|5 BioPharmas With Near Term Catalysts|
|By Scott Matusow|
|Friday, 11 October 2013 08:00|
In the developmental biopharma segment of the market that we follow daily at stockmatusow, stock prices sometimes experience volatile moves, especially as a near-term catalyst event approaches. Today we look at 5 developmental biopharmas' that should see significant upward price movements due to these companies having significant catalysts coming up in the near future.
MabTheraSC is a subcutaneous applied (injected) chimeric monoclonal antibody against the protein CD20, which is primarily found on the surface of immune system B cells. MabTheraSC is designed to destroy B cells and is therefore used to treat diseases which are characterized by excessive numbers of B cells, overactive B cells, or dysfunctional B cells. This includes many lymphomas, leukemias, transplant rejection, and autoimmune disorders. Halozyme uses its propreitary ENHANZE Technology as the platform for the delivery of proprietary small and large molecules.
The committee meets October 21st through the 24th, and many investors are expecting the news to be released before the end of this month. The CHMP is like a European version of an FDA Advisory Commitee Meeting (ADCOMM), in the sense that a recommendation or opinion is given for approval or rejection.
We expect this announcement to mirror what happened with Halo's approved product, Herceptin. In June, the CHMP announced a positive opinion for Herceptin and the stock rallied nearly $2 in one day. A similar situation is setting up for Halo with MabTheraSC and we feel it has yet to be valued into the stock.
Additionally, on September 30th, the company announced mature patient progression free survival (PFS) and ongoing overall survival (OS) data from its Phase 1b trial of PEGPH20 (PEGylated Recombinant Human Hyaluronidase) in combination with gemcitabine for the treatment of patients with stage IV metastatic pancreatic cancer. The data from both PFS and OS indicates a potential break-through clinical benefit of using PEGPH20 with gemcitabine in patients with high levels of tumor associated hyaluronan (HA).
Also of note, company director Kathryn E. Falberg bought $681.6K of the company's stock, at an average cost of $6.82 a share. At StockMatusow, we strongly believe when a high level company insider buys these many shares in the open market, it represents a very bullish sentiment for a company's long term prospects. Falberg is also a director at Jazz Pharma (JAZZ), when in 2010, she bought 50,000 shares of Jazz in the open market for $8.72. Currently, Jazz trades for $84.76 a share.
Investors might be interested in an in-depth video we found on Halozyme's pancreatic treatment potential. After watching it, we were very impressed with the product's potential.
Celldex Therapeutics (CLDX) will release Phase II data of CDX-110 (rindopepimut) in combination with Avastin for refractory glioblastoma multiforme (GBM) - Expect to report data from this study at the Society for Neuro-Oncology (SNO) Annual Meeting in November 21-24 2013.
Glioblastoma is the most common and most aggressive malignant primary brain tumor in humans, involving glial cells and accounting for 52% of all functional tissue brain tumor cases and 20% of all intracranial tumors. Rindopepimut is designed to target the tumor specific oncogene EGFRv3, a functional and permanently activated mutation of the epidermal growth factor receptor.
The company also expects to present Phase II data for CDX-1135 which is indicated for dense deposit disease (DDD) by the end of the current quarter. CDX-1135 is a molecule that inhibits a part of the immune system called the complement system.
The complement system helps or "complements" antibodies and phagocytic cells to clear pathogens from an organism. It is part of the immune system called the innate immune system. Amplification of the response is complemented which activates the cell-killing membrane attack complex.
Celldex has been on a tear in 2013 as investors have been speculating just how successful the company could become if data remains positive, resulting in an eventual U.S. Food and Drug Adminstration (FDA) approval.
The Celldex stock price has also been on a tear over the last year since we first covered it. At that time, the stock was selling for around $5 a share. The stock currently trades for over $27.90 a share. We feel if rindopepimut is ultimately approved by the FDA, the stock could easily double from its current price. The reason being that glioblastoma is an unmet need treatment area. However, the stock has come down in price significantly from its recent 52 week high of $38.84, set on October 2nd. Celldex became a bit over speculated at that price range, notwithstanding the recent debt ceiling and United States Government shut down fears. We feel strongly that the stock price can rebound back near the 52 week high by the end of the year, as we believe Congress will reach a "grand bargain" soon, which will allow the stock market to shift to a more "risk on" environment.
Antares Pharma (ATRS) Expects an approval decision from the FDA by next week for its subcutaneous (SC) Otrexup injector. The Otrexup Injector is designed to treat rheumatoid arthritis.
