Your Daily Pharma Scoop: Timing Synergy Trade, Valeant's Vyzulta Approved, Seattle Genetics Files SBLA For Adcetris

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Includes: ADXS, AMGN, API, BHC, BHVN, BSX, CRBP, CRHM, CRL, CRVS, CYH, EVH, GSK, HL, IBB, MM, NVCR, NVS, PETX, PFE, PFS, PGNX, RMD, SGEN, SGYP, SYK, TEVA, XNCR
by: Avisol Capital Partners
Summary

Synergy remains an attractive opportunity ahead of major catalyst.

FDA approves Valeant’s Vyzulta.

Seattle Genetics has filed sBLA for Adcetris.

This abridged “Daily Scoop” is published by Avisol Capital Partners, which runs the physician-managed Total Pharma Tracker healthcare investment research service on Seeking Alpha Marketplace.

Analysis of top Seeking Alpha coverage: Synergy Pharmaceuticals

Today we will discuss an article on Synergy Pharma (SGYP) by Stephen Ayers, titled “Synergy’s Potential Is Undervalued.” Before we dig into Ayers’ analysis, we reaffirm our bullish outlook on Synergy and note that we agree with the author. Synergy is indeed undervalued.

We discussed Synergy previously as well in our scoops here and here. In these articles, we pointed out the reasons why we are so bullish on Synergy. The company’s approved drug Trulance has the best-in-class efficacy profile and significantly better safety profile. Prescription data so far has been encouraging. There is an upcoming catalyst. Yet the stock continues to disappoint. Year-to-date, Synergy Pharma remains down more than 50%.

Ayers notes in his article that at present valuation and given Trulance’s superiority, this is an investment opportunity. We could not agree more. But the market continues to disagree. What seems to be interesting is that Synergy shares are struggling even as the biotech market as a whole had a decent run, with the iShares NASDAQ Biotech Index (IBB) up more than 17% for the year. So Synergy’s woes have nothing to do with the sentiment on the biotech sector as a whole. If anything the sentiment should have boosted Synergy shares. Instead, the stock continues to struggle.

We believe that the market continues to place significant discount on Synergy shares despite the potential of Trulance because of the fact that Synergy has chosen to go all alone in marketing the drug. This is something Ayers also points out in his article. However, at current valuation, we believe that Synergy has reached a bottom. From here on, the stock could trade sideways until we move closer to the major catalyst in January. We think this is an excellent time to get into Synergy, with a near-term catalyst. Our strategy would be to take some profit when the event in January plays out and then hold the rest for longer term to capitalize on Trulance’s potential in a major market.

Stocks in the news: Analysis of AMGN, VRX, PGNX, GSK, SGEN

Amgen and Novartis expand collaboration with leading Alzheimer's research institute with launch of new long-term study of CNP520

Company:(NASDAQ: AMGN) Novartis (NYSE: NVS)

Ticker

Co Name

Mktcap

Today's Price

Volume

AMGN

Amgen, Inc.

125B

$172.41

2,768,498.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$191.10

$133.64

29.01

3B

Oncology


Ticker

Co Name

Mktcap

Today's Price

Volume

NVS

Novartis AG (ADR)

198B

$82.78

2,132,219.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$86.90

$66.93

23.68

4.6B

healthcare products worldwide

Therapy: BACE1 inhibitor CNP520

Disease: Alzheimer's disease (AD)

News: Amgen and development partner Novartis announced the expansion of their collaboration with the Banner Alzheimer's Institute with the initiation of a new study, the Alzheimer's Prevention Initiative (API) Generation Study 2.

Analysis:The Generation Study 2 follows the launch of the Generation Study 1. The study will focus on whether BACE1 inhibitor CNP520 can prevent or delay the onset of Alzheimer's disease symptoms in a high-risk population. Before the onset of Alzheimer’s disease, brains of the affected individuals see an accumulation of Amyloid beta, a protein. BACE1 is an enzyme that plays a crucial role in the production of Amyloid beta. By blocking the BACE1, theoretically, the accumulation of Amyloid beta can be halted. The Generation Study 2 will be enrolling approximately 2,000 cognitively healthy participants between the ages of 60 and 75 and who are at high risk of developing the disease. The participants being recruited also will carry either two copies of APOE 4 gene or one copy of the gene with evidence of elevated levels amyloid in the brain.


