What To Watch In Q1: Upcoming Healthcare Regulatory Events And Data Releases

| About: Pfizer Inc. (PFE)

Summary

Healthcare continues to be one of the most volatile industries entering 2017, making it a great time for diligent investors to capitalize on opportunities in the space.

Check out our top picks for important data releases and healthcare catalysts to track in the first quarter.

Stay up to date on important regulatory events coming in Q1.

SLINGSHOT INSIGHTS CONTRIBUTOR: Phil Loria

After another roller-coaster year in the healthcare space, investors are trying to stay positive while repositioning for the Trump presidency. Throughout 2016 merger volume and valuations fell from the historically the high levels seen in 2014 and 2015. Although political rhetoric surrounding the Affordable Care Act is destined to bring more volatility in 2017, there are many reasons to have a positive outlook on the sector. Demand for health services continues to increase as baby boomers age. Cash balances remain at high levels increasing the likelihood of higher dividend yields, more M&A activity, and potentially beneficial stock buybacks. Dominant players in the space have also started employing new strategies due to public and political pressure to lower drug prices. While regulatory concerns and fiscal policy changes could continue to bring volatility in 2017, now is a great time for diligent investors to capitalize on low valuations across the industry. Here is a list of regulatory and data related events coming in the first quarter that healthcare investors should be watching closely.

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REGULATORY EVENTS TO WATCH:

PDUFA Date of January 7th for Pfizer's Crisaborole in Atopic Dermatitis

  • Pfizer (NYSE:PFE) completed their acquisition of Anacor for $5.2 billion on June 23rd to strengthen their medical rheumatology portfolio and gain control of crisaborole-a potential first-line treatment for 18 million U.S patients with atopic dermatitis. The transaction was carried out as a bolt-on acquisition through Pfizer's subsidiary Quattro Merger Sub Inc to increase the value of PFE. The success of these transactions is very important in creating shareholder confidence in Pfizer's leadership. The topical drug has proven to be efficacious and well tolerated, and could fill the significant unmet need for a non-steroidal option in the market. Crisaborole is also being tested in psoriasis, and Pfizer is currently exploring regulatory filings outside of the U.S. They project the drug to bring in over $2.0 billion in peak annual sales. If it is approved by the FDA this week, the drug will help Pfizer continue to grow in profitability and regain stability after a volatile year. Assuming it is approved, Slingshot Insights would like to conduct an expert interview in the coming weeks on the market potential of crisaborole.

PDUFA date of January 29th for Synergy's Plecanatide. Supplemental NDA filing also due in the first quarter.

  • Synergy (NASDAQ:SGYP) trades around $6.30 per share, and Plecanatide will become the company's first approved product if it has a successful PDUFA date. The drug is a once-daily tablet being tested in chronic idiopathic constipation [CIC] and irritable bowel syndrome with constipation [IBS-C]. The upcoming PDUFA date is for CIC, but Synergy also has plans to submit an sNDA in IBS-C during this quarter. Plecanatide has shown promising results through clinical trials, and there are only two FDA approved treatment options for CIC and IBS-C (Amitiza, Linzess). An estimated 45 million adults suffer from CIC or IBS-C in the U.S alone, and less than 5% are currently receiving treatment from a branded prescription. If the product is approved it could capitalize on this significant unmet need in the market, and be a major value driver for Synergy. We conducted an interview with a leading gastroenterologist on the Phase 3 data for Plecanatide versus Linzess-and interpreting CIC versus IBS-C data where he makes particularly useful comments about relative side effect rates vs. absolute rates and how they should be applied when looking at Plecanatide and Linzess.

