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Gern
Geron has to be the longest running "Game Show" on the biotech channel. Dr. O'Karma, acting wizard, will be currently conjuring up...what...Telomeres, magical cancer cures, stem cells...repair of your chord injury..step right up..er..ops.
We need more semi- militant conference calls..mgmt..bios and otherwise are vastly overcompensated for their actual performance...sad but the title commands a salary and not the person or achievements.
Gern:
I only had a speculative position and sold half of that today for a 15% loss. I'll keep a few shares around as part of my collection of lottery tickets (right beside my leftover PYMX). It was always a speculation based on phase I results, and I don't think the CC clouded the data to date. Rather, it just seems that there will be better opportunities to buy more in the future, if or when the time comes.
I get why the company is not jumping into trials ahead of accruing some more data. But the spend rate in the meantime is bothersome. The CC was amusing, and I guess it's nice to hear a caller call out management. But really you can pose those questions regarding compensation versus achievement to 90% of biotech CEOs. That, in and of itself, didn't drive my decision.
ONXX:
The National Comprehensive Cancer Network (NCCN) adds the combination of carfilzomib, which is sold by Onyx Pharmaceuticals (ONXX), lendalidomide and dexamethasone to its guidelines as an option for treating multiple myeloma patients who are also transplant candidates. The NCCN also adds carfilzomib monotherapy and other agents as a preferred treatment regimen for salvage therapy. The FDA hasn't approved carfilzomib for these uses, so Onyx won't market carfilzomib for them
There's quite a bit of evidence for activation of the JAK/STAT pathway in a variety of different tumors and as part of the resistance mechanism to existing drugs. But it's a significant challenge to find just the right indications, drug combinations and biomarkers.
CLDX:
So refresh my memory again how many patients worth of data this registration trial is based on?
It was less than 20 right?
GERN:
Note that the closest comparable data for GERN's imetelstat vs jakafi is imetelstat in ET vs jakafi in PV - and at first glance that comparison too looks very favorable. (e.g. the mean reduction of jak2 allele burden for jakafi in PV was about 20% - but the least reduction of jak2 for imetelstat in ET was about 20%). But PV too is clearly a different disease since 95% of patients show jak2 mutation (with a median of 50-ish percent allele burden) vs a much lower percentage in ET.
a "more novel" S6K inhibitor
Sequestration is another reason why INCY insiders exercised their options and decided to eliminate the risk of holding the shares.
INCY Insider Sales:
Never great to see. But I can't get all jazzed up about this one. Year over year share price has increased ~25% largely based on good execution, sales projections for this year are strong, and as detailed previously the bigger share price catalysts are likely to report in 2014.
I've seen more cynical insider sales.
I'm pretty sure ARRY has said this is not the case at all and AAG levels do not correlate to patient health.
ARRY:
But, could be a nice bonus if the biomarker does pan out as I'd like to see combo data for 520+kyprolis in low AAG patients.
Yes, I read this.
I agree 520 looks fine, but the AAG stuff is overblown. But this isn't anything specific to ARRY; I've seen similar correlations many times.
OT:
After rereading your post I recognize you are point out the way things are (as you see it) as opposed to the way they should be. Sorry about the misunderstanding.
bloated valuation at ~$500M market cap?
Probably beating a dead horse, but FYI:
SGMO
Seriously, am I the only one that finds sangamo's whole platform far from clinically feasible?
SGMO:
I probably said something to the effect that it would not be nearly as useful in the clinic as it is preclinically / in research. That may be true, if only because it's highly effective and useful in the lab setting.
SGMO:
I remember you said, maybe a couple of years ago, that you thought SGMO's zinc finger technology would never have any utility, or something along that line. Do you still feel that way now?
Also the number 11.7 months
is not the issue it is the increase from the control arm (60%) that is bigger than any other trials.
The folks in the treatment arm have an MOS of 11.7 months, longer than any other trial to date.
ARIA:
>As I understood it, they are no longer looking to establish the MTD. They are fine tuning the phase 2 dose around the highest dose tested to date. They have achieved a dose that provides the necessary level of target kinase suppression so they believe that pushing to an MTD is unwarranted.
BTW: I think it's great they are doing all these trials. They might all pay off handsomely, but the increase in R&D expenses is fairly dramatic. I was surprised at the size of the increase in SG&A. I am worried they might need to do another cash raise mid 2014. There is very little room for error here.<
Welcome!
Always nice to see people break their silence.
You have an interesting schema.
Funny, Thurly you got not one response on here.
Everyone will see one day it will all be public record.
OT:
How in the world can a person used up 1 liter of olive oil a week.
