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Biotech Stock Roundup: Biogen Inks Deal to Boost Pipeline, Sangamo Soars on Pfizer Deal

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Biogen BIIB was in the news this week not only for an agreement that will boost its pipeline but also for a favorable decision in a securities litigation. Meanwhile, Sangamo’s SGMO shares skyrocketed on a collaboration with Pfizer.

Recap of the Week’s Most Important Stories

Biogen Boosts Pipeline with Cirara Deal: Biogen has added a late-stage candidate, Cirara, to its pipeline through an asset purchase agreement with privately-held, clinical stage pharma company, Remedy Pharmaceuticals. The deal will see Biogen shelling out $120 million upfront as well as milestone and royalty payments.

Cirara is being evaluated for large hemispheric infarction (LHI), a severe form of ischemic stroke where brain swelling (cerebral edema) often leads to a disproportionately large share of stroke-related morbidity and mortality. Cirara has orphan drug status in the U.S. for severe cerebral edema in patients with acute ischemic stroke. Cirara also has Fast Track designation. Both companies will share the cost of development for the LHI indication.

According to information provided by Biogen, about 1.7 million ischemic strokes occur across the U.S., Europe and Japan every year with approximately 15% of these being LHI strokes.

Biogen is already working on developing treatments in this disease area. Natalizumab is being evaluated in a phase IIb study in patients with acute ischemic stroke (Read more: Biogen Buys Stroke Candidate Cirara for $120M).

Biogen Scores Win in Securities Litigation: Biogen got a favorable ruling in a securities lawsuit related to the company’s oral multiple sclerosis (MS) drug, Tecfidera. The lawsuit included allegations that the company misled the public about the effect of a patient's death on Tecfidera sales. Tecfidera, which was off to a strong start following its launch and a major contributor to the top line, saw sales stumbling once the company announced a progressive multifocal leukoencephalopathy (PML)-related patient death. With the FDA issuing a warning and Tecfidera’s label being updated, the drug’s growth was impacted.

While a district court had dismissed the securities litigation lawsuit, the Court of Appeals for the First Circuit agreed with the district court’s ruling.

Safety Concerns Loom Over Ionis Drug: Ionis IONS presented positive results from a late stage study on inotersen but saw its shares decline on safety concerns. The study, conducted in patients with familial amyloid polyneuropathy (FAP), met both primary endpoints. However, the inotersen arm saw more treatment-emergent adverse events than the placebo arm. Three serious adverse events of thrombocytopenia were observed with two patients recovering and one dying due to intracranial hemorrhage. There were a few patient discontinuations as well (Read more: Ionis Stock Falls Despite Positive Inotersen Data).

Ionis has underperformed the Zacks-categorized Medical-Biomedical/Genetics industry year-to-date with shares declining 6.1% compared to the industry gain of 7.1%.

Sangamo Shoots Up on Pfizer Collaboration: Sangamo’s shares shot up more than 60% on an agreement with Pfizer for the development and commercialization of gene therapy programs for hemophilia A. The exclusive, worldwide collaboration and license agreement covers SB-525, one of Sangamo’s four lead pipeline candidates, which is expected to enter the clinic this quarter with results expected later this year or early next year. The agreement under which Pfizer will pool its expertise in rare disease, gene therapy, and hemophilia with Sangamo’s deep knowledge in genomic therapies will see Sangamo getting an upfront payment of $70 million. Sangamo could get milestone payments of up to $475 million, including up to $300 million related to SB-525 and up to $175 million for additional hemophilia A gene therapy candidates that may be developed under the collaboration. Tiered double-digit royalties on net sales also form a part of the deal.

Earlier this week, Sangamo got fast track status from the FDA for SB-525. As per data from the Centers for Disease Control and Prevention, hemophilia occurs in about one of every 5,000 male births, with about 20,000 males in the U.S. living with the disorder.

Sangamo is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Akebia Jumps on License Agreement: Akebia’s AKBA shares jumped 16.4% following the announcement of an exclusive license agreement to sell vadadustat to Fresenius Medical Care dialysis clinics in the U.S. upon FDA approval. Vifor Pharma will also make a $50 million equity investment in Akebia. Vadadustat is in late-stage development for the treatment of anemia associated with chronic kidney disease (CKD).

Fresenius is the largest kidney dialysis provider in the U.S. and treated more than 185,000 dialysis patients or about 40% of the U.S. dialysis patients in 2016.

Performance

Medical – Biomedical and Genetics Industry 5YR % Return

Medical – Biomedical and Genetics Industry 5YR % Return


The NASDAQ Biotechnology Index was up 0.8% over the last five trading sessions. Among major biotech stocks, Regeneron REGN gained 6.5% while Alexion ALXN lost 3.5% during this period. Over the last six months, Vertex VRTX was up 30.5% while Biogen was down 18.9% (See the last biotech stock roundup here: Regeneron, BioMarin Report Q1, Kite Down on Patient Death).

What's Next in the Biotech World?

Regeneron and partner, Sanofi, expect a decision from the FDA for their experimental rheumatoid arthritis (RA) drug Kevzara (sarilumab) on May 22, 2017. Kevzara’s approval would be a major positive for the companies with the drug representing blockbuster potential.

Puma’s experimental breast cancer treatment, neratinib, will be reviewed by the FDA’s Oncologic Drugs Advisory Committee on May 24.

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