Daniel Lauchheimer's  Instablog

Earnings

1. Pfizer (PFE) reported that its two new potential blockbuster drugs -- Eliquis, a blood thinner, and Xeljanz, a rheumatoid arthritis medicine -- have not met sales estimates. Eliquis wants to replace warfarin, a generic pill used to prevent strokes, and competes with Boehringer Ingelheim GmbH's Pradaxa, and Bayer (BAYN) and J&J's (JNJ) Xarelto on this front. Xeljanz competes directly with AbbVie's (ABBV) Humira, an injection, and is approved for use after patients fail a first-line therapy, typically methotrexate. Eliquis may generate $613 million in annual sales for Pfizer by 2016, according to the average of three analysts' estimates compiled by Bloomberg. Xeljanz may have $1.6 billion in sales by then, according to the analysts' estimates

M&A etc

1. Carl Icahn continues to wage battles against Forest Labs (FRX) trying to shake up management. Mr. Icahn has criticized current CEO Howard Solomon of trying to install his son as CEO, has pointed out the lack of company vision to replace its two best selling drugs Namenda (AD) and Lexapro (antidepressant), and failure to deal with regulatory issues. Despite these issues, Mr. Icahn and FRX avoided this by agreeing to add Mr. Icahn's representative, Vincent Intrieri to help guide the company in their future plans.

2. Royalty Pharma (RP) raised its offer for Elan (ELN) to $13/share from the previous offer of $12.50. In addition, ELN shareholders would recieve $2.50 of contigent value rights (CVR) if ELN's MS drug -- Tysabri -- reaches certain milestones. RP has made its bid contingent on shareholders rejecting ELN's deals with Therevance (THRX).

3. Quest Diagnostics (DGX) and Hologic (HOLX) inked a 5-year deal to add Hologic APTIMA tests for HPV, chlamydia and gonorrhea, among other infections, to their already established tests for cervical cancer. Additionally, the deals calls for increased collaboration on developing women's diagnostic tests.

4. AstraZeneca (AZN) bought Pearl Therapeutics and its PhIII LABA/LAMA COPD therapy in a $1.15 billion deal. Industry analysts at Berenberg Bank said that Pearl Thera's product would lag behind Novartis' and then GSK's similar products.

5. St. Jude Medical (STJ) invested $40 million in Spinal Modulation, for pain treatment. The device won a CE mark, and got FDA approval for a large scale trial. STJ wants to improve its neuromodulation business, and Axium complements the company's existing line of deep-brain stimulators and spinal modulation implants.

6. In a sharply worded letter, Coppersmith Capital Management (CCM) asked Alere (ALR) to make significant changes to its current business structure. Specifically, CCM asked ALR to exit its Health Information Solutions business, sell its consumer products joint venture with P&G and consider ditching its toxicology unit. CCM figures all that will generate about $3 billion Alere can use to pay down the mounting debt from its expansion binge over the past two years. Furthermore, Coppersmith wants Alere to shave between $50 million and $100 million from its annual costs, restoring spending to pre-expansion levels, and Coppersmith has nominated three board members who could institute the changes. The firm owns about 5.8% of Alere

7. Questcor Pharmaceuticals Inc. (QCOR), a maker of treatments for nervous system disorders, bought the rights to the immune drug Synacthen from Novartis (NVS). Questcor will continue the approval for Synacthen -- an autoimmune and inflammatory conditions treatment in the U.S., where it hasn't been approved, and may sell it in more than three dozen countries abroad. Novartis received $60 million upfront and will get $75 million more and possible milestone payments in coming years

8. Teva (TEVA) and Sun Pharma need to pay Pfizer (PFE) and Takeda (TKPYY) $2.15bn for infringing on the patent of Pfizer's acid reflux drug Protonix. Teva had set aside $670mm for litigation, but will need to pony up a lot more cash to take care of this problem. Out of the $2.15bn, Teva owes around $1.5bn, with the balance going to Sun Pharma

9. The FDA gave its approval to Sanofi's (SNY) Fluzone Quadrivalent, a 4-in-1 influenza vaccine. Analysts forecast sales of Sanofi's product should bring in $384 million in 2022 and predicts compound annual growth of nearly 14%. This vaccine joins SNY's already industry leading vaccine group, which generated $5.5bn in revenues -- tops amongst big pharma. SNY's new drug will compete against GlaxoSmithKline's (GSK) Fluarix Quadrivalent and AstraZeneca's (AZN) MedImmune, but only SNY's drug has approval to treat young children.