Ariad 4Q / Year End Conference Call
General Impressions: Nothing much to report, so the notes are quite boring. Lots of cash burning this year because they're working hard to expand ponatinib / iclusig use as well as trying to re-play the ponatinib script with the next drug 113. Only small tidbits that I could pick up on was that ponatinib is under-reported in the IMS numbers and that they don't capture academic centers... I think these are the places where earlier / more aggressive use of ponatinib is more likely.
As for 113, they seem to want to maximize the dose and were speaking a lot about EGF-R WT / mutant in lung cancer. I know that they have previously seen some activity here, but the vague chatter makes me think that they're seen a little more since the last update.
Prepared Remarks
- cash used in operations in 2013 will be ~255-265 M
- R&D expenses will be ~238-248 M (8-10% on discovery research, remaining split 3:1 in favour of Iclusig)
- 164 M at the end of 2012, with 310 M raised in early 2013
- 195-205 left in 2013; sufficient to move into 4Q 2014
- currently using sell-through method for iclusig... recognize revenue when shipped to patient
- expected to transition to sell-in (upon shipment) when they have sufficient experience to support this approach
- no guidance right now on 2013 revenues
- Ariad Europe has been set up with country managers and field force is being slowly hired; looking to be ready by July 1, 2013
- MAA under review and expect response in Q3 2013
- Canada, Switzerland and Australia responses due in 2H2013
- EPIC trial continues and anticipate full enrollment by year end; includes interim analysis when 250 patients have been on trial for 1 year (expect mid 2014)
- expect to file for regulatory approval in Japan in mid 2014
- randomized phase 3 SPIRIT3 in collaboration with UK national cancer research institute... switching patients who have been treated in first line TKI upon suboptimal response or treatment failure
- 113... transition to phase 2 expansion cohort in 1H2013
- planning pivotal trial in 113 in ALK+ NSCLC patients resistant to crizotinib
- for iclusig, they have transitioned 50 of the 100 compassionate use patients onto drug
- 100 unique prescribers of iclusig to date (gives a vague floor for the # of prescriptions)
- they say IMS has about 40% capture rate right now on the actual prescriptions; does not capture academic centers
Question and Answer
- no info on whether they've reached MTD on 113... last update was that they're at the 300 mg dose level; next update at ASCO
- they're seeing use of Iclusig in patients following 1, 2 or 3 TKI failures
- last PK data shows that blood levels of 113 exceed IC50 for ALK and EGF-R and their mutants... they say they want to substantially exceed, which suggests they'd be happier to go higher to better get at EGF-R and its variants
- no new drug candidate to hit the clinic this year
8% royalty on global net sales on PD-991 is likely enough to move the needle
Onyx Pharma 4Q / Year End Conference Call
General impressions: Solid company that is executing pretty well right now. I expect that Kyprolis sales will increase nicely this year and they can easily push 200 million. Some important results expected this year for Kyprolis as they're trying to put together a package for European approval. Stivarga royalties are trickling in, and Nexavar continues to make money.
The two biggest issues I see for the company are its continued lack of profitability, and its total lack of an internal research & development arm. The former will presumably be corrected with time, but the latter is a different situation. They're focused on early stage licensing opportunities and they've had decent success to date. But given drug success rates in general, there is a chance that luck may run dry for the next little while. To be honest, I can't really decide if it's more cost effective to have an internal R&D department or try your luck with external opportunities. But given that they've let their internal efforts atrophy, it's safe to say that they don't have much of a choice. I think they'll be ok as long as they go for licensing deals with early stage compounds and/or buyouts of small, focused biotechs. I hope they avoid buyouts that intend to capitalize on revenue streams... Coles should have a picture of Colin Goddard in his office as a reminder of what not to do with your money.
