Today’s Top Health Care Stories: Novavax, Merck, and Bristol-Myers Squibb

Novavax, Merck, and Bristol-Myers Squibb could make waves across the health care sector this morning. Here’s why.

Apr 29, 2014 at 9:15AM


Let's take a quick look at three stocks which could loom large in health care headlines this Tuesday morning -- Novavax (NASDAQ:NVAX), Merck (NYSE:MRK), and Bristol-Myers Squibb (NYSE:BMY).

Novavax shows positive top-line data for its RSV-F vaccine candidate
Novavax, a clinical-stage biotech specializing in novel vaccines and adjuvants, just announced positive top-line data from its RSV-F protein nanoparticle vaccine candidate for RSV (respiratory syncytial virus). RSV is a respiratory pathogen which is a common cause of childhood respiratory infection, which causes 160,000 deaths annually. Novavax's vaccine candidates for RSV and seasonal influenza -- both in phase 2 trials -- are its most advanced products.

The top-line data revealed that the vaccine candidate was well-tolerated with no serious adverse events, and the highest immune responses were observed with a single dose of vaccine combined with an aluminum phosphate adjuvant.

The company intends to select a vaccine formulation and regimen for a potential phase 2 trial on pregnant women, which is planned for the fourth quarter of 2014. Shares of Novavax are up 58% over the past 12 months.

Merck reports first quarter earnings, sale of consumer health business likely
Meanwhile, Merck reported quarterly earnings that topped analyst estimates, thanks to cost cutting and asset sales, although its revenue came in below expectations. Shares of Merck are up slightly in pre-market trading after the announcement.

For its first quarter, Merck's earned $1.7 billion, or $0.57 per share, up from $1.59 billion, or $0.52 per share, in the prior year quarter. Excluding special items, Merck earned $0.88 per share, topping the Thomson Reuters consensus estimate of $0.79. Global revenue, however, fell 4% to $10.26 billion, missing Wall Street's expectation of $10.44 million.

That slide can be primarily attributed to generic competition, including for Merck's asthma drug Singulair, which lost patent protection in 2012. Sales of Singulair fell 20% year-over-year to $271 million. At its peak, Singulair generated more than $5 billion in annual sales.

In other Merck-related news, Reckitt Benckiser confirmed yesterday that it was in discussions to buy Merck's consumer health business, which generated sales of $546 million (a 4% YOY decline) during the first quarter. Bayer and Procter & Gamble are also reportedly interested in acquiring the unit, which analysts believe could fetch $13.5 billion to $14 billion.

Bristol-Myers Squibb acquires iPierian
Last but not least, Bristol-Myers Squibb just acquired iPierian, a privately held biotech company specializing in new treatments for Tauopathies, a class of neurodegenerative diseases associated with the Tau protein in the brain. When the Tau protein forms abnormal deposits in the brain, it can disrupt brain cell activity and lead to diseases.

The acquisition gives Bristol-Myers full rights to iPierian's lead drug candidate IPN007, a preclinical monoclonal antibody which is being studied to treat progressive supranuclear palsy (PSP) and other Tauopathies. Phase 1 clinical trials could start on IPN007 by early 2015.

Bristol-Myers acquired iPierian for an all cash transaction of $175 million, with the potential for additional milestone payments totalling $550 million, including future royalties on net sales if approved. Bristol-Myers is expected to report the $175 million during the second quarter of 2014.

Bristol-Myers Squibb's executive vice president and chief scientific officer Francis Cuss called the acquisition a part of the company's evolution to a "diversified specialty BioPharma company" which can treat patients with genetically defined diseases, such as Tauopathies, who have limited treatment options.  

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