SPECIAL REPORTS | Updated: 25-Jul-13
Strategies for profiting from various market-driven themes or events using stocks and/or options.
Weekly Biotech/Pharma Volatility Tracker -- GTXI slide continues; BCRX surges on positive data
GTXI shares have declined 25% on continued concern about the upcoming release of Phase 3 data for enobosarm. BCRX shares have more than doubled on positive Phase 1 data. Check out the "Recent Events" section and Anticipated Movers list below for more information on these catalysts and to identify others in the coming weeks. Finally, be sure to use our Calendar of Upcoming Events to prepare for the many catalysts scheduled for 2013.
Recent Events
GTx (GTXI) shares have declined approximately 25% over the course of the week. Last Friday the company announced a corporate update and its second quarter financial results. Management said that the highly anticipated topline results from the company's Phase 3 trial of enobosarm for the treatment of muscle wasting in patients with advanced non-small cell lung cancer will not be provided until, "later this quarter." Shares hit 52-week highs of $7.24 on June 18 in anticipation of the enobosarm data but have pulled back significantly over the past few weeks on concerns that the run up was overdone. GTx was listed on our anticipated movers table last week.
BioCryst Pharmaceuticals (BCRX) has had an amazing week, rising from last Friday's opening price of $2.15 to highs of $5.02 yesterday. The move began with an upgrade to Market Outperform from Market Perform at JMP securities last Friday, which sent shares higher by about 5%. On Monday the company announced that its Phase 1 clinical trial of orally-administered BCX4161 in healthy volunteers successfully met all of its objectives. Management said, "The safety, tolerability, drug exposure and on-target kallikrein inhibition results of this Phase 1 trial strongly support advancing the development program into a Phase 2a study in hereditary angioedema (HAE) patients." BCX4161 is a novel, selective inhibitor of plasma kallikrien in development for the prevention of attacks in patients with HAE. Biocryst was listed on our Anticipated Movers table last week.
Sarepta Therapeutics (SRPT) jumped back into the conversation on Wednesday after announcing that it plans to submit an NDA to the FDA for eteplirsen for the treatment of Duchenne muscular dystrophy (DMD) in the first half of 2014. There was serious concern that Sarepta's clinical data would not be sufficient to support an approval, however, it appears as if the FDA is willing to be flexible. The FDA would not commit to declaring dystrophin an acceptable surrogate endpoint under the CFR 314 Subpart H Accelerated Approval pathway prior to the NDA filing. Shares spiked sharply higher by 20+ points initially but ended up down nearly 20% at the end of the day. Sarepta was listed on our Anticipated Movers table last week.
OXiGENE (OXGN) shares spiked higher by as much as 54% last Friday after announcing it received orphan drug designation from the European Medicines Agency for ZYBRESTAT (fosbretabulin tromethamine) for the treatment of ovarian cancer. Shares have given up nearly all gains over the course of the week.
Shares of Celsion (CLSN) also jumped higher last Friday on the news that the company entered into a Memorandum of Understanding with Zhejiang Hisun Pharmaceutical to pursue ongoing collaborations for the continued clinical development of ThermoDox as well as the technology transfer relating to the commercial manufacture of ThermoDox for the greater China territory. In what seems to be a trend among cheap biotech stocks receiving good news, shares were unable to hold on to much of the gains and are currently only up slightly from pre-announcement levels.
Uroplasty (UPI) shares surged higher by approximately 35% on Tuesday. The company announced the completion of a review of its internal control over financial reporting and said it did not result in any changes in previously announced financial results or financial statements for prior reporting periods.
Transition Therapeutics (TTHI) received two pieces of good news. Last Thursday, after the close, the company announced that the FDA granted Fast Track Designation to the development program for ELND005 which was submitted for the treatment of Neuropsychiatric Symptoms in Alzheimer's disease. Tuesday evening the company announced the exclusive licensing of worldwide rights to a novel small molecule transcriptional regulator, TT-601, from Eli Lilly (LLY) for the treatment of osteoarthritis pain. TT-601 has completed preclinical development to date and Transition anticipates can enter the clinic in the first half of 2014. The stock is up approximately 40% since last week's report.