Rigel's NDA filing for Fostamatinib in Immune Thrombocytopenic Purpura

  • Rigel (NASDAQ:RIGL) is a micro-cap trading around $2.40 per share, whose lead candidate Fostamatinib is starting to advance through the regulatory process. It is being tested across three indications: Immune Thrombocytopenia [ITP], Autoimmune Hemolytic Anemia [AIHA], and IgA Nephropathy [IgAN]. Rigel is planning to submit an NDA in ITP this quarter despite Phase 3 results that showed a serious side effect profile and an 18% response rate. Only 50,000 to 60,000 people suffer from the autoimmune disease, and the majority of patients are women. It is currently hard to predict what treatments work for patients, and there is no one drug that works for everyone. Approval of fostamatinib would give healthcare professionals a new product to try for difficult-to-treat patients, and be a significant step towards profitability for Rigel. Recent data presents a serious obstacle towards achieving this, and investors should watch closely the month following submission to see if the FDA accepts the application for review. On our expert call with a leading hematologist from Mount Sinai, the expert discussed the Phase 3 expectations and chances of approval.

Aerie NDA Refiling Expected Towards End of Q1 2017 for Rhopressa in Glaucoma

  • Another regulatory event to keep an eye on this quarter is a NDA resubmission for Aerie's (NASDAQ:AERI) Rhopressa in elevated intraocular pressure [IOP] in glaucoma patients. Aerie withdrew the NDA in October because the third party manufacturer was not ready for pre-approval inspection by the FDA. They recently announced that the facility will not be ready for inspection until the end of February, and that NDA filing will be delayed until the end of Q1. While this is obviously a major concern for any Aerie investor, the drug could become the first approved once-daily product to target the trabecular meshwork responsible for high IOP. Before the original NDA submission Slingshot Insights conducted an interview discussing Aerie's glaucoma program with a leading ophthalmologist from the University of Illinois.

DATA RELEASES TO WATCH:

Neurocrine Top-line Phase 2 Data Evaluating Ingrezza in Adults and Pediatrics with Tourette Syndrome due early 2017.

  • Ingrezza, one of Neurocrine's (NASDAQ:NBIX) lead product candidates, will have its fate revealed in the coming months. Phase 2 data from T-Forward evaluating adults with Tourette Syndrome and T-Force evaluating pediatrics will be released soon. The results will help management and the FDA Advisory Committee decide if a Phase 3 trial is necessary before submitting an NDA in Tourette Syndrome. Ingrezza already has a PDUFA date of April 11th for Tardive Dyskinesia, which will also give investors insight into how the FDA views the drug. Slingshot Insights is planning to conduct an expert interview in the next two weeks to discuss the coming data release, and what it means for the drug's chances of success.

Cidara Phase 2 RADIANT Data Release for Topical CD101 in Yeast Infection

  • Cidara (NASDAQ:CDTX) is another micro-cap due to release data on their lead candidate in the first quarter. CD101 is a echinocandin antifungal, the first and only agent in its class being evaluated for the treatment and prevention of yeast infections. CDTX is currently trading around $10.20, relatively close to their 52-week low of $8.65. The stock could move back in the range of its 52-week high of $17.29 with positive data, and shareholders will certainly be watching the release closely. The company is also developing intravenous CD101 for candidemia and invasive yeast infections; and an immunotherapy discovery platform called Cloudbreak that gives the stock significant potential upside.

Trevena Phase 3 APOLLO 1 and APOLLO 2 data due Q1 2017 for Oliceridine in Moderate to Severe Acute Pain

  • Trevena (NASDAQ:TRVN) is a small-cap company trying to break into the crowded pain management market with their lead candidate Oliceridine. The drug is an intravenous mu opioid receptor that Trevena believes could potentially replace IV opioid analgesics. It has demonstrated comparable pain relief, but most of its potential values lies in a minimal side effect profile relative to opioids. Top-line Phase 3 data is due this quarter from APOLLO 1 in patients following bunionectomy (removal of a bunion), and APOLLO 2 in patients following abdominoplasty (tummy tuck). NDA submission is planned for the second half of 2017, and positive data from APOLLO will undoubtedly improve Trevena's chances of breaking into the market.