10. Amgen (AMGN) cut a $25mm deal with Cytokinetics (CYTK) -- $15mm in cash, and $10mm in stock -- in exchange for the Japanese rights to heart drug, omecamtiv mecarbil, now on the threshold of Phase III testing. CYTK said it could also recieve $50mm in royalties if Japanese regulators approve the drug.

11. Amgen (AMGN) reported positive top line results from one of its PhIII trials for its anti angiogenesis drug for ovarian cancer, trebananib. Trebananib registered 7.2 months of progression free survival, compared to 5.4 months for the control. However, the drug failed to show positive overall survival -- a key measurement the FDA wants to see before approving any new cancer drug. If approved, analysts believe trebananib could generate $300-500mm in top line revenues.

12. A court ordered NuVasive (NUVA) to pay Medtronic (MDT) royalties of 3.75% on NuVasive's CoRoent XL implants and 8.25% on MaXcess retractors. This settlement falls short of MDT's request for 36% royalty for CoRoent XL implant sales and 22% on MaXcess retractors. This settlement will cost NUVA $16mm in 2013, up from the previous estimate of $11mm -- neither having a material effect on NUVA. NUVA and MDT settled a separate part of the suit out of court.

13. ThermoFisher (TMO) priced a $2bn common stock offering, which will help it finance its $13.6bn acquisition of Life Sciences (LIFE). This financing comes in addition to a different $1bn securitization financing, and a $5bn term loan.

Regulatory

1. A government panel called for easing restrictions on Glaxo's (GSK) onetime big-selling diabetes drug Avandia. The FDA put severe restrictions on the ontime $3bn drug in September 2010 following studies which showed a 43% heart-attack increase.

2. Aveo ($AVEO) received a complete response letter from the FDA which concluded that the "inconsistent progression-free survival and overall survival results and imbalance in post-study treatments make the TIVO-1 results uninterpretable and inconclusive when making a risk-benefit assessment necessary for drug approval." To get an approval, the FDA noted, Aveo would have to mount another trial for renal cell carcinoma. However, with the dropping out of partner Astellas Pharma, Aveo might have trouble pulling off the necessary study.

3. US. regulators asked Dynavax (DVAX) for a wider study to assess the safety of the company's hepatitis B vaccine. The agency wants to see a study that goes beyond the 3,500 people Dynavax examined for adverse events in clinical trials, a process that may take months or even years. Advisers to the FDA suggested at a November meeting that Dynavax should study 8,000 to 10,000 patients using the vaccine.

4. Exact Science's (EXAS) Cologuard, the company's colorectal cancer screening test, is now in the FDA's hands, as Exact has turned in the results from DeeP-C, a pivotal 10,000-patient trial. The study found 92% colon cancer sensitivity for Cologuard but reported just 42% sensitivity to precancerous polyps and 66% for polyps two centimeters in size or larger, results that sent Exact's shares into a tailspin on their April 17 announcement, dropping as much as 30% in 24 hours.

5. The Obama administration has decided to stop trying to block over-the-counter availability of the best-known morning-after contraceptive pill for all women and girls. The government's decision means that any woman or girl will soon be able to walk into a drugstore and buy the pill, Teva's (TEVA) Plan B One-Step, without a prescription.

6. Abbott (ABT) has started studies to gain approval for its dissolvable stent, Absorb, in the Japanese markets.

7. Data from a new study showed that patients suffering from RA who took a combination of methotrexate and two other generic pills, a cocktail known as "triple therapy," saw statistically equivalent, or non-inferior disease improvement to patients receiving methotrexate in combination with Enbrel. Despite these findings, many remained pessimistic over whether doctors would change their prescribing habits. As such, revenues from Amgen's (AMGN) Enbrel, AbbVie's (ABBV) Humira, and J&J's (JNJ) Remicade should remain unchanged.

8. St. Judes (STJ) won approval for its newest implanted defibrillators -- Ellipse and SJM Assura. These devices are outfitted with technology that detects electrical shorts and tailors shocks to the patient, but, perhaps most importantly, St. Jude said the implants have been redesigned to cut the odds of lead abrasion, the bête noire behind Riata's recall and Durata's shaky public perception

9. RTI Biologics (RTIX) inked a deal to buy Michigan's Pioneer for $130 million in cash, planning to roll the company's technology into its fleet of implants. The deal will expand RTIX's offerings and distribution network

10. Eli Lilly & Co. (LLY) said it stopped a mid-stage trial of an experimental Alzheimer's drug in a category called beta secretase, or BACE, inhibitors. The therapies help prevent the formation of plaque tangles in the brain called beta amyloid, which is associated with Alzheimer's. Patients in the test showed abnormal liver biochemistry.

