5 Healthcare Stocks of Interest This Week

by: Alex Shadunsky

These five healthcare stocks have been in the news this week following company announcements.

Nektar Therapeutics (NKTR) announced positive news from Europe. The company said that the European Medicines Agency Committee for Orphan Medicinal Products (COMP) issued a positive opinion on its application for orphan medicinal product status for the company's lead oncology candidate, NKTR-102, for the treatment of women with ovarian cancer.

Nektar has a multi-national Phase 2 study ongoing for NKTR-102 that is enrolling approximately 125 patients with platinum-resistant ovarian cancer whose disease has progressed following treatment with pegylated liposomal doxorubicin (PLD) therapy. In addition, Phase 3 planning is also underway for NKTR-102 in ovarian cancer.

Nabi Biopharmaceuticals (NABI) tumbled 66% on Monday after it announced that NicVAX (Nicotine Conjugate Immunotherapeutic) did not meet its primary endpoint in the company's first of two confirmatory Phase III clinical trials. A preliminary assessment of the trial data showed that subjects treated with NicVAX quit smoking at a similar rate of approximately 11%, compared to subjects who received placebo. As in previous trials, NicVAX was well-tolerated with a clinically acceptable safety and tolerability profile. The study was a double-blinded, placebo-controlled trial of 1,000 patients. The primary endpoint of the study was the abstinence rate for 16 weeks ending at 12 months. Abstinence was evaluated by self-reported cigarette consumption and biologically verified by exhaled carbon dioxide. Secondary endpoints included the abstinence rate at various time intervals, safety and immunogenicity, and the effect of NicVAX on withdrawal symptoms, cigarette consumption, smoking satisfaction and nicotine dependency.

Talon Therapeutics (TLON.OB) announced that its New Drug Application (NDA) for Marqibo (vincristine sulfate liposomes injection) was submitted to the FDA seeking accelerated approval of Marqibo in adult Ph- ALL, in second or greater relapse or that has progressed following two or more prior lines of anti-leukemia therapy.

The company added that currently available third-line, single-agent therapies induce few responses (<=4%) and are highly toxic. Marqibo's pivotal study in this advanced and heavily pre-treated population including those requiring 3rd through 7th line therapy and with ECOG performance status of 0 -- 3, resulted in an overall remission rate of 20% with side effects that were predictable and manageable with no unexpected toxicities.

Transcept Pharmaceuticals (TSPT) fell again on Monday, as it fell another 9%, after the company said that it will cut costs. Transcept announced plans to reduce operating expenses by eliminating approximately 45% of its workforce following notification from the FDA that the resubmitted New Drug Application for Intermezzo (zolpidem tartrate sublingual tablet), the company's lead product candidate, cannot be approved in its present form. Intermezzo is being developed for use as-needed in the treatment of insomnia when a middle-of-the-night awakening is followed by difficulty returning to sleep.

Transcept expects to record a restructuring charge of approximately $1.1 million in the third quarter of 2011, representing severance and benefit continuation expenses, the majority of which will be paid in the third quarter of 2011. Transcept also expects to record a stock compensation charge associated with the modification of certain stock options in connection with the restructuring that will be determined and recorded in the third quarter of 2011. Transcept expects the organizational change will reduce current annualized payroll and benefit expenses by approximately $2.1 million.

Alkermes (ALKS) announced pro-forma 2012 guidance related to the merger of the company with Elan Drug Technologies (EDT). The company said that in FY12, the company expects pro forma revenues to grow at a single-digit rate to a range of $460 million to $480 million. Pro forma revenues of the combined companies on a trailing 12-month basis as of March 31, 2011, were approximately $450 million. The company expects Adjusted EBITDA margins in the 15% to 20% range yielding pro forma Adjusted EBITDA in the range of $70 million to $90 million. In fiscal year 2013 and beyond, Adjusted EBITDA margins are expected to expand to 30% to 35%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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