As we saw in the first part of "This Week in Biotech," it was an extremely busy week in the health-care sector. In the first part of our regular biotech review, we noted five companies directly affected by regulatory actions, either from the Food and Drug Administration itself, or from one of its advisory panels.
Now, in the second installment of "This Week in Biotech," we're going to look at five clinical results that made waves -- both good and bad -- within the biotech sector, as well as look at the biotech buyout that's been the buzz of Wall Street for days.
One hefty premium
Perhaps the biggest surprise of the week was the Monday announcement that Merck planned to buy the struggling, wholly clinical hepatitis C-focused Idenix Pharmaceuticals (NASDAQ: IDIX ) for an incredible $24.50 per share, or $3.85 billion. This represents a 239% premium to where the company closed last Friday and gives Merck access to Idenix's three clinical compounds, of which two are in midstage studies.
Ultimately, the deal could net some form of royalty or upfront payment for Merck given that Idenix is currently battling Gilead Sciences over a particular patent that Idenix alleges Gilead infringed upon. If Idenix proves victorious in court, it could create quite the royalty stream for Merck. In addition, Merck may want try its luck by combining Idenix's prized investigational therapy, samatasvir, with its own duo of hepatitis C drugs.
As for me, I believe this has the potential to go down as one of the biggest busts of all time. Idenix has had four drugs placed on clinical hold (three of which were discontinued) just since 2010 and has failed time and again to move any of its therapies past phase 2 trials. Even if Merck wanted Idenix, I see no reason it couldn't have gotten the company for literally billions less. Only time will tell if I'm proven right, but based on the data as of right now, I'd call the chances that this deal will blow up in Merck's face better than 50-50.
Putting on a clinic
The remaining five companies we're going to look at all gave investors quite the stir this week with clinical updates.
Northwest Biotherapeutics (NASDAQ: NWBO ) impressed even critics this week when it announced additional data from its phase 1/2 study involving DCVax-Direct as a treatment for inoperable solid tumors. According to its press release all nine patients who've received the fourth of six planned DCVax-Direct injections have experienced some degree of clinical benefit, including tumor cell death and/or tumor shrinkage, immune cell accumulation, or disease stabilization. Through the first 20 patients that have received at least three injections 13 have exhibited some clinical benefit. Of course, it's probably best to wait for the full data set to come in before getting too excited, but this is clearly a reason to have NW Bio on your watchlist.
While NW Bio's data may have stolen the scene this week, it was Karyopharm Therapeutics' (NASDAQ: KPTI ) Friday rally which truly stunned investors. Karyopharm shares nearly doubled to end the week after announcing data from its phase 1 study which combines selinexor with a low dose of dexamethasone. Per its results, 50% of evaluable patients has an overall response, with 75% of patients demonstrating a clinical benefit. Why investors found this data really exciting is that these robust response rates came after the average patient had previously received 5.5 different therapies. Similar to NW Bio this is a great early stage news event, but the data pool is probably a bit too small to start uncorking the champagne bottles.
Also putting on one heck of a "clinic" was development-stage biopharma Receptos (NASDAQ: RCPT ) which gained a whopping 54% this week after it reported positive phase 2 results for its investigational relapsing multiple sclerosis drug RPC1063. Based on its phase 2 RADIANCE trial, RPC1063 met its primary endpoint of a statistically significant reduction in gadolinium-enhancing lesions, with both the 0.5 mg and 1 mg doses reducing these lesions by 86%. In addition, RPC1063 was deemed safe and tolerable during the study. While this is certainly great news for shareholders, we're also staring down a company approaching a $900 million valuation that only has two investigational drugs in its pipeline and is wholly clinical. To me the risks appear to outweigh the potential rewards, at least at this lofty valuation.
Another late week surprise was TG Therapeutics (NASDAQ: TGTX ) , yet another wholly clinical-stage company, which reported positive preliminary results from a phase 2 study examining the combo of TG-1101 and Pharmacyclics' Imbruvica as a possible therapy for previously treated chronic lymphocytic leukemia and mantle cell lymphoma patients. Although evaluable patient pool was small, the overall response rate of 90% certainly caught Wall Street and investors off guard. Not to mention, the combo was deemed safe and tolerable with only one grade 3/4 adverse event noted in the initial 28 patient study. These results demonstrate that Imbruvica could make quite the blood cancer combo drug for years to come, and that TG-1101 plus Imbruvica could be one of its many successful drug combos to make it to market. As per the norm, I'd like to wait for a larger evaluable patient pool than 10 before getting in an uproar, but this news nonetheless merited an upward move in TG's share price.
Finally -- and keeping with our theme of wholly clinical companies making news this past week -- on Friday OncoMed Pharmaceuticals (NASDAQ: OMED ) announced that it was voluntarily putting a hold on its phase 1 studies involving vanticitumab and Fzd8-Fc because eight of 63 patients in its vantictumab study and two of 41 in its Fzd8-Fc study had developed mild-to-moderate bone-related adverse events. OncoMed informed the Food and Drug Administration of its decision and plans to adjust its protocol accordingly to restart the studies, including a lower and less-frequent dose, updating measures to curb bone-related adverse events, and amending its enrollment criteria. However, the FDA also gave OncoMed the OK to continue dosing one individual patient in the vantictumab and Fzd8-Fc studies because they've had more than 700 days and more than 390 days of progression-free, adverse-free survival, respectively. With a number of key collaborations I believe any major drop in OncoMed could represent an intriguing buying opportunity.
Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier, and more accurately, than anyone else. There is a product in development that will revolutionize not how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. To outsmart Wall Street and realize multibagger returns, see The Motley Fool's new free report on the dream team responsible for this game-changing blockbuster. Click here now.