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Biotech Forum Daily Digest For March 1st

Mar. 01, 2018 12:37 PM ETACAD, CELG, NVAX, SNDX, SRNEQ, MRK63 Comments


  • Yesterday closed out the books on February, which was a negative month for the biotech sector and the overall market.
  • Celgene flubs a NDA on a key drug with the FDA. Meanwhile, Sorrento Therapeutics garners a key FDA approval.
  • All the other notable news, events and analyst ratings from across the sector as well as a Spotlight feature on Acadia Pharmaceuticals are below.

"Use only that which works, and take it from any place you can find it." - Bruce Lee

It was tough slog for the biotech sector in the month of February, which mercifully ended yesterday. After a promising start to 2018 with some ~$30 billion in deals to open the year, M&A activity dried up in February as market volatility spiked.

IBB Stock ChartBiotech was hardly alone in seeing negative sentiment. The overall market broke its 10 month winning streak as all the major indices declined on the month as the 10 Year Treasury yield got closer to the 3% milestone. Interest rates stand at their highest levels in over four years as the credit markets adjust to an accelerating economy and the prospect of three or four quarter point hikes by the Federal Reserve in 2018.

Author's note: To get these Biotech Forum Daily Digests as soon as they are published, just click here on my profile, hit the big orange "Follow" button, and choose the "real-time alerts" option.

Biotech giant Celgene (CELG) was thumped almost 10% in trading yesterday and also contributed to the negative sentiment on the sector in trading Wednesday. The company received a refusal to file letter around its NDA for its compound ozanimod for the treatment of patients with relapsing forms of multiple sclerosis. This is one of several stumbles of late for the company.This appears to be a bureaucratic snafu that certainly does not put Celgene's leadership in a good light. However, this will probably delay the NDA submission not kill it.

The FDA approved Sorrento Therapeutics' (SRNE) ZTlido (lidocaine topical system) 1.8% patch for the relief of pain associated with post-herpetic neuralgia on Wednesday. The shares rallied over 15% despite the down day in the markets as a result.

The stock of Novavax (

This article was written by

Bret Jensen profile picture

Bret Jensen has over 13 years as a market analyst, helping investors find big winners in the biotech sector. Bret specializes in high beta sectors with potentially large investor returns.

Bret leads the investing group Learn more.

Analyst’s Disclosure: I am/we are long ACAD, CELG, SNDX, SRNE, XLRN. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (63)

What’s moving SNDX today , any news out ???
Probably the info that will be released at 4:30pm today. It’s an abstract drop for AACR. http://bit.ly/2FSz0zv
Buyout speculation?
Conference call was very recent.
Congrats Bret on the SNDX run up today into the AACR oral presentation abstract drop at 4:30pm. Looks promising.
Bret Jensen profile picture
Probably too big of one day rally, but nice to see nonetheless and still like long term
Hello Brett from the Windward Islands - always enjoy reading your calculated thoughts. What about Abbvie? It's had a spectacular run to date, do you think it's going to continue or has it reached maximum value in your opinion
Bret Jensen profile picture
Still have piece of ABBV. Have culled some profits. Liked it a lot better in the $50s obviously
Me too and put the cash into T2 Biosystems Inc - another one you recommended and this one is up some 54% over the last few weeks. Not all your recommendations are winners but I would be a fool if I didn't take all your recommendations and then do my own research before investing. Helps to put fuel in the yacht that's for sure, so thanks
Bret Jensen profile picture
Nice! :-). Happy to hear. Love razor and razor blade stories like TTOO...hoping it becomes an 11-bagger like ZLTQ before...
Brett -- Did you have a sell stop on your PTLA house money shares? Now even the option money isn't worth trading.
Bret Jensen profile picture
Actually increased exposure a bit, just over $31 using a Buy-Write option strategy.
Milford55 profile picture
Bret, any suggestion on PTLA after data read out on Monday, do you still think FDA would require another trial or will it be post approval study?
Milford55 profile picture
Insider buying reported on ACAD which is good sign, up we go from here!!
Vitamanrocks1 profile picture
Haha no they don't....
Milford55 profile picture
0f course, price jumped from 22$ to 26$ and it’s trading very well around 25$, should go back to 30$
Vitamanrocks1 profile picture
No, it's not trading well.
These guys are in huge trouble.
You'll see why soon.....
FLXN has major events on March 6 and March 8 to watch
HGWells profile picture
Hi Bret
Nice SGYP AER from more confident CEO
HGWells profile picture
Sorry ... fat thumbs ..

