Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.
This week, January 2-6, 2017, we had thoughts on the following: J&J (NYSE:JNJ) joins the Nash pack; Shire (NASDAQ:SHPG) finds good home for mRNA unit; Arena (NASDAQ:ARNA) admits defeat over obesity; Inotek (NASDAQ:ITEK) cannot see past phase III failure; Consort’s (OTC:CSRMF) (OTC:CSRMY) Voke deal revoked.
These snippets were previously published daily via twitter.
J&J joins the Nash pack
January 6, 2017
Johnson & Johnson has long been involved in funding early-stage research through its J&J Innovation arm – and 15 new arrangements have pushed the unit’s total deals over 300 since its inception in 2013. Arguably the most interesting partnership is with Bird Rock Bio in non-alcoholic steatoheapatitis (Nash) – the company has a cannabinoid receptor 1 modulator, namacizumab, in phase I development. The Nash pipeline is crowded, but the project is the only one in the space targeting CB1, according to EvaluatePharma. However, rival candidates are well ahead. Meanwhile, Janssen has separately signed an agreement with Bristol-Myers Squibb (NYSE:BMY) to evaluate Darzalex and Opdivo in phase Ib/II studies in multiple myeloma and several solid tumour types – marking yet another combo approach for Bristol’s product.
Shire finds good home for mRNA unit
January 5, 2017
Shire’s decision to offload its messenger RNA technology MRT and its employees to the specialist private company Rana Therapeutics looks like a sensible decision. The Irish-domiciled speciality and rare-disease player has its hands full with multiple launches and late-stage clinical readouts, not to mention the likely need to defend the legacy Baxalta hemophilia A franchise from incursions by Roche’s (OTCQX:RHHBY) emicizumab. Shire’s work in DNA and RNA therapeutics, which began in 2008, has yet to advance into the clinic. In taking a stake in Rana, the serial acquirer Shire puts itself in the pole position to license or take out Rana should the MRT projects or Rana’s own proprietary pipeline bear fruit. Massachusetts-based Rana said it would continue to advance the MRT lead projects in cystic fibrosis and urea cycle disorders, aided by the transfer of Shire’s MRT employees into the group’s fold. Rana has raised $87m since its founding, starting with a seed capital round in late 2011.
Arena admits defeat over obesity
January 5, 2017
After more than a decade of proclaiming the revolutionary benefits of its anti-obesity pill Belviq, Arena Pharmaceuticals has lost the faith. The product has been handed over to its global partner, Eisai, for $23m in cash and over $80m in cost clawback, while Arena will continue to receive royalties and potential sales-related milestone payments. These payments are unlikely to come close to covering the years of development costs incurred – a 12,000-patient cardiovascular safety study demanded by regulators still has several years to run – and it is hard to escape the conclusion that Belviq was a blunder from the beginning, the huge commercial opportunity notwithstanding. Still, this is Eisai’s (OTCPK:ESALF) (OTCPK:ESALY) problem now; it would not be surprising if the Japanese company was waiting for the readout of this trial, called Camellia-Timi 61, to make its own call on the future of the project. Like the other oral fat fighters launched around the same time Belviq has proved a commercial flop – Takeda (OTCPK:TKPHF) (OTCPK:TKPYY) exited its US marketing deal for Orexigen’s (NASDAQ:OREX) rival pill Contrave in mid-2016. Unless the Camellia heart safety study uncovers something quite remarkable, it is hard to see Belviq continuing to make commercial sense for Eisai.
Inotek cannot see past phase III failure
January 3, 2017
Shares in Inotek Pharmaceuticals tumbled 70% in market trading following announcement that the phase III trial of glaucoma project trabodenoson failed to significantly reduce intraocular pressure when compared with placebo. The eyedrop, which aims to relieve intraocular pressure (IOP) via the trabecular meshwork as in healthy eyes, was tested four times a day during days 28, 42 and 84 of treatment, but did not show an IOP benefit at all 12 timepoints. The company said the failure was driven by better than expected IOP readings at the 8am test in patients taking placebo. Not all is lost for Inotek, as it has a second glaucoma candidate – however, as that project combines latanoprost with trabodenoson, today’s announcement should cast doubt on its promise.
Consort’s Voke deal revoked
January 3, 2017
Consort Medical has played down the termination of its agreement with British American Tobacco for its Voke nicotine inhaler, pointing to its remaining 15 asset-strong pipeline. But Voke was once one of its big hopes, with sales forecasts of £15-20m ($18-25m) per year at the time of its UK approval in September 2014. The company had planned to sell Voke to smokers who wanted to quit and as an alternative to e-cigarettes, but it never launched the product – the reason BAT gave for walking away. The long delay meant that some analysts had already removed it from their estimates, and Consort said the end of the deal should not affect this year’s financial performance. Even so, the UK group’s stock was down around 6% this morning. It will hope for better news for the rest of its pipeline – including DEV610, the generic version of Advair developed with Mylan (NASDAQ:MYL), which has a GDUFA date of March 28.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.