Today - Wednesday, March 4, 2015
- Actavis (NYSE:ACT) sold the second-biggest corporate-bond offering in history yesterday, with a $21B deal fueled by investors' desire for income-generating investments when yields on government debt remain low.
- The giant sale comes as companies this year sell debt at the fastest pace on record, extending a multi-year boom that has financed a flurry of deal making and stock buybacks.
- Actavis plans to use the money for its $66B acquisition of Botox maker Allergan (NYSE:AGN).
Tuesday, March 3, 2015
- In a regulatory filing, Arena Pharmaceuticals (NASDAQ:ARNA) discloses that it expects commercial partner Eisai to refile the Marketing Authorization Application (MAA) in Europe for its obesity drug Belviq (lorcaserin HCl) by the end of the latter's fiscal year ending March 31, 2016.
- Arena originally submitted the Belviq MAA in March 2012. In January 2013 it received a Day 180 List of Outstanding Issues from the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP). The major objections preventing approval pertained to non-clinical and clinical issues including tumors in rats, valvuopathy and psychiatric events. CHMP requested that the benefit-risk balance of Belviq be further justified taking these issues into consideration. After a written response to the Day 180 List and an oral presentation to CHMP failed to assuage its concerns, the company withdrew the MAA in May 2013.
- Related tickers: (NASDAQ:VVUS) (NASDAQ:OREX)
- Amarin (NASDAQ:AMRN) Q4 results ($M): Revenues: 16.5 (+63.5%); Operating Expenses: 30.8 (-20.8%); Net Loss: (19.7) (-27.6%); Loss Per Share: (0.11) (+59.3%); Quick Assets: 119.5 (-37.6%).
- Vascepa revenue of $16.5M represented a sequential increase of 17.0% versus Q3. Prescriptions were up 11% sequentially and 55% compared to a year ago.
- Patient enrollment in the REDUCE-IT cardiovascular outcomes trial should be completed this year (8,000 subjects). The study will continue until the attainment of 100% of the 1,612 primary endpoint events which is estimated to happen in 2017 with results ready for publishing in 2018.
- The company does not expect a favorable decision from the FDA regarding its ANCHOR supplemental New Drug Application (sNDA) which had a PDUFA date of December 20, 2013. In September 2014, the agency denied the company's appeal of its decision to rescind the ANCHOR trial Special Protocol Assessment (SPA) and management decided not to appeal further.
- Shares are up 3% after hours on moderate volume.
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- Shareholders of Orexigen Therapeutics (OREX +30.4%) may be popping the corks about now considering their stock is the top gainer in the U.S. today on massive turnover of 81M. The party got started when the company filed an 8-K this morning detailing the results from an interim analysis of a long-term heart safety study of its obesity drug, Contrave (naltrexone HCl/bupropion HCl). Patients treated with Contrave showed a statistically significant reduction in major adverse cardiac events (MACE) compared to placebo.
- The company has included claims in certain Contrave patents (No. 8,969,371) and provisional patent applications (61/913216, 61/914938 and 61/984580) about Contrave's positive effects on cardiovascular (CV) outcomes based on the data in this interim analysis.
- What's not to like? Well, maybe a lot. Forbes reporter Matthew Herper says, per an agreement with the FDA, the interim results should not have been released publicly because it jeopardizes the conclusion of the study. Patients aware of Contrave's purported CV benefits may opt out of the trial in order to get access to drug instead of facing the 50% probability that they are receiving a placebo.
- If the trial cannot be conducted to completion, then the expected FDA clearance of the CV benefit claim will be delayed indefinitely until such time as complete data can be submitted. How long would this be? Orexigen says that a second large, randomized, placebo-controlled study assessing Contrave's effect on CV outcomes should start later this year. The expected completion date? 2022.
- Previously: Orexigen torpedoes shorts on news of Contrave's heart safety benefit (March 3)
- Thinly-traded small cap addiction center operator AAC Holdings (AAC -9.5%) slumps on a 5x surge in volume in apparent response to a bearish article published today on Seeking Alpha by Bleecker Street Research. The author accuses the company of goosing its financials by too-frequent and excessively charged drug testing. It allegedly tests clients 2 - 3x per week instead of the customary 1 - 2x per month and bills payers as much as $1,200 per test, over 10x the cost of a typical screening test.