11. AbbVie (ABBV) challenged long held beliefs by stating today that it might beat Gilead (GILD) to market in its effort to replace interferon as the standard of care for Hep C patients. Hep C affects about 150 million people worldwide with the market estimated at $20 billion. Analysts polled by Bloomberg project Gilead's drug to have annual sales of $6.03 billion by 2016.

12. The Supreme Court ruled unanimously that parts of Myriad Genetics Inc. (MYGN)'s patents on genes linked to breast and ovarian cancer improperly covered natural phenomena. Other parts, the court said, involve enough human intervention to be eligible for legal protection. MYGN softened the legal blow by claiming that its genetic tests for BRCA-1 and BRCA-2 are still covered by 24 different patents.

13. Eli Lilly (LLY) and Incyte (INCY) reported strong efficacy results from their latest baricitinib test, for RA. LLY seeks to gain approval for a drug similar to PFE's Xeljanz, an oral (as opposed to injectable) RA drug.

Roche's (RHHBY) tried to broaden the label for their blockbuster cancer drug Avastin. Avastin works by starving tumors of their blood supply, a strategy called anti-angiogenesis. The FDA has approved Avastin for colorectal, lung, kidney, and brain cancers. In Europe it also has approval for ovarian and breast cancers -- approval it did not receive from the FDA. Roche wants to expand the label to include glioblastoma and cervical cancer. Roche showed positive results for the cervical drug application, boosting the overall median survival rate to 17 months from 13.3 months for the chemo-only group, and offering higher rate of tumor shrinkage; 48% to 36%.

Bayer (BAYRY) and Onyx (ONXX) tried to broaden the label for Nexavar to include it for treatment-resistant thyroid tumors. The drug took the survival median to 10.8 months from 5.8.

Currently the drug has approval for kidney cancer and liver cancer, with sales of $900mm. According to analysts a broadening of the label would increase revenue by $300mm.

Eli Lilly (LLY) announced that its lung cancer drug Alimta did not hit its primary endpoints of showing improved progression-free survival without grade four adverse events in a comparison study. Lily continues to try and maintain patent protection through a method-of-use patent, but analysts remain skeptical of the success of such an approach.

Bristol Myers (BMY) announced positive results for its PDL-1 immunotherapy drug nivolumab for melanoma. In the study presented close to a third of the patients in the study experienced tumor shrinkage, compared to a historical trend rate of 5% to 10% for Yervoy, the current standard of care. Survival among more than 100 melanoma patients was 16.8 months. Until a few years ago, average survival for advanced melanoma was as little as six months. Additionally, BMS showed a study that Yervoy combined with Sanofi's (SNY) Leukine yielded better results than Yervoy alone. Other companies developing drugs in the PD-1 space include Merck (MRK) and Roche (RHHBY). Targeting the PD-1 receptor unleashes a T-cell attack on cancer cells, essentially deactivating a cloaking mechanism that has prevented an immune response

Amgen showed positive interim PhIII results for its melanoma drug T-Vec. T-Vec's mechanism of action invades tumor cells and then cause them to self-destruct while triggering an immune assault on the cancer

AstraZeneca's (AZN) said that their treatment for melanoma of the eye -- selumetinib shrank tumors in half of all treated patients and doubled progression-free survival. The average time it took for the disease to progress was 15.9 weeks in the selumetinib-treated patients, compared with seven weeks in the temozolomide (standard of care) arm. Melanoma of the eye effects 2,000 patients a year, and has no available cure.

M&A Etc.

