With the SPDR S&P Biotech Index up 15% over the trailing-12-month period, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.
The buddy system
Although we saw no megamergers this past week, there was one deal that caught the attention of investors and sent one mid-cap biotech stock screaming higher.
On Wednesday morning clinical-stage biopharmaceutical company Celldex Therapeutics (NASDAQ:CLDX) announced a clinical trial collaboration with Bristol-Myers Squibb that'll combine Celldex's investigational CD27-targeting antibody known as varlilumab with Bristol's prized experimental anti-PD-1 immunotherapy nivolumab. These phase 1/2 studies will be targeted at a number of solid tumor types, including non-small cell lung cancer and colorectal cancer, and should begin by the fourth quarter of this year. Under the terms of the deal Celldex will receive a one-time $5 million upfront payment, and it could garner an experienced marketing partner if these combo trials prove successful. Investors, of course, should keep in mind that Celldex is already carrying around a $1.2 billion valuation despite no recurring cash flow, so much of this recent optimism appears to be baked into its share price already.
All holds barred
The big news of the week might appear to be Halozyme Therapeutics' (NASDAQ:HALO) first-quarter report after the bell on Monday, but it was a simple paragraph buried within that report that stirred investors' enthusiasm. As noted by Dr. Helen Torley, the President and CEO of Halozyme,
In early April, we temporarily halted dosing of PEGPH20 in Study 202 so the Data Monitoring Committee (DMC) could evaluate a possible imbalance in the rate of thromboembolic events between the drug arm and the control arm in the trial. We have since provided the DMC with requested information including an amended study protocol, and the DMC has informed us that they now support continued enrollment of patients and dosing of PEGPH20 in the trial with the proposed study modifications.
In other words, the hold on PEGPH20, which really shouldn't have been a huge factor in Halozyme's valuation back in April, but which nonetheless rocked its share price, has been removed and Halozyme is free to study this pancreatic cancer-focused therapy in a phase 2a trial. Following the approval of MabThera SC in Europe and its positive results from the CONSISTENT-1 trial, I'd suggest Halozyme could have some decent upside for patient long-term investors.
Isis' incredible results
Despite flying largely under the radar, Isis Pharmaceuticals (NASDAQ:IONS) phase 2 results on ISIS-GCGR, an experimental type 2 diabetes drug, this past Wednesday were simply phenomenal.
According to its results, ISIS-GCGR achieved absolute mean hemoglobin A1c (HbA1c) reductions of two percentage points in type 2 diabetes patients from baseline in just 13 weeks. In addition, ISIS-GCGR was associated with an increase in GLP-1 levels which would be expected to enhance insulin secretion in the pancreas, and help to preserve pancreatic function in order to restore glycemic balance. Recent clinical studies from competitors have yielded HbA1c reductions in the 0.5%-1% range, so its greater than 1% reduction witnessed in the 100 mg and 200 mg cohorts is incredibly encouraging and speaks to the potential of Isis' in-house development drug development platform. Do yourself a favor and keep a close eye on this diabetes therapy and Isis moving forward.
Shares of Northwest Biotherapeutics (NASDAQ:NWBO) were whipsawed to end the week with the company on Thursday morning announcing positive results from its first revealed case study featuring its cancer immunotherapy DCVax-Direct on a patient with sarcoma.
According to its press release, this patient in question received three DCVax-Direct injections which demonstrated a partial collapse of the injected tumor via an MRI scan, as well as the potentially early signs of tumor shrinkage in a non-injected metastatic growth in the patients' lungs via CT scan. As I pointed out on Thursday, we should still keep in mind that this is very early data, and it's also handpicked data by NW Bio in that we haven't been told how any other patients are performing, so keep that bias in mind as you assess the performance of DCVax-Direct. However, with the American Society of Clinical Oncology conference set to kick off in less than two weeks we're likely to know a bit more then which could make valuing the company a bit easier.
Finally, and this should really come as no surprise to those who've been following the development of Novartis' (NYSE:NVS) experimental acute heart failure drug RLX030 (also known as serelaxin), the Food and Drug Administration on Friday officially gave its thumbs-down to serelaxin and sent Novartis a complete response letter. Again, not a huge shock given that in May the FDA's advisory panel voted unanimously against recommending the prospective therapy for approval.
RLX030 is an interesting case as it's also a breakthrough therapy designated drug, and as Novartis notes, it plans to continue development of the drug. Novartis' plans include enrolling more than 6,300 patients in its RELAX-AHF-2 trial which it anticipates will add to the encouraging results from its original trial and appease the FDA into an eventual approval. Given the prevalence of acute heart failure cases in the U.S. and throughout the world, if approved RLX030 could have annual peak sales potential of $1 billion or greater, so it's certainly a therapy Novartis doesn't want to easily give up on. For now this isn't a huge surprise for Novartis shareholders, but they'll want to keep their eyes peeled on this large trials' development.
We saw some big gains this week, but even these companies could struggle to keep pace with this top stock over the long run
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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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