FDA OKs Valeant's eye drop latanoprostene bunod after CRL issues addressed

Company: Valeant Pharmaceuticals (NYSE: VRX)

Ticker

Co Name

Mktcap

Today's Price

Volume

VRX

Valeant Pharmaceuticals Intl Inc

198B

$11.06

9,729,688.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$23.32

$8.31

33.09

4.6B

glaucoma

Therapy: Vyzulta (latanoprostene bunod ophthalmic solution)

Disease: glaucoma or ocular hypertension

News: The FDA has approved Valeant Pharmaceuticals' Vyzulta (latanoprostene bunod ophthalmic solution) for lowering intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The company received a CRL in August in response to its original filing citing CGMP issues at a Bausch + Lomb manufacturing facility in Tampa, FL.

Analysis: Bausch + Lomb in-licensed Vyzulta from French biotechnology company Vyzulta and will be paying a $17.5 million milestone payment following the approval. Vyzulta was initially issued a Complete Response Letter (CRL) by the FDA. However, the CRL was mainly due to concerns about Bausch + Lomb’s manufacturing facility in Tampa, Florida. Vyzulta is targeting a major market. Based on Valeant’s own estimates, the glaucoma market in the U.S. alone is valued at $3 billion.

FDA accepts Valeant's marketing application for psoriasis lotion IDP-118, action date June 18, 2018

Company: Valeant Pharmaceuticals (NYSE: VRX)

Ticker

Co Name

Mktcap

Today's Price

Volume

VRX

Valeant Pharmaceuticals Intl Inc

198B

$11.06

9,729,688.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$23.32

$8.31

33.09

4.6B

glaucoma

Therapy: IDP-118 (halobetasol propionate and tazarotene) lotion

Disease: plaque psoriasis

News: The FDA accepts for review Valeant Pharmaceuticals unit Ortho Dermatologics' NDA seeking approval for IDP-118 (halobetasol propionate and tazarotene) lotion for the topical treatment of plaque psoriasis. The agency's action date is June 18, 2018.

Analysis:IDP-118 is one of the products Valeant is banking on to stage its comeback. Back in August, CEO Joseph Papa had noted about the lotion’s potential in the plaque psoriasis treatment market. The product could achieve peak sales of between $200 million and $300 million.


Progenics finalizes submission of U.S. marketing application for Azedra in rare neuroendocrine tumors

Company: Progenics Pharmaceuticals (NASDAQ: PGNX)

Ticker

Co Name

Mktcap

Today's Price

Volume

PGNX

Progenics Pharmaceuticals, Inc.

416M

$5.93

911,637.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$11.72

$4.60

28.91

113M

Oncology

Therapy: AZEDRA (iobenguane I 131)

Disease: malignant, recurrent and/or unresectable neuroendocrine tumors called pheochromocytoma and paraganglioma.

News: Progenics Pharmaceuticals is up on light volume on the news that it has completed the filing of a NDA in the U.S. seeking approval for radiotherapeutic AZEDRA (iobenguane I 131) for the treatment of patients with malignant, recurrent and/or unresectable neuroendocrine tumors called pheochromocytoma and paraganglioma.

Analysis: Despite the bounce back in the biotech sector this year, Progenics shares have struggled dropping more than 30% for the year. But with the company now moving forward with the AZEDRA application, we expect investors to get into PGNX, especially given current valuation and AZEDRA’s sales potential. Peak sales estimate for the drug range between $150 million and $250 million. While this is nowhere near blockbuster territory, it must be noted that based on the peak sales estimate for one drug, PGNX is trading between 2x and 3x sales.


FDA tags Glaxo's MM candidate GSK2857916 a Breakthrough Therapy

Company: GlaxoSmithKline’s (NASDAQ: GSK)

Ticker

Co Name

Mktcap

Today's Price

Volume

GSK

GlaxoSmithKline plc (ADR)

85B

$35.95

5,342,714.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$44.53

$35.86

0.25

6B

vaccines

Therapy: GSK2857916

Disease: multiple myeloma (MM)

News: The FDA designates GlaxoSmithKline's GSK2857916 a Breakthrough Therapy for the treatment of multiple myeloma (MM) patients who have failed at least three prior lines of therapy, including an anti-CD38 inhibitor, and have not responded to a proteasome inhibitor and an immunomodulatory agent. It also has Orphan Drug status for MM.

Analysis: GSK2857916 is an anti B-cell maturation agent (BCMA) monoclonal antibody-drug conjugate. The BTD for the drug comes on the back of data from the Phase 1 open-label, dose escalation and expansion study in patients with relapsed/refractory MM. GSK will be presenting further data from this ongoing trial at the ASH meeting in December.