Array Biopharma (ARRY) announced positive results from its Phase 2 trial or ARRY-502 for the treatment of mild to moderate persistent allergic asthma. ARRY-502 achieved the primary endpoint, significant improvement in pre-bronchodilator Forced Expiratory Volume in one second (FEV1), a measure of lung function. Shares rose approximately 10% on the news.
CombiMatrix (CBMX) announced it entered into a contractual agreement with the health insurer, Blue Shield of California, for coverage of its diagnostic laboratory services. Blue Shield of California is the third largest health insurance carrier in the state, adding over 3 million covered lives and enabling its members access to CombiMatrix's molecular diagnostic solutions and comprehensive clinical support -- specializing in prenatal, miscarriage and pediatric healthcare. Shares rose as much as 28% on the news.
Neostem (NBS) shares are up over 20% this week. The company announced on Tuesday that it has met the listing criteria for the NASDAQ Capital Market and will move its listing from NYSE MKT to the NASDAQ Capital Market effective with the start of trading on August 5, 2013.
With earnings season well underway a number of stocks are seeing large moves. Notable gainers after reporting earnings include Healthstream (HSTM +12%), Align Technologies (ALGN +9%), PetMed Express (PETS +9%), Illumina (ILMN +11%), Boston Scientific (BSX +11%), and Medidata Solutions (MDSO +18%). A few decliners on earnings are Intuitive Surgical (ISRG -11%), Community Health Systems (CYH -9%), and Sequenom (SQNM -30%).
Two stocks have declined after pricing offerings: Oxygen Biotherapeutics (OXBT -33%) and AEterna Zentaris (AEZS -22%).
Trading Ideas, Anticipated Movers & Upcoming Events
Anticipated Movers:
Volatility remains high in several stocks on our Anticipated Movers list, most notably GTXI and VICL. One new addition to the list is OPTR. Volatility moderated or near term catalysts have been eliminated in BCRX, SRPT, OREX, and MDVN, which have been removed from the list.
Looking at the bigger list, implied volatility is elevated in a large number of biotech/pharmacy stocks, including the following: GTXI, VICL, MNKD, MPE, LNK, PTR, CNDO, and DNDN. These elevated volatility levels are indicative of expectations for greater volatility in these stocks in the future.
Anticipated Movers Table:
Ticker Price Implied Volatility Historical Volatility Implied vs. Historical 1-day move based on historical Current implied 1-day event SD Event Date
GTXI 4.40 256% 102% 2.5x 6.4% 17.3% GTx is a is a biopharmaceutical company focused on the treatment of cancer, cancer supportive care, and other serious medical conditions. On April 15, 2013 the company announced that an independent Data Safety Monitoring Board recommended GTx continue its two pivotal Phase 3 clinical trials of enobosarm (GTx-024) for the prevention and treatment of muscle wasting in patients with advanced non-small cell lung cancer. The company expects to receive topline data in the third quarter of 2013. A negative article by biotech blogger Adam Feuerstein sent shares lower by approximately 25% on July 10. By 9/30/2013
VICL 3.46 173% 40% 4.4x 2.5% 11.2% Vical's lead development program, Allovectin, is currently in a Phase 3 registration trial vs. chemotherapy in patients with metastatic melanoma. A survival data sweep conducted in March 2013 confirmed that the target number of death events for the secondary endpoint (overall survival) should be reached in mid-2013. The independent assessment and adjudication process for the primary endpoint (response rate at 24 weeks or more after randomization) is advancing through final audits and quality checks, and the company expects the adjudicated response data to be locked in July 2013. Top-line results for both endpoints are expected to be released during the third quarter of 2013. The company will report second quarter financial results on Thursday, August 1, 2013. By 9/30/2013