Otrexup employs a proprietary coil-spring power source to rapidly deliver Methotrexate (MTX). Oral MTX if ingested in large quantities can be very toxic to the liver. Antares' goal here is to allow more MTX into a patient's body subcutaneously, by-passing ingestion to allow better potency and safety in higher doses. This acts as a "pre-biologic" solution, which in turn should save insurance companies a considerable amount of money. With potentially better potency and safety with Otrexup, the much more expensive biologic drug doses can be cut down, or eliminated in some cases altogether.
Otrexup, if approved (we believe it will be and set approval chances at over 90%) will be Antares' first proprietary product to receive FDA approval. Antares has several products currently approved by the FDA for which it receives royalties from such companies as Jazz Pharma and Teva Pharmaceuticals (TEVA). Otrexup approval will be a huge step for Antares, and could lead to the company becoming a full-fledged pharma within the next 5 years or less. Antares has several other proprietary products in development, the most notable being Vibex Quick Shot Testosterone (Vibex-QST).
Vibex-QST is designed to offer a once-a-week subcanteous injection solution for those suffering from Low Testosterone (Low-T.) Antares is seeking to prove in clinical trials that Vibex-QST will offer better efficacy and cost effectiveness in comparison to Low-T gel solutions, which are applied on a daily basis. If Antares is successful with Vibex-QST, this product can be a monetary "blockbuster" for the company within five years.
Opko Health (OPK), is expecting to announce top-line results from its Phase III trial for rolapitant, a potentially best-in-class supportive care product for chemotherapy induced nausea and vomiting. Opko's partnership with Tesaro on this product includes an equity position in the company, potential milestone payments up to $121 million, double digit tiered royalties on sales, as well as profits in some other areas of the world if the drug is successfully commercialized.
This global trial program is being conducted at more than 200 sites across 25 countries and includes approximately 2,400 cancer patients. Rolapitant will be evaluated along with the standard of care against a placebo/standard of care combination.
In this Phase III trial, the patients and the company hope to see an improvement in control of nausea and vomiting during the acute (0-24 hours), delayed (24-120 hours) and overall (0-120 hours) time periods post administration of chemotherapy. Additional outcome measures include complete response for other time points, the incidence and severity of nausea, and safety and tolerability. Opko believes this drug will be successful as a longer acting treatment over the course of five days versus comparable drugs which generally last 1-2 days. It also believes the drug will be effective in a more rapid manner once taken compared to the competition.
If this would become the standard of care as the potential indicates, the market opportunity identified by Opko is approximately 1.25 billion. The company expects a high 70% penetration rate because the only drug currently on the market designed as a NK-1 receptor antagonist is Emend from Merck (MRK). U.S. exclusivity is expected through 2028 as well which gives the company a strong asset if eventually approved by the FDA.
Generally, Opko Health makes news because of insider buying from its CEO, Phillip Frost. He now holds a huge stake in the company, approximately 152,000,000 shares. With Dr. Frost continuing to make purchases, it will be interesting to see how his fortune fluctuates over time. Over the past year, he has seen a nice upswing in his investment as the stock has moved from the mid-$4 range to about $10/share. But, this doesn't deter him from continuing to buy at these levels.
Isis Pharmaceuticals (ISIS) has a data release due this quarter for ISIS-FXIRX, which is in a Phase II study for blood clots related to knee replacements. We think this can be important for the company moving forward because of how common joint replacements are these days with an aging baby boomer generation. The surgery portion has become much smoother, but keeping bleeding and blood clot risks out of the equation have remained a challenge.
ISIS-FXIRX is designed to primarily treat clotting disorders, as it targets Factor XI, a clotting factor produced in the liver that is an important component of the coagulation pathway. Although currently available anticoagulants reduce the risk of clotting that can lead to heart attacks and strokes, physicians associate these anticoagulants with increased bleeding, which can be fatal.
The Phase II study is a global, multi-center, open-label, comparator-controlled study in up to 400 patients who are undergoing knee replacements. The study will compare ISIS-FXIRx safety and activity to enoxaparin, a commonly used anti-coagulant. In a Phase 1 study in healthy volunteers, ISIS-FXIRx produced robust dose-dependent, statistically significant reduction of greater than 80 percent in Factor XI activity with no bleeding events observed.
Isis will be busy considering they also have four other data releases related to Phase II studies coming up after ISIS-FXIRx. Considering the incredibly deep pipeline of advanced drugs the company has, it is easy to see why the stock has sparked a lot of interest in the investing community -- since the beginning of 2013, the stock price has tripled.
Disclosure: I am long HALO, ATRS
Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.