Biotech Analysis Central Pharma News: GlaxoSmithKline Passes Along Pipeline, Pulse Impresses, Celldex's Failure

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Includes: CLDX, GSK, PLSE, RHHBY
by: Terry Chrisomalis
Summary

GlaxoSmithKline hands over rare disease unit over to Orchard Therapeutics in exchange for a 19.99% stake and board seat.

Pulse Biosciences obtains its first set of positive results using its Nano-Pulse stimulation technology to treat patients with senile warts.

Celldex Therapeutics fails phase 2 study treating patients with metastatic triple-negative breast cancer.

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

GlaxoSmithKline Passes Along Rare Disease Unit To Orchard Therapeutics

News: GlaxoSmithKline (NYSE:GSK) recently announced that it had signed a deal to transfer its rare disease pipeline unit over to Orchard Therapeutics. In order for GSK to hand over its rare disease pipeline, it wanted to receive a 19.9% stake and a board seat on Orchard Therapeutics. This deal gives Orchard a drug known as Strimvelis, which is an EMA-approved drug that treats patients with a rare disease that causes immunodeficiency. On top of that, Orchard gets two late-stage assets and the rights for three programs in preclinical testing.

Analysis: This plays out well for GlaxoSmithKline for a few reasons. First, it doesn't have to spend any resources on these programs. That means should the remaining products in the pipeline get to market, it will obtain royalty payments for sales produced. In addition, the 19.9% stake will be useful. That's because should the stock eventually rise to higher levels, GSK could sell its stake in Orchard for a profit. The best reason of all is that it allows GSK to focus on its cell and gene therapy platforms. In my opinion, this makes a lot of sense. That's because it is better for the company to focus on a sector where it has a lot of strengths, as opposed to working on products that it has no expertise in.

Pulse Biosciences Obtains Positive Results For its First Study In Senile Warts

News: Pulse Biosciences (NASDAQ:PLSE) recently reported that it had obtained positive results in treating patients with seborrheic keratosis, also known as senile warts. It was stated that by using its treatment with its Nano-Pulse Stimulation technology, the company was able to show that 82% of treated lesions were cleared or just mostly cleared after 106 days.

Analysis: This was a good demonstration for Pulse, because it demonstrated that its Nano-Pulse stimulation technology was able to greatly reduce lesions with only a single treatment to the affected area. However, there is an even bigger picture at hand to consider. This involves the ability to use the Nano-Pulse stimulation technology to treat other benign lesions (benign meaning that they are non-cancerous lesions). In addition, it gives Pulse the option to go after non-benign lesions as well. This expands upon the market opportunity that the company can go after. That means this first study not only reaffirmed positive preclinical results, but it also notified Pulse on what other skin lesions it could go after.

Celldex Therapeutics Tumbles On Phase 2 Trial Failure

News: Recently, Celldex Therapeutics (NASDAQ:CLDX) announced that it had failed its phase 2 trial treating patients with metastatic triple-negative breast cancer. The company was hoping that its drug glembatumumab vedotin would improve progression-free survival for these patients. Unfortunately, the primary endpoint was not met, and just about posted the same PFS rate as the comparator drug for the study, which was Xeloda marketed by Roche (OTCQX:RHHBY). It was noted that those treated with glembatumumab vedotin obtained a PFS rate of 2.9 months, versus those on Xeloda with a PFS of 2.8 months. That gave a p-value of p = 0.76, which was not statistically significant.

Analysis: The downside now is that Celldex has announced that it is completely abolishing all programs associated with glembatumumab vedotin. I believe that the drop in the stock price offers an attractive entry point once it stabilizes. That's because the company still has a large pipeline, which means the failure for this phase 2 study in patients with metastatic triple-negative breast cancer should not be a major roadblock for the company. Celldex may take some time to recover after this failure, but it still has multiple shots on goal. It remains a very risky speculative biotech to trade, but the additional drugs in the pipeline offer additional opportunities.

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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