2012 Performance by Drug
Kyprolis
- 64 M sales since July 2012
- 75% of their initial 2000 high volume targets have prescribed the drug at least once; >80% of these have ordered more than once
- >30% of third line MM patient share entering 2013
- they still expect new patient growth for Kyprolis in US
- modest footprint in Europe is based in Switzerland
- waiting for positive results from Aspire and/or Focus for EU submission
- in Japan, Ono pharma is developing Kyprolis
- no guidance for 2013
Stivarga
- 20% royalty from Bayer
- 8 M royalty since very late September 2012 (basically 4Q)
- no guidance for 2013
Nexavar
- global net sales of 861 million (excluding Japan); 3% increase over 2011
- US sales of 257 M for 2012 (8% increase from 2011)
- Rest of World sales of 605 M; double digit growth in Asia Pacific and Latin America (I think they mumbled something about a global demographic tailwind or something or other but I'm not sure)
- there was some pricing pressure in Europe
- for 2013 they project 890-920 M in global sales (excluding Japan); 62-64% commercial margin; assume dollar - euro exchange in mid 1.30s
Looking Ahead
Kyprolis / Proteasome Inhibition
- FOCUS trial planned interim analysis in 2H13; support approvals in relapsed / refractory MM; kyprolis monotherapy versus steroids and optional cyclophosphamide; primary endpoint is overall survival
- ASPIRE trial interim results in 4Q13 or later; support approvals in relapsed MM; PFS primary endpoint; revlimid / low dose dexamethasone +/- kyprolis
- ENDEAVOUR trial, head to head against Velcade, is underway (Started enrolling July 2012); relapsed setting
- planning second head to head front line setting versus Velcade
- Oprozomib, extended release oral proteasome inhibitor: data expected at international myeloma workshop in April
Stivarga
- US: GIST submission filed in August 2012 and has priority review
- EU: mCRC submission filed in May 2012 and action expected 1H!3; plan to submit for GIST after mCRC
- Japan: mCRC application submitted in July 2012 and has priority review; GIST submitted in December 2012
Nexavar
Decision trial in differentiated thyroid had met primary endpoint and they plan to submit sNDA this year (odd that there is no 1H or 2H timing... just said later this year; why so slow?)
Resilience trial in breast cancer; expect enrollment completion in 1H13
Palbociclib (PD-991)
- Pfizer CDK inhibitor
- Pfizer plans phase 3 in advanced breast cancer in 2013
- ER+ / HER2 - advanced breast cancer
- 1.5 million milestone in 2012
- 11.5 million more in milestone payments can be accrued
- 8% royalty on global net sales
tidbit: they expect to incur 60 M in expenses for the other drugs in the phase 3 kyprolis trials
- They had 493 M in cash and investments at YE2012 and raised 352 M in January 2013
Question and Answer
- pomalidomide impact: they don't expect much since they believe new agents just draws more people into treatment and that eventually (unfortunately) these people move through various lines of treatment
- some efforts to test kyprolis at once weekly dosing instead of twice
- they confirmed they don't have internal discovery and that they will simply look to find M&A and licensing opportunities
- oprozomib new formulation: it was meant to address GI toxicity; extended release tablet; they're dose escalating at this time; looking at proteasome inhibition... carfilzomib was 95% and oprozomib is around 88% so they expect / hope for similar efficacy
- 30% improvement for OS is the planning assumption for Focus at the final analysis
As of new clinical data in 2013, I would assume/hope they would present some data from their JAK1 this year.
INCY 4Q / Year end CC
General impressions: A pretty straightforward conference call that focused mostly on their operational execution. Management appears satisfied about sales to date, and I think they gave a strong forward guidance for 2013. On the clinical trial front, this year may not be all that exciting. Some Phase 2 pancreatic cancer data (tough indication) and maybe some Phase 2 psoriasis / diabetic nephropathy data from Lilly's end. Otherwise the bigger trial data for polycythemia vera is likely to report early next year, and RA is a bit of a ways out. I still think this is a good holding for a diversified portfolio.
Jakafi Guidance / Product Sales:
- 2012, expect to see steady growth in treating MF population over the next couple of years... in 2013, 210-225 million net product guidance. This is driven by new starts along with more patients continuing on drug longer. This latter point suggests that they're having success in their strategy to educate physicians on titrating patients starting at low doses for the first 8-12 weeks. They also indicated that they're urging physicians who discontinued a patient to restart them at the lowest dose.
