- Celgene suffers another setback as FDA issues Refusal to File letter for Ozanimod NDA.
- Valeant reports results.
- Synergy sells Canadian rights to Trulance.
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Analysis of top Seeking Alpha coverage: Celgene
Today we will discuss Celgene (CELG) after the company suffered an embarrassing setback as the FDA issued a Refusal to File letter to the company regarding its New Drug Application (NDA) for multiple sclerosis (MS) drug Ozainimod.
Following preliminary review, the agency determined that the nonclinical and clinical pharmacology sections in the NDA are not sufficient to permit a complete review. While the company plans to seek immediate guidance, this is a major lapse on its part. Not surprisingly, Celgene shares, which saw a huge sell-off in the second half of 2017, are down more than 7% in early trading today as investors react to what is a major disappointment.
After the sell-off last year, we had noted that Celgene was attractive from a valuation standpoint. However, our thesis depended a great deal on Ozanimod succeeding. This is not to say that we expect Ozanimod to fail at regulatory stage. We continue to believe that the drug’s safety and efficacy profile means that it will get an eventual approval. But this lapse by Celgene messes up the timeline for commercializing Ozanimod, which in turn hurts Celgene’s long-term revenue projections.
As a result, we expect Celgene shares to remain stagnated until there is more clarity on the regulatory path for Ozanimod. It will be also interesting to see how this impacts 2020 revenue projections for Celgene. Remember that Ozanimod would have been a major contributor if the regulatory process remained on track. The Refusal to File means a delay of at least six months before Celgene can get its NDA accepted. This means a late 2019 approval and 2020 launch. Essentially, Ozanimod’s contribution to top-line would be immaterial then.
Stocks in News: Analysis of HTBX, MBVX, VRX, SGYP
Heat Biologics (HTBX) announced updated preliminary results from a phase 2 clinical trial evaluating the combination of therapeutic vaccine candidate HS-110 and Bristol-Myers Squibb’s (BMY) Opdivo in patients with advanced non-small cell lung cancer (NSCLC) who have progressed after one or more prior lines of therapy.
Analysis: Among the 35 patients in the Intent-to-Treat (“ITT”) population, 6 patients (17%) achieved a partial response and 14 patients (40%) achieved disease control. Evaluable ITT patients (those who underwent at least one follow-up scan regardless of treatment duration) showed overall response and disease control rates of 26% and 67%, respectively. Overall responses appeared durable and long lasting. The company said that the survival data are still maturing, and median overall survival has not yet been reached. The combination of HS-110 and nivolumab was well tolerated, with no additional toxicities compared to what has been observed with single agent checkpoint inhibitors.
MabVax Therapeutics (OTCQB:MBVX) announced preliminary results from a phase 1 study evaluating the safety of radioimmunotherapy candidate MVT-1075 in patients with CA19-9-positive cancers.
Analysis: The company reported that data from the first three patients in the dose-escalation phase showed MVT-1075 was "reasonably well-tolerated" and accumulated on tumor cells after the first dose. Blood-related toxicities were manageable. Two of the three subjects met the criteria for stable disease. The company is currently enrolling in the second cohort at the next higher dose.
Valeant Pharmaceuticals (VRX) reported Q4 results and also provided guidance for 2018.
Analysis: Valeant’s revenue for the fourth quarter was $2.16 billion, down 10% on a year-over-year basis. Revenue missed consensus forecast by $20 million. The company’s Bausch + Lomb unit saw a 3% drop in sales to $1.23 billion. VRX reported an operating loss of $322 million and non-GAAP net income of $347 million, down 21.7% on a year-over-year basis. For 2018, revenue is expected to be between $8.10 billion and $8.30 billion. Valeant also announced that it will redeem the remaining $71 million of its outstanding 7% Senior Unsecured Notes due 2020 with cash on hand on March 30.
Synergy Pharmaceuticals (SGYP) saw some positive development as Cipher Pharmaceuticals (CPHR) nabbed the Canadian rights to Trulance or the treatment of adults with chronic idiopathic constipation and irritable bowel syndrome with constipation.
Analysis: Trulance is approved for both indications in the U.S. In Canada, the company expects to submit a marketing application later this year. As per the terms of the agreement, Synergy will receive $5 million in upfront payment, an unspecified milestone payment and royalties on net sales. This is a positive development for SGYP as it provides the company with non-dilutive funding. Despite Trulance approval in two indications, SGYP shares have remained under pressure mainly due to concerns over commercialization in the U.S. and future dilution. As we have noted before, the dilution risk is there for the company but it does have the option of out-licensing Trulance ex-U.S., which could provide some much needed non-dilutive funding. This is a step in the right direction and we expect SGYP shares to strengthen.