MNKD 7.16 150% 63% 2.4x 4.0% 10.2% MannKind focuses on the discovery, development and commercialization of therapeutic products for patients with diseases such as diabetes. On June 17, 2013 the company announced that all follow-up visits have been completed for the patients enrolled in Study 175, a Phase 3 clinical study of AFREZZA (insulin human [rDNA origin]) inhalation powder, an investigational, ultra rapid-acting mealtime insulin therapy, administered using MannKind’s next-generation inhaler. MannKind expects to release data from this study later this summer. Mid 2013
AMPE 5.91 128% 55% 2.3x 3.4% 8.8% Ampio Pharmaceuticals focuses on the development of therapies to treat prevalent inflammatory conditions for which there are limited treatment options. Ampion, for the reduction of pain in osteoarthritis of the knee, is being evaluated in the SPRING trial. Clinical results are expected in the third quarter of 2013. By 9/30/2013
NLNK 17.27 127% 52% 2.5x 3.3% 8.7% NewLink Genetics' portfolio includes biologic and small molecule immunotherapy product candidates intended to treat a wide range of oncology indications. The company recently presented positive results from multiple Phase 1 and Phase 2 trials at ASCO. NewLink is currently conducting a Phase 2b/3 trial comparing tergenpumatucel-L to docetaxel for patients with previously treated NSCLC. Analysts at MLV & Co and Cantor Fitzgerald expect interim data from the company's Phase 3 trial of algenpantucel-L (HyperAcute pancreas) by mid-year. Mid 2013
OPTR 13.29 108% 44% 2.4x 2.8% 7.4% Optimer Pharmaceuticals' DIFICID, a macrolide antibacterial drug, was approved by the FDA on May 27, 2011, for the treatment of Clostridium difficile -associated diarrhea. The company has been the subject of takeover rumors for months, with reported interest from Cubist Pharmaceuticals, Astellas Pharma, Salix Pharmaceuticals, and AstraZeneca. Reuters said that Cubist offered to buy the company for $20 per share in August of last year. Ongoing
CNDO 7.86 103% 62% 1.7x 3.9% 7.6% Coronado Biosciences' two principal pharmaceutical product candidates in clinical development are: TSO (Trichuris suis ova or CNDO-201), a biologic for the treatment of autoimmune diseases, such as Crohn's disease, ulcerative colitis and multiple sclerosis; and CNDO-109, a biologic that activates natural killer (NK) cells, for the treatment of acute myeloid leukemia (AML), multiple myeloma and solid tumors. On July 1, 2013 the company announced it completed enrollment of TRUST-I, its Phase 2 clinical trial with TSO in 250 Crohn's disease patients. Coronado expects to report top-line data in the fourth quarter of 2013. A second interim analysis of data from the TRUST-II trial in Europe is also expected in the second half of 2013. The company will report second quarter financial results on Monday, August 5, 2013. 8/5/2013
DNDN 4.50 101% 36% 2.8x 2.3% 6.8% Dendreon's first product, PROVENGE, for the treatment of prostate cancer, was approved by the FDA in April 2010. The company has recently undergone cost-saving measures and has ongoing clinical trials combining PROVENGE and other cancer drugs. On June 28, 2013 the company announced that the European Medicines Agency Committee for Medicinal Products for Human Use adopted a positive opinion recommending PROVENGE for approval. The company is scheduled to report second quarter financial results on August 8, 2013 after the close. 8/8/2013
*The Current implied 1-day standard dev. is the 1-day, 1-standard deviation move in the stock, based on the implied 1-day event volatility. Based on current options prices, the underlying stock is expected to remain within a +/- 1 standard deviation range, about 2/3 of the time, and within a +/- 2 standard deviation range about 95% of the time.
Calendar of Upcoming Biotech/Pharmacy Events
= Highly Anticipated
March 2013
Date Ticker Company Optionable Event Product Treatment Briefing Notes/Links
3/1/2013 ZGNX Zogenix N PDUFA Zohydro ER Chronic pain DELAYED
On February 26, 2013 Zogenix was informed by the FDA that it is unlikely to receive an action letter for Zohydro ER (hydrocodone bitartrate extended-release capsules) by the PDUFA date of March 1, 2013. The FDA indicated that they are preparing to take action on the Zohydro NDA in the summer 2013. While they declined to provide any specific reasons for the delay, Zogenix has concluded the FDA are working on several broader opioid-related issues that need to be addressed prior to an action.