1. AZN is paying $12.70 a share for Omthera, or $323 million, along with up to $120 million in contingent value rights, based on the success of Omthera's omega-3 drug Epanova. Will compete with, GlaxoSmithKline (GSK) Lovaza -- $559mm, and Amarin's (AMRN) Vascepa
2. PharmAthene (PIP) sued Siga Technologies (SIGA) because it violated promises to negotiate in good faith over a license for ST-246, an antiviral drug for use in case of a biological attack. In its lawsuit, PharmAthene argued it had a claim to ST-246's profits because it helped fund the drug's development and Siga reneged on promises to grant a licensing agreement. This dispute stems from the fact that Siga won a five-year U.S. government contract for 2 million doses of ST-246 in a deal that could be worth as much as $2.8 billion
3. GlaxoSmithKline Plc (GSK) acquired Okairos AG, a development stage Swiss vaccine company, for 250 million euros ($324 million). Okairos uses viruses to deliver genetic material into cells, stimulating the immune system
4. Amgen (AMGN) has entered into a long-term collaboration with Astellas Pharma (ALPMF) and will form a joint venture with the Japanese drugmaker to provide new medicines in Japan. Amgen will initially own 51 percent of the joint venture and it will become fully owned by the U.S. biotech as soon as 2020, the companies added. The companies will develop 5 Drugs together -- three late stage and two early stage. Late Stage drugs include -- cholesterol medicines called PCS-K9 inhibitors, osteoporosis treatment romosozumab, and gastric cancer medicine rilotumumab. Early stage drugs include -- AMG-337 for gastric cancer, blinatumomab, which is being tested against acute lymphoblastic leukemia and non-Hodgkin's lymphoma. Of note, Gastric Cancer is a particular problem in China. This comes on the heels of Amgen's and Zhejiang Beta Pharma JV to commercialize Amgen's Vectibix for metastatic colorectal cancer, in the Chinese market.
5. Ophthotech has raised $175 million from Novo A/S (NVO) to cover a pivotal late-stage study of its lead drug for wet age-related macular degeneration (AMD), Fovista. $125mm will get NVO royalties in the drug, and $50mm will come in the form of series C financing. In a Phase IIb study with 449 patients, half of the patients recieved Lucentis & Fovista, and half only received Lucentis. Those receiving the combination of drugs had a 60% better letter recognition than those only receiving Lucentis.
6. GE Healthcare ($GE) snatched up Unisyn Medical's ultrasound repair segment. The company's flagship product, FirstCall, can diagnose, repair and test ultrasound probes
7. Sequenom ($SQNM) inked a deal to licence its technology to France's Laboratoire Cerba to expand the reach of the company's MaterniT21 Plus test, designed to noninvasively detect chromosomal abnormalities. The licence applies to France, Belgium, Luxembourg and 9 other countries in the Middle East and Africa
8. Epizyme (EPZM) -- took in ~$90mm in proceeds from an IPO on Friday. Epizyme uses epigenetics-a field of biology based on the idea of turning genes on and off without altering the underlying DNA-to create cancer drugs for small patient groups. As its name suggests, Epizyme harnesses epigenetics to target enzymes with its drugs. Still early stage, but already have partnerships with Roche and Merck for Companion diagnostic, and Celgene and Eisai for the international rights for two of its development drugs
9. Qiagen (QGEN) licenced two biomarkers recently. First, from Columbia University for FGFR-TACC fusion genes, whose expression marks glioblastoma, the most common and aggressive form of brain tumor. Second, from BC Cancer Agency for Y641 mutation of the EZH2 gene, a lymphoma-related flaw. Companion diagnostics are a key growth driver for Qiagen, CEO Peter Schatz said, and the company's personalized medicine business has swelled to about $100 million a year thanks to aggressive biomarker licensing and test development.

Regulatory News

1. GSK gained approval for Tafinlar and Mekinist -- a pair of melanoma drugs. Tafinlar is a BRAF inhibitor for the V600E gene mutation, and will cost $7,600 for a 30-day supply. Mekinist is a MEK inhibitor for the V600E and V600K gene mutation, and will cost $8,700 for a 30-day supply. GSK also received approval for a companion diagnostic test to see if the patient has that mutation. Analysts estimate that each could generate $350 million in revenue. 76,690 Americans will be diagnosed with melanoma this year, with roughly 9,480 dying from the disease
2. Teleflex (TFX) received a CE mark for its GPSCath device, designed to prop open vessels and reduce procedure times for vascular interventions
3. Edwards Lifesciences ($EW) received a warning letter from the FDA over problems at the company's Utah facility Cardiac Surgery Systems business, which manufactures cannulae, cardioplegia catheters. The good news is that the warning letter and its attendant restrictions have no effect on Sapien, Edwards' banner transcatheter heart valve
4. Endo Health's (ENDP) testosterone drug got a CRL, citing safety concerns. The FDA advised that the company add a medication guide and other elements to cut the risk of severe adverse reactions to the injected therapy, according to the company's release. Yet the company saw no mention of additional clinical study requirements, and Endo's chief scientist Ivan Gergel said the company plans to respond to the agency's requests by the end of the third quarter

Earnings News

1. Omnivision (OVTI) reported revenue of $336.2mm, an $18mm beat , and EPS of 17 cents, a 4 cents miss