Biotech Analysis Central Pharma News: Merck And Pfizer's Green Light, Biogen's Woes, Rxi Pharmaceuticals Scar Data

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Includes: AXON-OLD, AZN, BIIB, ESALF, IONS, JNJ, LLY, MRK, PFE, PHIO
by: Terry Chrisomalis
Summary

Merck And Pfizer receive FDA approval for diabetes drug.

Biogen and Eisai receive bad news for phase 2 interim Alzheimer's data at a 12-month time point.

Rxi Pharmaceuticals posts phase 2 data treating patients with hypertrophic scars.

Welcome to Biotech Analysis Central Daily News, a daily news report and analysis about what has happened lately in the biotech industry.

Merck And Pfizer Score FDA Approval For Diabetes Drug

News: Recently, Merck (MRK) and Pfizer (PFE) announced that they have received FDA approval for their diabetes drug. Their drug that won FDA approval is known as Steglatro. In addition to Steglatro was approved as a monotherapy for diabetes. The FDA also approved two combinations of this treatment as well. These combinations include Steglatro with Januvia and metformin. Both of these combination drugs will be marketed as Steglujan and Segluromet respectively.

Analysis: It is good that both Merck and Pfizer got approval in the diabetes space. After all, it is a large market. The global diabetes market is projected to reach around $53 billion in 2017. The problem is that Steglatro is the fourth drug from a big pharma company to receive FDA approval as the SGLT2 class. Other big pharmaceutical companies that have already received FDA approval for an SGLT2 class drug for diabetes are: Eli Lilly (LLY) and Boehringer Ingelheim with Jardiance, Johnson & Johnson (JNJ) with Invokana, and AstraZeneca (AZN) with Farxiga. All these players will mean a lot of competition in the diabetes space. That means that Merck and Pfizer won't have an easy time penetrating the market. The good news is that the market is huge as mentioned before, therefore I can see each player getting some piece of the market. Who wins out in the end will highly depend on safety studies, that many big pharma have done or are running now to prove cardiovascular benefits when patients take their drug over others. I think there is plenty of market share for all these players to coexist. Merck and Pfizer remain good buys.

Biogen And Partner Eisai Face Trouble With Alzheimer's Drug

News: Recently, Biogen (BIIB) and its partner Eisai (OTCPK:ESALF) released phase 2 data for their drug BAN2401, treating patients with Alzheimer's disease. It was noted that their drug didn't achieve the criteria necessary for success after 12 months of treatment. The only good news to come out of the PR is that the company will continue the trial out to 18 months in hopes that the clinical evidence improves over time.

Analysis: This is bad news for Biogen because if it can't succeed with BAN2401 it takes a huge chunk out of the company's Alzheimer's pipeline. On the plus side, Biogen has another Alzheimer's drug known as Aducanumab, which like BAN2401 also targets amyloid beta plaque which is found as proteins on the brain of Alzheimer's patients. I think that there are a few scenarios here for mitigated risk. First, the BAN2401 phase 2 trial heading out to 18 months may yield statistically significant results, in which case, Biogen proves that targeting beta amyloid plaque works. On the other hand, you have data for Aducanumab which is reporting interim results in mid 2018, and then full results in 2019. That will be another chance for Biogen to succeed. The good thing is that Biogen has two shots on goal for Alzheimer's which gives it a good chance at succeeding. The bad news is that a host of pharmaceutical companies have attempted to conquer Alzheimer's disease over the years, with no sign of success. I really do hope that Biogen succeeds so that patients finally have a new treatment option. The problem is that 99% of companies that have attempted to treat Alzheimer's in clinical trials have failed to produce any meaningful data since 2002. For instance, Axovant (AXON-OLD) posted data from its phase 3 MINDSET trial this year. It stated that patients treated with intepirdine did not achieve clinical success with scores from both surveys. That indicates that the phase 3 trial failed completely. I think that Biogen has a huge chance to tap the large Alzheimer's market, which is expected to reach around $14.8 billion by 2026. Anyways, Biogen has a drug partnered with Ionis Pharmaceuticals (IONS) known as Spinraza which treats spinal muscular atrophy which should perform well with sales. In addition, Biogen has always done well with sales for its Multiple Sclerosis drugs. I think that Biogen still remains a good buy.

Rxi Pharmaceuticals Posts Phase 2 Scar Data

News: Recently, Rxi Pharmaceuticals (RXII) posted data from its phase 2 study treating patients with hypertrophic scars. The company stated that there was a statistically significant improvement of visual appearance for revised scars after scar revision surgery. In addition treatment with RXI-109 was an improvement versus control. The exploratory endpoint of the study looked for patient reported outcomes. It was noted that 88% of patients indicated that they preferred being treated with RXI-109 over control.

Analysis: This data is pretty good however the stock has traded lower since the results were reported. I believe there are a few problems why investors were not as ecstatic over the phase 2 results. The first problem is that the PR was vague in its press release:

"The fact that RXI-109 resulted in statistically significant improvements on scar outcomes at all follow-up time points for one of the dose groups, show that the effect of RXI-109 is both observed early on, and lasts at least throughout the entire follow-up time frame"

The problem here is that it is stated in the PR that there was statistical significance in one of the dose groups. The problem is that the PR doesn't state exactly what numeric value the dose group was. The second issue is that it would have been wise in my opinion for Rxi to possibly link a presentation based on the results showing some pictures from the trial so that investors could get a good idea visually on how effective RXI-109 really was. After all, in terms of scars a picture is worth more than data itself in my opinion. The third issue is that Rxi is nearing a potential deadline for NASDAQ delisting if it can't get its share price above $1 per share for 10 consecutive business days before January 29, 2018. If the company can't get its share price up soon it will likely have to enact a reverse split, which will likely harm shareholders. The final issue is that the company is low on cash. As of September 30, 2017 Rxi Pharmaceuticals has cash and cash equivalents of $5.4 million. That means that the company's cash position is low. The only bright side to the cash position is that on August 8, 2017 Rxi entered into an agreement with Lincoln Park Capital Fund, LLC (("LPC")) which the company has the right to sell to LPC up to $15 million in shares of the company's common stock over a 30-month agreement. The issue with this route is that it will likely be a burden on the stock price and investors. I would state that it is best to avoid Rxi Pharmaceuticals for now until management fixes all these issues.

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.

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