July 2013
Date Ticker Company Optionable Event Product Treatment Briefing Notes/Links
7/19/2013 ALPMY
(OTC listing) Astellas Pharma N PDUFA Astagraf XL Prophylaxis of organ rejections APPROVED
On July 19, 2013 the FDA approved ASTAGRAF XL (tacrolimus extended-release capsules) for the prophylaxis of organ rejection in patients receiving a kidney transplant with mycophenolate mofetil (MMF) and corticosteroids, with or without basiliximab induction.
7/23/2013 ABBV AbbVie Y Advisory Committee Meeting Humira (adalimumab) Spondyloarthritis NEGATIVE VOTE
On July 23, 2013 the Arthritis Advisory Committee voted against recommending approval of HUMIRA (adalimumab) for the proposed indication of active non-radiographic axial spondyloarthritis in adults with objective signs of inflammation by elevated CRP or MRI, who have had inadequate response or are intolerant to nonsteroidal antiinflammatory drugs.
7/27/2013 FRX Forest Laboratories Y PDUFA Levomilnacipran Major Depressive Disorder On September 27, 2012 Forest Laboratories and Pierre Fabre Laboratories announced that Forest submitted an NDA to the FDA for levomilnacipran, a serotonin norepinephrine reuptake inhibitor (SNRI) for the treatment of Major Depressive Disorder (MDD) in adults. The expected PDUFA date is July 27, 2013.
August 2013 & Beyond
Date Ticker Company Optionable Event Product Treatment Briefing Notes/Links
8/2/2013 TKPYY Takeda N PDUFA Vortioxetine Major Depressive Disorder On October 2, 2012 Takeda Pharmaceutical and H. Lundbeck A/S announced the submission of an NDA to the FDA for investigational agent vortioxetine (Lu AA21004) for the treatment of major depressive disorder in adult patients. The estimated PDUFA date is August 2, 2013.
8/11/2013 BAYRY Bayer N PDUFA Riociguat Chronic thromboembolic pulmonary hypertension On April 8, 2013 the FDA granted a priority review for Bayer Healthcare's riociguat for the treatment of inoperable chronic thromboembolic pulmonary hypertension (CTEPH) or with persistent or recurrent CTEPH after pulmonary endarterectomy (PEA) and pulmonary arterial hypertension (PAH). The PDUFA date is expected to be August 8, 2013.
8/26/2013 QXRPY
(OTC Listing) QRxPharma N PDUFA (NDA) Moxduo Acute pain On March 14, 2013 the FDA set August 26, 2013 as the PDUFA date for QRxPharma's NDA for MOXDUO for the treatment of acute pain. An FDA Advisory Committee will discuss the NDA on July 17.
By
8/31/2013
(estimated) MRK Merck Y PDUFA (NDA) Sugammadex sodium injection Reversal of neuromuscular blockade Merck announced on January 7, 2013 that the resubmission of the NDA for sugammadex sodium injection was accepted by the FDA. Merck expects the review to be completed in the first half of 2013. Sugammadex sodium injection is the company's investigational agent for the reversal of neuromuscular blockade (NMB) induced by rocuronium or vecuronium (neuromuscular blocking agents). An FDA Advisory Committee will review the NDA on July 18, 2013.
9/3/2013 GSK GlaxoSmithKline Y PDUFA Trametinib Metastatic melanoma On May 1, 2013 the FDA extended the PDUFA date of trametinib by three months to September 3, 2013. The extension is to allow the FDA sufficient time to review the submission of additional data. Trametinib, a MEK inhibitor, is for the treatment of patients with unresectable or metastatic melanoma with BRAF V600 mutations as detected by an FDA-approved test.
9/6/2013 AUXL, BSTC Auxilium and BioSpecifics Technologies Y PDUFA XIAFLEX Peyronie's disease On December 27, 2012 the FDA accepted for filing and granted standard review status to Auxilium's sBLA for XIAFLEX (collagenase clostridium histolyticum or CCH), a novel, in-office biologic therapy for the potential treatment of Peyronie's disease. The PDUFA date is September 6, 2013. BioSpecifics is partnered with Auxilium for XIAFLEX.