- adjusted net revenues grew by 25% if you exclude the 9 million in deferred revenue recognized in 3rd quarter
- underlying demand as measured by dispensed bottles grew 17%
- inventory grew by 4%
- price increased by 4%
- they expect data on studies in patients with low platelet counts, with the hope that this is added to the label in the second quarter
- 1/3 of prescribers having written for 2 or more patients
- 50% of subscriptions from new, 50% from repeat right now
- 16-18K patients w/ MF and they believe their addressable population is 15K
Other Jakafi indications:
- polycythemia vera: 2 phase 3 trials are ongoing:
Response trial: SPA, in partnership w/ novartis, fully recruited, expect sNDA in 1H14; treatment of patients resistant or intolerant to hydroxyurea
Relief trial: symptomatic benefit in PV (not required for efficacy, but are looking to use it to support label)
- pancreatic cancer trial: results in 2H13 from fully recruited phase 2 trial... OS is primary endpoint
- baricitinib (Lilly): RA P3 program began in Nov 2012 (triggered the 50 million milestone)
- also looking at baricitinib in psoriasis and diabetic nephropathy.. lilly in phase 2 for both
Other drugs in the pipeline:
- JAK1 inhibitors (incb39110 is the first one)... proof of concept in MF, RA and psoriasis
- cMET inhibitor (w/ Novartis)
- indolamine dioxygenase inhibitor-1 (IDO-1) testing in melanoma and ovarian cancer
General financial data:
- ended 2012 w/ 228 million, excludes 50 million milestone received in january
- 43.3 million in 4Q, 136 million full year net product revenues for jakafi; 3.7 million in jakavi royalties from NVS
- 2013 guidance: expect 210-225 net revenue for jakafi; gross-to-net adjustment 8-9%
- contract revenue: 66 million from amortization of upfront payments received from NVS and Lilly
- milestone: 60 million for EU pricing approval for Jakavi
- royalty arrangement: tiered rate ranges from high teens to mid 20s; when NVS receives pricing approval in specific EU countries, record tiered low single digit royalties payable to NVS on net jakafi sales in the US
- therefore, net cost of goods sold in 2013 will be about 2%... 4-6% when they have to make more drug (current drug being used is from lot made for approval and already expensed)
- 260 to 270 million R&D expense in 2013
- SG&A 100-110 million
- interest expense 47 million, non-cash charge of 28 million related to amortization of discount on 4.75% convertible senior notes
Question and Answer:
- 10 mg becoming most frequently dispensed dosage form
- trend toward lower discontinuation / patients staying on treatment longer
- use in intermediate-1 still exception rather than rule
- forecast includes some decline in rate of new patient starts
- high single digit growth quarter over quarter will satisfy low end of revenue range; low double digit growth in units, quarter over quarter will satisfy higher end... this explanation was prompted by a VERY WHINY question from one analyst (Thomas Wei?) who sees the guidance as low and laments the fact that new patient growths are going to stall. I sure hope, for Thomas Wei's model, that incidence of MF increases... I'd hate for him to be disappointed by a lack of new patient growth
- reasonable guesstimate at this point is that they're adding net about 90-100 new patients a month
- they don't see tablet splitting as an issue; price is the same across all dosages, so patients being titrated up and down doesn't have an asymmetric impact on revenues
- asked about what benefit a JAK1 specific would provide over JAK1/2: erythropoietin / thrombopoietin go through JAK2 exclusively... so JAK1 may retain inflammatory benefit while limiting anemia / thrombocytopenia
- most of the remaining questions were by analysts trying to divine future earnings, so if you're into that then have a listen
Yes there is still a long way for 520 to go and I am not assuming anything. But, if it pans out and adds meaningfully as part of a combo (be it with kyprolis, pom, or whatever), wouldn't a company have an incentive to utlize it as a combo, as opposed to having a competitor utilize it with a competing drug as part of a superior regimen? Don't understand why there wouldn't be an incentive for the established company to maintain its edge in such a scenario. All hypothetical at this stage, obviously.
MM:
Wonder if this is net positive or net negative for ARRY and ARRY-520. Negative in the sense that it's another competitor on the market ahead of 520. Positive in the sense that it provides a roadmap for potential approval for 520 (if the data ends up supporting that; early days still for 520). Positive in the sense that approval for CELG here could make ONXX even more open to doing combo trials of kyprolis+520 (these are ongoing now but it's unclear that ONXX has clear interest as I believe these are ISTs). I.e., clear good news for one competitor in the space may put pressure on others to attempt to further differentiate their drug.
#1: Yup. Bought a small company stock at 4 and sold it at 49… it’s now at 6.
Perhaps the better prognostic here is the track record of the pharma?
For what i can remember off the top of my head, Merck kgaa has been in collaborations with IMCL and Biomira / ONTY. I'm sure there are others...
Just thinking that, in general, one would expect a biotech with a smaller market cap to likely have less negotiating leverage compared to a biotech with a much higher market cap and so it's more impressive when a smaller biotech is able to negotiate for impressive milestone payments.
I'm thinking in terms of more apples-to-apples small-cap biotech comparisons to THLD (i.e., sub-$500M market cap).
Does anyone recall a milestone payment that large for just the start of a Phase 3 trial?
INCY / NVS:
The SEC filing language is: "We also could receive tiered double-digit"
For the NVS collaboration, my assumption is that the top end of that tiered double-digit is 20% because that is the maximum explicitly spelled out for the Lilly collaboration. I'm assuming the top end percentage in these biotech deals is rather consistent, but that the sales thresholds that define the tiers are what vary.
I've not read anything concrete as to what percentage the NVS royalty starts at, although ~10% is a good starting point imo. I would put it above the usual ~5% simply because the program, from my point of view, was licensed at a point where there was more certainty in the outcome.
NVS:
They actually managed some decent Jakavi sales at 21 million. It's not moving the proverbial needle for them all that much, but I think it bodes well for INCY in general.