Seattle Genetics files U.S. marketing application for expanded use of Adcetris

Company: Seattle Genetics (NASDAQ: SGEN)

Ticker

Co Name

Mktcap

Today's Price

Volume

SGEN

Seattle Genetics, Inc.

8.6B

$60.78

1,128,840.00

52-week high

52-week low

%diff--52w-low

CashBalance

Focusarea

$75.36

$45.31

34.14

192M

Oncology

Therapy: ADCETRIS (brentuximab vedotin)

Disease: advanced classical Hodgkin lymphoma (HL)

News: Seattle Genetics submits a supplemental Biologics License Application (sBLA) to the FDA seeking approval to use ADCETRIS (brentuximab vedotin), in combination with chemotherapy, for the first-line treatment of patients with advanced classical Hodgkin lymphoma (HL), a Breakthrough Therapy indication.

Analysis: Earlier this year, Seattle Genetics had reported results from the ECHELON-1 Phase 3 trial which evaluated ADCETRIS as a combination therapy. The ECHELON-1 trial met its primary endpoint of a statistically significant improvement in modified progression-free survival (PFS). The two-year modified PFS in the treatment arm was 82.1%, compared to 77.2% in the placebo arm. (p-value = 0.035). Key secondary endpoint in the ECHELON-1 trial was overall survival and the results in this endpoint were also favorable for the treatment arm.

Insider Sales

Advaxis, Inc. (ADXS): Interim CEO Lombardo Anthony A sold 24 shares for $77; Chief Scientific Officer Petit Robert sold 12625 shares for $40,274; CFO Bonstein Sara sold 12734 shares for $40,621.

Biohaven Pharmaceutical Holding Co Ltd. (BHVN): CEO Coric Vlad sold 21% of their holding, 150000 shares for $4,411,835.

Boston Scientific Corp (BSX): EVP, GC & CAO Pratt Timothy A. sold 10000 shares (6% of their holding) for $282,214.

Novocure Ltd (NVCR): CSO Kirson Eilon D. sold 35% of their holding (22269 shares) for $490,110; CEO Danziger Asaf sold 15866 shares (2% of holding) for $349,170; COO Ambrogi Michael J. sold 24327 shares (49% of their holding) for $535,364.

Pfizer Inc (PFE): EVP Mackenzie Alexander R sold 14700 shares (11% of their holding) for $518,837.

Resmed Inc (RMD): CFO Sandercock Brett sold 1250 shares for $105,625.

Insider Purchases

Stryker Corp (SYK): Director Doliveux Roch acquired 41 shares for $6,394.

Xencor Inc (XNCR): 10% shareholder Stafford John S III acquired 50000 shares for $979,036. They now hold 5,415,551 shares.

Earnings

Teva Pharmaceuticals Industries Ltd (TEVA) reported its earnings for the third quarter at $1 per share while its revenue for the quarter stood at $5.61 billion. The company’s generic segment sales were $3 billion, down 8% year over year while Specialty segment sales were $2.03 billion, down 1%. It also lowered the 2017 sales and earnings outlook, with revenue expectations in a range of $22.2 - $22.3 billion as against $22.8 - $23.2 billion expected previously. The company expects earnings in a band of $3.77–$3.88 per share in 2017.

Corvus Pharmaceuticals Inc. (CRVS) reported the net loss for the three months ended September 30, 2017, at $12.7 million compared to $10.3 million for the same period in 2016. At September 30, 2017, Corvus had cash, cash equivalents and marketable securities totaling $99.7 million compared to cash, cash equivalents and marketable securities of $134.9 million at December 31, 2016.

Aratana Therapeutics Inc. (PETX) reported total net revenues of $6.2 million and a net loss of $8.9 million or $0.21 diluted loss per share for the quarter ended September 30, 2017. Aratana recorded $5.4 million in revenues during the third quarter of 2017 related to GALLIPRANT while it recorded NOCITA net product sales of $717 thousand in the third quarter.

Evolent Health (EVH) reported the GAAP revenue of $107.9 million, an increase of 79.2% while its adjusted Revenue stood at $108.4 million, an increase of 80.0%. Its net loss attributable to shareholders was $12.6 million and its adjusted EBITDA stood at $2.6 million.

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Appendix/Tables:

Analyst Ratings

Company

Ticker

Analyst

Action

Rating

Agios Pharmaceuticals

AGIO

Credit Suisse Group

Raises Target

Outperform

Allergan PLC.