9/13/2013 DCTH Delcath Y PDUFA Melblez Kit Unresectable metastatic ocular melanoma in the liver On April 8, 2013 Delcath announced that the FDA extended the PDUFA date of Melblez Kit (Melblez (melphalan) for Injection for use with the Delcath Hepatic Delivery System), the company's proprietary drug/device combination product for the treatment of patients with unresectable ocular melanoma metastatic to the liver. The PDUFA date is now September 13, 2013. On May 2, 2013 the FDA's Oncologic Drugs Advisory Committee voted 16-0 that the benefits of treatment with the Melblez Kit do not outweigh the risks.
9/14/2013 SGEN Seattle Genetics Y PDUFA (sBLA) ADCETRIS (brentuximab vedotin) Hodgkin lymphoma and systemic anaplastic large cell lymphoma On May 14, 2013 the FDA accepted Seattle Genetics' sBLA supporting the use of ADCETRIS (brentuximab vedotin) for retreatment and extended duration beyond 16 cycles of therapy in relapsed Hodgkin lymphoma (HL) and systemic anaplastic large cell lymphoma (sALCL). The FDA is expected to take action on the application by September 14, 2013. ADCETRIS is an antibody-drug conjugate (ADC) directed to CD30, a defining marker of HL and sALCL, that was granted accelerated approval by the FDA in August 2011 for relapsed HL and relapsed sALCL.
9/21/2013 CELG Celgene Y PDUFA (sNDA) Abraxane Pancreatic Cancer On May 23, 2013 Celgene announced that the FDA assigned a Priority Review designation to the sNDA for the use of ABRAXANE (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) in combination with gemcitabine for the first–line treatment of patients with advanced pancreatic cancer. The PDUFA date for the sNDA is September 21, 2013.
9/27/2013 GIVN Given Imaging Y PDUFA PillCam COLON 2 Visualization of the lower gastrointestinal tract On November 27, 2012 Given Imaging filed an FDA application seeking regulatory clearance to market its PillCam COLON 2 for visualization of the lower gastrointestinal tract. Given's CEO said he expects approval by the end of the third quarter or the beginning of the fourth quarter.
9/28/2013 JNJ Johnson & Johnson (via Janssen R&D) and Medivir (private) Y PDUFA Simeprevir (TMC435) Hepatitis C On March 28, 2013 Janssen R&D (a JNJ company) and Medivir submitted an NDA to the FDA seeking approval for simeprevir (TMC435), an investigational NS3/4A protease inhibitor, administered as a 150 mg capsule once daily with pegylated interferon and ribavirin for the treatment of genotype 1 chronic hepatitis C in adult patients. The application was granted a priority review. The anticipated PDUFA date is September 28, 2013.
10/3/2013 LGND, PFE Ligand Pharmaceuticals and Pfizer Y PDUFA Bazedoxifene / conjugated estrogens Vasomotor symptoms and vulvar and vaginal atrophy On December 13, 2012 the Ligand Pharmaceuticals and Pfizer announced that the FDA accepted for review an NDA for bazedoxifene/conjugated estrogens (BZA/CE), a potential new medicine for non-hysterectomized women for the treatment of moderate-to-severe vasomotor symptoms and vulvar and vaginal atrophy associated with menopause, as well as the prevention of postmenopausal osteoporosis. The PDUFA date is October 3, 2013.
10/6/2013 JNJ Johnson & Johnson (via Janssen R&D) Y PDUFA (sBLA) Stelara Psoriatic arthritis On December 6, 2013 Janssen Biotech and Janssen Biologics announced the submission of an sBLA to the FDA requesting approval of STELARA (ustekinumab) for the treatment of adult patients with active psoriatic arthritis. Janssen Biotech is one of the Janssen Pharmaceutical companies of Johnson & Johnson. The estimated PDUFA date is October 6, 2013.