SGYP nice ER, more confident CEO, CIITI Liav still out to destroy it, is the water safe for a while? And how does warrants $2.85 I think effect SP? Is it a LID?
Bret Jensen profile picture
Probably short term headwind. If Trulance scripts keep rising in the mid-single digits W/W throughout the year, all will be right in the Synergy world imho.
Hi Bret,
AGEN has been absolutely smoking, but I have no idea why. Do you know what's going with AGEN?
Bret Jensen profile picture
Some positive chatter recently about potential of pipeline, but mostly seems like technical breakout on volume. JMTC
sbrncra profile picture
Bret, bought SRNE yesterday on the dip...it performs better than lidoderm
Patch, it will be a winner in the non opioid mkt!!!
Bret Jensen profile picture
I sold the September $10 calls for $2.50 when it spiked on approval
Vitamanrocks1 profile picture
Hi Bret,
I don't think ACAD is expecting a read this year on Harmony.
They haven't even recruited the entire number of people required.
The read will more likely be 3 years out from here.
Plenty of time to keep shorting the EC's or any announcement.
The 2 others studies may have reads toward the end of 2019.
With sales drastically slowing we could see the shares hit $17 or so.
We originally thought $23.50 but that was before we saw the sales begin to plateau last Q.
You may want to check the accuracy of the various read out dates however Harmony I believe is 2 1/2 - 3 years out.
Company is in big trouble.
How can sales plateau on a drug that was launched in 2017 and they just raised prices 17% Q3. This is really sad. Where do you get your facts from?
Vitamanrocks1 profile picture
Because they didn't even meet estimates and the price raises eclipse what would have been an otherwise strong deceleration.
It worked last Q but won't this one.
There 2 price increases are masking a really poor drug uptake.
Vitamanrocks1 profile picture
Thanks for the update..
Retail Investor profile picture
bret, would love to hear your thoughts on chrs...bla filing expected in Q1 http://bit.ly/2t9fnxS
Bret Jensen profile picture
Did buy-write on PTLA using Sept $35 calls for net $25.50 bid...let's see if they hit before close
Bret - Any thoughts on CARA? I am getting motion sickness with this stock. Do you see a major move before earnings? Thanks
Bret Jensen profile picture
On the Jensen Rules for half of original position on that one.

Quick edit for you. In the ACAD Outlook section, the market had a "downturn" and not a "downtown".

The spelling police (aka Mary)
CDXS also showed strength today and even 3 weeks ago.
thet0nzz profile picture
Early in the year, you chose ACAD to be a possible BO in the Fall. Do you still hold that view now and, if so, could you venture a guess as to the BO price range and the possible suitors?
Bret Jensen profile picture
M&A activity would have to pick up again first. Sales ramp on Nuplazid pretty much in line with projections. Market very knee jerk in recent weeks.
I think a lot of the selling was encouraged by notable pharma heckler Adam Feuerstein. He wrote despite 2 price increases Acad still missed. That probably made the revenue slight miss seem much worse. Although he also tried pretty hard to dismiss their latest P2 results with Nuplazid but that had less impact.
Martin Hansen profile picture
Hi bret. About VSTM do you think they Will get the drug approval for Duvelisib? Since the NDA the stock has only gone down. Have not see an article about the company for some time now. :) Regards Martin
Drug doesn’t work well. Talked with Dr and scientists about their drug. The view is they don’t like this drug.
Don’t waste time with that company there is a reason why it’s valued at that now. Find out he history of the drug. It’s essentially a failed drug that Verastem licensed to pull a rabbit out of a hat
Martin Hansen profile picture
Do tell why it is a failed drug? It did get to the primary endpoint.
IlliniJ profile picture
I like OCUL, CLSD and CDTX strength on today's market weakness, all with short-term catalysts....
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