharmaceutical Companies With Phase III Clinical Study Catalysts This Year - Part II