- The majority of the company's operations is located in Florida, currently Ground Zero for fraudulent billing of abused drug testing services.
- Bleecker sees a 50% downside to AAC's valuation as authorities investigate the firm and due to the end of the IPO lock-up period at the end of the month.
- Orexigen Therapeutics (OREX +53%) short sellers are licking their wounds today. Shares are up on a whopping 22x surge in volume in response to the news that patients taking its obesity med Contrave (naltrexone HCl/bupropion HCl) may reduce their risk of having a heart attack by almost 50%.
- The data behind the news comes from an interim analysis of the 9,000-patient LIGHT study which is being conducted to determine the heart-safety profile of the obesity med. The analysis showed patients receiving Contrave experienced 35 major adverse cardiac events (MACE) compared to 59 for those taking placebo. The benefit was statistically significant. A MACE is a heart attack, stroke or heart-related death.
- The company will conduct a second interim analysis of the data at 50% of events, which should happen in the next several weeks. Orexigen is also required to run a second heart-safety study as a condition of its clearance by the FDA in September 2014.
- Contrave is sold in the U.S. by Takeda Pharmaceutical Co. (OTCPK:TKPHF) (OTCPK:TKPYY).
- According to Yahoo Finance, almost 42% of Orexigen's float (more than 38M shares) was sold short as of February 13.
- Related tickers: (VVUS +4.3%)(ARNA -5.5%)
11:46 AMPotential Afrezza discounts and challenging competitive landscape behind Goldman downgrade of MannKind
- As Ben Levisohn reports, Goldman Sachs analyst Jay Olson downgraded MannKind (MNKD -9.6%) after he revised his valuation model to include net discounts to Afrezza of 40% instead of 20% in light of the downward price pressure from payers to other diabetes product makers.
- He cites the recent launches of Boehringer Ingelheim's Jardiance (empagliflozin) tablets and Eli Lilly's (LLY -1%) Trulicity (dulaglutide injection) that came in 75% below his Q4 estimates. Afrezza's launch trajectory based on script data, albeit early stage, is also falling short of expectations.
- Mr. Olson has lowered his 2025 sales projection 50% for Afrezza to $1B from $2B and reduced EPS estimates from 2017 onward. He believes that MannKind will achieve the sales targets required to capture $925M in milestones from commercial partner Sanofi (SNY -0.1%), however.
- His $3 price target leaves a 50% downside from the current price.
- Previously: MannKind off 10% premarket on Goldman downgrade (March 3)
11:22 AMGlycoMimetics sickle cell VOC candidate reduces time to resolution in study but fails to achieve statistical significance
- A Phase 2 trial evaluating the safety, efficacy and pharmacokinetics of GlycoMimetics' (GLYC +0.8%) GMI-1070 (rivipansel) for the treatment of patients with sickle cell disease hospitalized for a vaso-occlusive crisis (VOC) demonstrated a reduction in time to resolution of VOC but fell short of statistical significance (p=0.187).
- The study enrolled 76 patients in a randomized, double-blind, placebo-controlled trial. After a medical evaluation, they were randomly assigned to receive either rivipansel or placebo by intravenous administration, in addition to other typical treatments for their pain crisis.
- The primary efficacy endpoint was reduction to time of resolution of VOC defined as 1.5 cm sustained decrease in visual analog scale (VAS) pain score from baseline and transition to oral pain medications (or feeling ready to leave or actual time of discharge from the hospital). The median time to resolution of VOC in the rivipansel cohort was 69.6 hours compared to 132.9 hours for placebo (p=0.187). The 47.6% reduction is substantial so its failure to achieve statistical significance is unclear.
- Patients treated with rivipansel showed an 83% reduction in mean cumulative IV opioid analgesic use compared to placebo (p=0.010), one of the secondary endpoints.
- Rivipansel is an investigational selectin inhibitor, specifically E-selectin. Selectins are believed to play a key role in regulating cellular interactions within the blood vessels, thereby mediating intravascular blood flow. The intense pain caused by VOC is believed to be caused primarily by microvascular blockage in the post-capillary venules from the adhesion of white blood cells and the clogging of sickle-shaped red blood cells. This restricts blood flow and causes tissue ischemia and pain. The company licensed rivipansel from Pfizer in October 2011.
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