Ritter Pharma to Release Top-Line Phase 2b/3 Data for RP-G28 in Treatment of Lactose Intolerance

  • The only nano-cap on this list, Ritter (NASDAQ:RTTR) traded in the range of $0.98-$3.26 over the last year. The company is focused on the development of novel therapeutics to treat gastrointestinal diseases, and RP-G28 has the potential to be the first approved product for lactose intolerance. More than 1 billion people are affected by this condition worldwide, and an estimated $2 billion is spent annually in the U.S on over-the-counter lactose intolerance aids. Ritter also believes the compound may have applicability to Crohn's disease, irritable bowel syndrome, inflammatory bowel disease, and ulcerative colitis. Positive data from their Phase 2b/3 trial will help RP-G28 advance to Phase 3 testing, and could help them receive more funding to initiate trials in other indications.

Ultragenyx Phase 2 Data Release for UX007 in Glut1 Deficiency Syndrome Patients

  • Although they have no approved products, Ultragenyx (NASDAQ:RARE) has numerous candidates for different rare diseases with UX007 as the lead drug in their pipeline. The drug is being developed for long-chain fatty acid oxidation disorders {LC-FAOD} and Glut1 DS, with Phase 2 data in Glut1 DS due this quarter. Positive 78-week Phase 2 data in LC-FAOD was released in late November, and Slingshot Insights is planning to conduct an expert interview to analyze the data and the drug's potential for success in the market.

Progenics Phase 2b data due for Azedra in Pheochromocytoma in the First Quarter

  • Progenics' (NASDAQ:PGNX) Azedra has received Orphan, Fast Track, and Breakthrough Therapy designations from the FDA for the treatment of malignant and/or recurrent pheochromocytoma and paraganglioma. Positive data this quarter will lead Progenics to file an NDA in the first half of the year, and the company believes the drug is well positioned for commercialization in late 2017. The company reached profitability in 2016 on the success of Relistor, but at a current share price of $8.64 there is significant room for movement. Whether that movement is up or down in the short term will likely depend on the success of Azedra, and shareholders should watch closely for the upcoming Phase 2b data. Slingshot Insights conducted two expert interviews in September assessing the potential of Azedra compared to conventional I-131 MIBG.

Roche Phase 3 APHINITY Results Expected in Q1 2017 Evaluating Perjeta in Adjuvant Treatment of HER2-Positive Breast Cancer

  • Although Roche (OTCQX:RHHBY) was originally supposed to release the data by the end of 2016, investors are eagerly waiting for the Phase 3 data release for perjeta in HER2-positive breast cancer. The drug is already approved for combination use with herceptin and docetaxel, and is one of the faster growing in terms of sales for Roche. Q3 2016 sales for perjeta were 24% higher than in Q3 2015 (42% in EU due to later launch), and more data supporting its use in an adjuvant setting could lead to further growth for Roche. Although sales exceeded $1 billion in 2015, investors in Roche believe this will continue to increase if perjeta demonstrates significant improvement in long-term survival rates in the Phase 3 study.

Data from Amgen's Phase 3 FOURIER Coronary Imaging Study Evaluating Repatha in High Cholesterol Patients Expected Q1 2017

  • Amgen's (NASDAQ:AMGN) Repatha is an already approved injectable PCSK9 inhibitor used with statin therapy to lower levels of LDL cholesterol. Amgen investors are waiting for important cardiovascular imaging results from their Phase 3 study that will show the effect of the drug on atherosclerotic plaque in the coronary arteries. This a major underlying cause of cardiovascular disease, and successful results will be a major step in establishing Repatha as an important therapy in this area. The product has yet to become a major source of sales for the company, but there is hope that positive results will lead to further adoption from cardiovascular specialists and general practitioners. Slingshot Insights would like to conduct an interview with a cardiologist before the data release to get a better understanding of the potential of repatha.

These are just some of the key catalysts that are coming up for the biotech sector in the first quarter of 2017. Slingshot Insights has an extensive, searchable database of all the key value driving events for the sector.

Disclosure: I am/we are long SGYP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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