Biotech Stock Roundup: Celgene to Acquire Impact, J.P. Morgan Healthcare Conference in Focus

This week, the focus is on the 36th annual J.P. Morgan healthcare conference where several biotech and pharma companies provided a preliminary look at their results for 2017 and have also provided pipeline updates as well as their outlooks for 2018. Meanwhile, Celgene CELG was in the news with the company announcing its intention to acquire Impact Biomedicines.

Recap of the Week’s Most Important Stories

Celgene to Buy Impact: Celgene has started the year with an acquisition announcement – the company will be acquiring Impact Biomedicines, which is developing fedratinib for myelofibrosis and polycythemia vera. The deal terms include an upfront payment of approximately $1.1 billion and contingent payments of up to $1.25 billion based on the achievement of regulatory approval milestones for myelofibrosis. Celgene could make additional payments based on approvals for label expansion and the achievement of sales-based milestones. Plans are on to submit a new drug application to the FDA in mid-2018. Celgene is looking to boost its pipeline with this acquisition. The company had a rough 2017 with shares declining 12.1% over the last one year. Issues like pipeline setbacks as well as the weak performance of Otezla have been weighing on the stock (Read more: Celgene to Acquire Impact Biomedicines to Boost Pipeline).

Key Takeaways from J.P. Morgan Healthcare Conference: Several biotech companies were present at the 36th annual J.P. Morgan healthcare conference. Most of these companies provided a preliminary look at fourth quarter results and their outlook for 2018. Among key updates, Acorda ACOR could start facing generic competition for its flagship drug, Ampyra, any time after Jul 30, 2018. The company is currently seeking FDA approval for Inbrija for which a response could be out in February (Read more: Acorda's Shares Down on Disappointing Ampyra View for 2018). Vertex VRTX, which holds a strong position in the cystic fibrosis (“CF”) market, is looking to strengthen its position further with the potential approval of tezacaftor/ivacaftor in the United States – a decision from the FDA is expected on Feb 28, 2018. Vertex could also be one of the companies that will pursue acquisition deals this year. Celgene also provided its preliminary results and 2018 outlook (Read more: Celgene Provides 2017 Preliminary Results & 2018 View). Vertex is a Zacks Rank #1 (Strong Buy) stock - you can see the complete list of today’s Zacks #1 Rank stocks here.

Axovant Plunges on Intepirdine Discontinuation: Axovant Sciences’s AXON shares lost more than 50% of their value with the company announcing disappointing results on its lead pipeline candidate intepirdine. The candidate failed to meet the primary efficacy endpoints in studies that were conducted in patients with dementia with Lewy bodies (“DLB”) and patients with dementia and gait impairment. Based on this, Axovant has decided to discontinue the development of intepirdine.

This is not the first time that Axovant has faced a setback in its development efforts for intepirdine. Last year in September, the company had said that intepirdine failed to meet its co-primary efficacy endpoints in a late-stage study being conducted in mild to moderate Alzheimer's disease ("AD") patients who were receiving background donepezil therapy. At that time too, the company’s shares had plunged significantly (73.9%). Axovant’s shares are down 81.7% over the last one year compared to the 3.3% decline recorded by the industry it belongs to.

Regeneron & Sanofi Boost R&D Investment in Dupixent and Cemiplimab: Regeneron Pharmaceuticals REGN and partner Sanofi have decided to boost their investment in the development of cemiplimab (a PD-1 antibody) in oncology and Dupixent (an IL-4/IL-13 pathway-blocking antibody) in type 2 allergic diseases. Based on this decision, investment in cemiplimab will shoot up to at least $1.64 billion, an increase of approximately $1 billion from the initial agreement, with both companies contributing equally. Cemiplimab is being studied as monotherapy as well as in combination with other therapies in a wide range of cancers including advanced skin cancers, non-small cell lung cancer, cervical cancer and lymphomas. Regulatory applications for cemiplimab in advanced cutaneous squamous cell carcinoma are scheduled to be submitted in the European Union and the United States in the first quarter of 2018.  

Meanwhile, Dupixent, currently approved for eczema, has the potential to be evaluated for additional indications including chronic obstructive pulmonary disease, peanut allergy and grass allergy and in patients who have multiple allergic conditions. This is in addition to ongoing development in pediatric atopic dermatitis, pediatric asthma, eosinophilic esophagitis and nasal polyposis. Regeneron and Sanofi are currently seeking FDA approval for Dupixent in uncontrolled, persistent asthma in patients at least 12 years old.

Another candidate that should benefit from the additional investment is REGN3500, an IL-33 antibody, with potential indications including atopic dermatitis, asthma and chronic obstructive pulmonary disease.

AbbVie Eczema Drug Gets BTD: AbbVie’s ABBV investigational, once-daily oral JAK1-selective inhibitor, upadacitinib, has been granted Breakthrough Therapy Designation (“BTD”) by the FDA for use in adult patients with moderate to severe atopic dermatitis who are candidates for systemic therapy.

Breakthrough Therapy Designation helps fasten the development and review of drugs which are being evaluated for the treatment of serious conditions and where preliminary clinical evidence indicates that the drug may be substantially better than existing treatments on clinically significant endpoint(s). Upadacitinib is scheduled to move into a late-stage program for atopic dermatitis in the first half of the year (Read more: AbbVie's Upadacitinib Gains Breakthrough Therapy Designation).

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The NASDAQ Biotechnology Index declined 0.3% over the last four trading sessions. Among major biotech stocks, Regeneron declined 6.4% while Gilead GILD gained 4.6%. Over the last six months, Biogen was up 22.9% while Regeneron lost 26.3% (See the last biotech stock roundup here: GWPH Submits Epidiolex in the EU, Sangamo Inks Deal with Pfizer).

What's Next in the Biotech World?

Watch out for the usual regulatory and pipeline updates as well as preliminary result announcements and 2018 outlooks ahead of the release of fourth quarter results.

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