10/14/2013 ATRS Antares Pharma Y PDUFA Otrexup Rheumatoid arthritis On December 17, 2013 Antares Pharma announced the submission of an NDA to the FDA for OTREXUP, a combination product for the delivery of methotrexate (MTX) using Medi-Jet technology. OTREXUP was developed for easy subcutaneous administration of MTX to enhance the treatment of rheumatoid arthritis, poly-articular-course juvenile RA and moderate to severe psoriasis. The PDUFA date is October 14, 2013.
10/16/2013 AMRN Amarin Y Advisory Committee Meeting Vascepa High triglycerides The FDA will convene an advisory committee on October 16, 2013 in connection with the its review of the sNDA seeking approval for the use of Vascepa (icosapent ethyl) capsules as an adjunct to diet in the treatment of adult patients with high triglycerides (TG =200 mg/dL and <500 mg/dL) with mixed dyslipidemia. The FDA has assigned a PDUFA date of December 20, 2013 for completion of its review of the sNDA.
10/17/2013 PSDV pSivida Y PDUFA Iluvien Chronic diabetic macular edema On May 1, 2013 pSivida announced that the FDA acknowledged receipt of the resubmission of the NDA for ILUVIEN for treatment of chronic diabetic macular edema (DME) and stated that the resubmission was considered a complete, class 2 response to the FDA’s November 2011 complete response letter. The new PDUFA date is October 17, 2013.
10/21/2013 AMAG AMAG Pharmaceuticals Y PDUFA (sNDA) Feraheme Iron deficiency anemia On March 6, 2013 the FDA accepted AMAG Pharmaceutical’s sNDA for Feraheme (ferumoxytol) Injection for Intravenous use, which was submitted to the FDA in December 2012. The sNDA requests FDA approval to expand the indication for ferumoxytol beyond the current indication for the treatment of iron deficiency anemia (IDA) in adult patients with chronic kidney disease (CKD) to adult patients with IDA who have failed or could not take oral iron treatment. The PDUFA date is October 21, 2013.
10/21/2013 CBST Cubist Pharmaceuticals Y PDUFA (sNDA) Entereg GI recovery On December 21, 2012 Cubist announced that it submitted an sNDA to the FDA requesting approval for the use of ENTEREG (alvimopan) to accelerate GI recovery following any surgery that includes a bowel resection with primary anastomosis; expanded from the current indication in patients requiring surgery for colorectal disease. The estimated PDUFA date is October 21, 2013.
11/4/2013 BIIB Biogen Idec Y PDUFA (BLA) Alprolix Hemophilia B On March 4, 2013 the FDA accepted Biogen's BLA for the marketing approval of ALPROLIX (recombinant factor IX Fc fusion protein, or rFIXFc) for the treatment of hemophilia B and granted the company a standard review timeline. The expected PDUFA date is November 4, 2013.
11/11/2013 BIIB Biogen Idec Y PDUFA (sNDA) Tysabri Multiple sclerosis On January 16, 2013 Biogen Idec and Elan submitted an application to the FDA requesting updates to the TYSABRI (natalizumab) labels. The application requests an expanded indication that would include first-line use for people living with certain relapsing forms of multiple sclerosis who have tested negative for antibodies to the JC virus. Biogen completed a purchase of full rights and control of TYSABRI from Elan on April 2, 2013. The expected PDUFA date is November 11, 2013.
11/27/2013 BMY / AZN Bristol-Myers Squibb, AstraZeneca Y PDUFA (BLA) Metreleptin Metabolic disorders associated with lipodystrophy On June 4, 2013 the FDA accepted and granted a Priority Review designation for the Biologics License Application (BLA) for metreleptin, an investigational agent for the treatment of metabolic disorders associated with inherited or acquired lipodystrophy (LD). The expected PDUFA date is November 27, 2013.
By 11/28/2013 (estimated) SNY Sanofi Y PDUFA (sBLA) Lemtraded Relapsing multiple sclerosis On January 28, 2013 the FDA accepted for review Genzyme's sBLA seeking approval of LEMTRADA (alemtuzumab) for the treatment of relapsing multiple sclerosis. Genzyme is a Sanofi company. The company said it expects FDA action in late 2013.
-- Tyler Desmond
