The Biggest Biotech Wins of the Week

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The iShares Nasdaq Biotechnology Index finally put up some gains last week as some big names released great news. It looks like GlaxoSmithKline (NYSE: GSK  ) might have an oral psoriasis candidate. Hemophilia giant Baxter (NYSE: BAX  ) might be adding another therapy to its successful franchise. The biggest win of the week, however, goes to Intercept Pharmaceuticals (NASDAQ: ICPT  ) . The clinical stage biotech fed another morsel to the hungry optimists holding up its industry leading gains.

Try, try again
To top off a whirlwind week of great news, GlaxoSmithKline finally hit a primary endpoint with JAK1 inhibitor GSK2586184. Preliminary data from a mid-stage study showed a significant number of chronic plaque psoriasis patients receiving the therapy achieved a 75% improvement from baseline.

Glaxo licensed the candidate from Belgian clinical stage biotech Galapagos just over two years ago. The partnership had grown a bit tense after the immuno-modulator hit a wall in previous studies. Glaxo stopped a phase 2 lupus trial at the first interim analysis due to lack of effect. It also put an exploratory phase 1-2 ulcerative colitis trial on hold.

As a small molecule drug, orally delivered JAK inhibitors have a strong advantage over currently successful antibodies. Unfortunately Glaxo is hardly a first mover in this class. Pfizer's (NYSE: PFE  ) JAK inhibitor Xeljanz is in the middle of two pivotal studies for plaque psoriasis. Pfizer expects to report top-line results from those studies later this quarter.

Another drug in the franchise
It looks like Baxter will soon add another bleeding disorder drug to its industry leading hemophilia franchise. In a late-stage trial, recombinant von Willebrand factor BAX 111 smashed through its primary endpoint. The replacement therapy successfully treated bleeding episodes in all 22 patients.

Von Willebrand disease is the most commonly inherited bleeding disorder. It's characterized by an insufficient level of the clotting factor that bears its name. About 1% of the population has the disease, but only about one in 10,000 people show symptoms serious enough to require treatment.

Baxter intends to file an application with the FDA for on-demand treatment with BAX 111 before the end of the year. A study of the recombinant factor as a prophylactic treatment should also begin some time this year.

Effective and fast
The biggest winner from last week is easily Intercept Pharmaceuticals. Last month the company announced preliminary results from a late stage study with its bile acid analog. Obeticholic acid (OCA) reached its primary endpoint of significantly reducing serum alkaline phosphatase -- a symptom of liver damage -- in patients with primary biliary cirrhosis. Last weekend the company released further details showing some patients displaying a positive impact from the drug after just two weeks of treatment, with peak effectiveness at 6 months.

Primary biliary cirrhosis (PBC) is a life threatening disease that primarily affects about 0.1% of women over 40. Currently ursodiol is the only approved treatment, but it's not terribly effective. Roughly half of PBC patients fail to respond adequately to ursodiol, leaving a large population with unmet need.

The opportunity wasn't lost on investors when the first hints of the OCA's efficacy sent the stock rocketing upwards. Like most clinical stage biotechs, it has given up a great deal in the past few weeks, despite the encouraging results.

ICPT Chart

ICPT data by YCharts

Following the above trial, Intercept may have collected enough data to support a new drug application for treatment of primary biliary cirrhosis patients that fail to respond to ursodiol. While the results make an approval seem increasingly likely, there are some important pitfalls to watch out for.

The first stems from cardiovascular events reported during a trial separate from the one above. The events weren't significantly related to the therapy, but any more could send shares plummeting. Also, Intercept believes the FDA will consider an application without long-term outcome data, but nothing is set in stone. If the agency changes its mind, it might take several years longer to bring OCA to the market.

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Cory Renauer

Cory is a long-term minded analyst mainly focused on the biotechnology and pharmaceuticals. He genuinely enjoys cutting through the industry's complexities to help everyday investors make better decisions. You can contact Cory on Twitter @coryrenauer

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9/4/2015 3:03 PM
BAX $36.05 Down -1.01 -2.71%
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