Biotech stocks (NASDAQ:IBB) were bullish again today, surging another 4.1% and extending this week's sector gain to 8% as sentiment emerges that the Trump Administration's attempt to rein in drug prices might not be as harmful as originally feared.
The sentiment got a boost from a NY Times report which cited a draft of an executive order on drug pricing that appears to focus on easing regulatory hurdles for the industry and "largely leaves the drug industry unscathed."
The draft "is a far cry from what [Trump] said on the campaign trail. I don't see anything there that addresses the drug companies getting away with murder, and it appears that is because pharma has captured the process," Patients for Affordable Drugs founder David Mitchell told the Times.
Money flow into biotech has turned decidedly positive. The iShares Nasdaq Biotechnology ETF (IBB +3%) has rallied almost 8% since Friday.
Key drivers appear to be reduced anxiety over drug prices with the GOP's rebooted healthcare plan and President Trump's expected executive order, looming M&A deals and expectations of bullish Q1 results from Big Biopharma.
Interim data from a Phase 1 clinical trial assessing the combination of Spectrum Pharmaceuticals' (SPPI +0.2%) FOLOTYN (pralatrexate) and Celgene's (CELG +1.8%) ISTODAX (romidepsin) in relapsed/refractory peripheral T-cell lymphoma (PTCL) showed a positive treatment effect. The results were presented at EULAR in Lugano, Switzerland.
The overall response rate in the PTCL population was 71% (n=10/14), including four complete responders.
Treatment was no walk in the park, though. There were five dose-limiting toxicities (DLTs) in one cohort [grade 4 (life threatening) thrombocytopenia (n=3), one grade 4 pancytopenia and one grade 4 neutropenia - all attributed to romidepsin]. There were three DLTs in another cohort [one grade 4 sepsis and two grade 3 (serious) oral mucositis].
The most common grade 3/4 toxicities were anemia (29%); thrombocytopenia (28%); febrile neutropenia (14%); oral mucositis (14%) and others (7 - 6%).
A Phase 2 study assessing the combo in PTCL is now recruiting patients.
Biotech is lower on the session, but not Celgene (CELG +1.6%) after the team at Leerink Swann upgrades to Outperform.
A cheap valuation, near-25% discount to the $150 price target, above-consensus estimates, expected positive trajectory for Q2, and imminent pipeline validation events are the reasons for the upgrade, they say.
The team's revenue estimates for 2017-19 are 1%-5% above the Street, and EPS 2%-6% higher.
Based on those numbers, Celgene by mid-2018 would be trading at a forward earnings multiple of just 10.6x and a revenue multiple of 4.9x - the very bottom of both large-cap biotech and pharma names.
Under the terms for the agreement, Dragonfly will receive an upfront payment of $33M, milestones and royalties on net sales. Celgene will have the exclusive option to in-license up to four candidates for the treatment of acute myeloid leukemia, multiple myeloma and additional blood cancers.
Bluebird bio (BLUE +8%) and collaboration partner Celgene (CELG -0.5%) announce positive early-stage data on anti-BCMA CAR-T candidate bb2121 in patients with multiple myeloma. The results are being presented at ASCO.
Results from the Phase 1 study showed a 100% (n=15/15) objective response rate across all cohorts. No dose-limiting toxicities were observed.
The aim of the trial is to determine the recommended dose for a Phase 2 study.
Candidate bb2121 targets B-cell maturation antigen (BCMA), a cell surface protein expressed in most multiple myeloma cells in addition to normal plasma cells.
Management will host a live webcast at 6:30 pm ET to discuss the results.
Beaten-up biotechs are finally showing strength. The iShares Nasdaq Biotech ETF (IBB +1.1%) has rebounded 3.5% over the past three sessions since bottoming at 283.70 on Tuesday, breaking out of the downtrend that started in early May.
Celgene (NASDAQ:CELG) is up a fraction premarket on the heels of its announcement of positive results from a second Phase 3 clinical trial, RADIANCE, assessing ozanimod (formerly RPC1063) for the treatment of relapsing multiple sclerosis (RMS).
The study met the primary endpoint of reducing annualized relapse rate compared to Biogen's (NASDAQ:BIIB) Avonex (interferon beta-1a).
The company reported successful results from its first Phase 3, SUNBEAM, in February.
Detailed results will be submitted for presentation at an upcoming medical conference. Global regulatory filings will commence by year-end.
Raymond James downgrades shares to Market Perform from Outperform, not so much because of the death but the expectations for KTE-C19's commercial prospects largely are priced in at current share levels.
The news has weighed down shares of other drug makers focused on immunononcology therapies, such as Juno Therapeutics (JUNO -6.6%), Tesaro (TSRO -5.7%) and Incyte (INCY -3.8%); the Nasdaq Biotech ETF (IBB -2.2%) swirls down to lows of the day.
Also, biotech execs including the CEOs of Vertex Pharma (VRTX +0.2%), Regeneron (REGN -1.3%) and Celgene (CELG -3.5%) plus the head of the National Institutes of Health are meeting with White House officials to defend government sponsored research in the wake of Pres. Trump's budget proposal seeking deep cuts.
Celgene (CELG -1.8%) is downgraded to Hold from Buy at Argus, which thinks the company may be getting too reliant on Revlimid for revenue, as the cancer drug accounted for nearly two-thirds of sales in Q1.
Revlimid had accounted for an average 62.4% of company sales over the previous four quarters but edged up to 64% last quarter, Argus says.
The firm also is concerned that steep discounting for Otezla, CELG's treatment for plaque psoriasis and psoriatic arthritis, may pressure gross margins; CELG cut the price of Otezla to boost purchases by large institutions, causing sales of the drug to miss expectations by $95M.
On the positive side, Argus says CELG has a "formidable new drug pipeline as well as potential new indications for existing drugs."
In a partnership with Celgene (NASDAQ:CELG), demcizumab was being tested with two chemotherapy drugs in previously untreated metastatic pancreatic cancer, but OMED now says the trials will be discontinued.
Also, Bayer (OTCPK:BAYRY) says it will not use its option to license two other OMED cancer drugs, vantictumab and ipafricept, "for strategic reasons."
OMED says it will keep the global development and commercialization rights to both drugs starting in June.