AGN

Royal Bank Of Canada

Lowers Target

Outperform -> Outperform

Wells Fargo & Company

Reiterates

Outperform

Cantor Fitzgerald

Lowers Target

Neutral

Morgan Stanley

Lowers Target

Equal Weight

Akebia Therapeutics

AKBA

Royal Bank Of Canada

Reiterates

Hold

Alimera Sciences

ALIM

Cowen and Company

Reiterates

Buy

Alnylam Pharmaceuticals

ALNY

Piper Jaffray Companies

Reiterates

Overweight

Amarin Corporation PLC

AMRN

HC Wainwright

Reiterates

Buy

ANI Pharmaceuticals

ANIP

Canaccord Genuity

Reiterates

Buy

AveXis

AVXS

Royal Bank Of Canada

Reiterates

Hold

Chardan Capital

Reiterates

Buy

AxoGen

AXGN

Leerink Swann

Raises Target

Outperform

bluebird bio

BLUE

Maxim Group

Reiterates

Buy

Wedbush

Reiterates

Outperform

BTIG Research

Upgrades

Neutral -> Buy

Barclays PLC

Raises Target

Overweight

Clovis Oncology

CLVS

Morgan Stanley

Lowers Target

Overweight

Conatus Pharmaceuticals

CNAT

HC Wainwright

Reiterates

Buy -> Buy

DURECT Corporation

DRRX

HC Wainwright

Reiterates

Hold

Epizyme

EPZM

Leerink Swann

Reiterates

Outperform

Cann

Reiterates

Buy

Royal Bank Of Canada

Downgrades

Outperform -> Sector Perform

HC Wainwright

Reiterates

Buy

Fate Therapeutics

FATE

BMO Capital Markets

Reiterates

Buy

HC Wainwright

Reiterates

Buy

Genocea Biosciences

GNCA

Piper Jaffray Companies

Reiterates

Overweight

Heron Therapeutics

HRTX

Cantor Fitzgerald

Reiterates

Buy

Histogenics Corporation

HSGX

HC Wainwright

Reiterates

Buy

Juno Therapeutics

JUNO

Maxim Group

Reiterates

Buy

Leerink Swann

Reiterates

Outperform -> In-Line

Wedbush

Reiterates

Outperform

SunTrust Banks

Upgrades

Hold -> Buy

K2M Group Holdings

KTWO

Needham & Company LLC

Lowers Target

Strong-Buy -> Strong-Buy

Lantheus Holdings

LNTH

Wells Fargo & Company

Upgrades

Market Perform -> Outperform

Mallinckrodt PLC

MNK

Cantor Fitzgerald

Reiterates

Buy

NewLink Genetics Corporation

NLNK

Cantor Fitzgerald

Reiterates

Buy

ObsEva SA

OBSV

Royal Bank Of Canada

Reiterates

Buy

Omeros Corporation

OMER

Cowen and Company

Downgrades

Outperform -> Market Perform

Onconova Therapeutics

ONTX

Maxim Group

Reiterates

Buy

Progenics Pharmaceuticals

PGNX

Cantor Fitzgerald

Reiterates

Buy

Sage Therapeutics

SAGE

Royal Bank Of Canada

Raises Target

Sucampo Pharmaceuticals

SCMP

Maxim Group

Reiterates

Buy

Sunesis Pharmaceuticals

SNSS

Cowen and Company

Reiterates

Hold

STERIS PLC

STE

KeyCorp

Reiterates

Overweight

Teva Pharmaceutical Industries Limited

TEVA

Wells Fargo & Company

Downgrades

Market Perform

Wright Medical Group N.V.

WMGI

BMO Capital Markets

Lowers Target

Outperform

Barclays PLC

Lowers Target

Overweight

Royal Bank Of Canada

Reiterates

Buy

Needham & Company LLC

Reiterates

Hold

Acceleron Pharma

XLRN

Royal Bank Of Canada

Reiterates

Hold

Zimmer Biomet Holdings

ZBH

Piper Jaffray Companies

Downgrades

Overweight -> Neutral

BMO Capital Markets

Lowers Target

Outperform

Morgan Stanley

Lowers Target

Overweight

Zoetis

ZTS

BMO Capital Markets

Reiterates

Hold


Earnings Calendar

Company

Date

Pfizer (PFE)

October 31

CRH Medical Corp. (CRHM)

November 1

Community Health Systems (CYH)

November 1

Teva (TEVA)

November 2


Secondary Offerings

Company Name

Stock Offering

Stock Pricing

Corbus Pharmaceuticals (CRBP)

$32.55 Million

$7/Share

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.