In other news
Roche (OTCQX:RHHBY) announced that the European Commission (EC) approved HEMLIBRA (emicizumab) for the routine prevention of bleeding episodes in people with hemophilia A with factor VIII inhibitors.
Shire (SHPG) announced that the FDA accepted for review its marketing application seeking approval for Calaspargase Pegol (Cal-PEG) as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia (ALL). The agency's action date is December 22.
AstraZeneca (AZN) announced that it is spinning off three clinical and three preclinical drugs into a standalone biotech company focused on severe autoimmune diseases. The decision to spin-off is part of AstraZeneca’s ongoing efforts to divest non-core assets.
Teva Pharmaceutical (TEVA) has initiated a private offering of euro 1 billion aggregate principal amount of Senior Notes and a $2.25 billion offering of Senior Notes. Net proceeds will be used to repay ~$2.3B of outstanding indebtedness under its U.S. Dollar and Japanese Yen term loan agreements and, together with cash on hand, to repay the remaining $1.5B of its 1.40% Senior Notes due 2018.
MannKind (MNKD) reported a loss of $0.28 per share, a penny below the consensus forecast. The company’s revenue for the quarter was $4.5 million, down 63.7% on a year-over-year basis. Revenue though beat consensus forecast by $1.89 million.
Veracyte (VCYT) reported a loss of $0.24 per share, missing consensus forecast by 4 cents. The company’s revenue for the quarter was $19.6 million, up 7.3% on a year-over-year basis. Revenue beat consensus forecast by $0.64 million.
Depomed (DEPO) reported earnings of $0.15 per share in its fourth quarter, beating consensus forecast by 5 cents. Revenue for the quarter fell 23.8% to $94.4 million but beat consensus forecast by $3.46 million.
Achaogen (AKAO) reported a loss of $0.98 per share, missing consensus forecast by 18 cents. Revenue for the quarter was $1.9 million, $0.37 million above the consensus forecast.
AveXis (AVXS) reported a loss of $2.55 per share in its fourth quarter, missing consensus forecast by 91 cents. The company ended the quarter with $324.12 million in cash and cash equivalents.
Five Prime Therapeutics (FPRX) reported a loss of $1.04 per share in its fourth quarter, beating consensus forecast by 27 cents. The company’s revenue for the quarter was $13.22 million, up 60% on a year-over-year basis. Revenue missed consensus forecast by $2.28 million.
FibroGen (FGEN) reported a loss of $0.27 per share in its fourth quarter, beating consensus forecast by 2 cents. Revenue for the quarter rose 33.2% to $42.51 million, missing consensus forecast by $7.26 million.
Horizon Pharma (HZNP) reported fourth-quarter earnings of $0.29 per share, beating consensus forecast by 7 cents. The company’s revenue for the quarter was $274.22 million, down 11.6% on a year-over-year basis. Revenue beat consensus forecast by $9.74 million.
Pacira Pharmaceuticals (PCRX) reported earnings of $0.38 per share, beating consensus forecast by 28 cents. The company’s revenue for the quarter was $79.08 million, up 8.5% on a year-over-year basis. Revenue missed consensus forecast by $0.24 million.
TESARO (TSRO) reported Q4 and full-year 2017 results and also provided guidance for 2018. Q4 revenue came in at $48 million, missing consensus forecast by $ million. The revenue miss sent TSRO shares down sharply in pre-market trading. For 2018, the company expects total revenue to be between $310 million and $345 million, with Zejula sales expected to be between $255 million and $275 million.
Heron Therapeutics (HRTX) reported a loss of $1.09 per share, missing consensus forecast by 30 cents. The company’s revenue for the quarter was $10.05 million, up 685.2% on a year-over-year basis. Revenue beat consensus forecast by $0.76 million.
ACADIA Pharma (ACAD) reported a loss of $0.55 per share in its fourth quarter, beating consensus forecast by 3 cents. The company’s revenue for the quarter was $43.6 million, up 264.5% on a year-over-year basis. Revenue missed consensus forecast marginally though.
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This article was written by
Avisol Capital Partners is made up of a team of medical experts, finance professionals and techies, all of whom invest their own money in the picks they share. They aim to help readers find the middle ground between value and growth investing, as they demystify the biopharma industry.They lead the investing group Total Pharma Tracker where they offer a monthly updated catalyst database, an investability scoring system for quick reference ideas, and direct access in chat for dialogue and questions. Learn more.
Analyst’s 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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