With the SPDR S&P Biotech Index up 45% 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.
Mixed decisions from the FDA
It may have been a holiday-shortened weekend, but that doesn't mean the Food and Drug Administration took the week off. One biotech was lucky enough to receive an early approval while another received its third strike.
The smiles this week belonged to shareholders of Spectrum Pharmaceuticals (NASDAQ: SPPI ) which on Thursday received an early approval for Beleodaq, a treatment for relapsed or refractory peripheral T-cell lymphoma (PTCL), a rare but aggressive form of non-Hodgkin's lymphoma that will be diagnosed in close to 71,000 Americans this year according to the National Cancer Institute.
Originally Spectrum's PDUFA decision date was Aug. 9; however, the FDA chose to approve the drug early under its accelerated approval program after tumor shrinkage or elimination was observed in 26% of patients. In phase 2 studies Beleodaq was even proved effective in patients with low platelet counts, resulting in few incidences of myelosuppresion. Spectrum will still need to run additional confirmatory studies under the guidelines of its accelerated approval. Keep in mind that Spectrum already has Folotyn approved as a PTCL treatment so Beleodaq isn't likely going to knock Wall Street's socks off with its sales potential, but this approval is nonetheless another step toward the company potentially turning the corner to profitability by late 2015 or early 2016 if its product launch is successful.
On the flipside, takeover target Allergan (NYSE: AGN ) proved that the third time is not always the charm. Following an approval rejection when it was under development by MAP Pharmaceuticals (which Allergan purchased), as well as two separate rejections while owned by Allergan, Semprana (previously known as Levadex) received yet another complete response letter. Once again, efficacy wasn't the issue for the inhaled migraine medication. Instead, the agency focused on concerns with the delivery device. Allergan notes that it anticipates responding to the FDA's requests soon with a fourth decision due by the second quarter of 2015. For now Allergan's nearly $1 billion purchase of MAP is looking like a total bust.
However, in a token stroke of good luck Allergan also received an expanded indications approval for Ozurdex, its sustained-release biodegradable steroid implant, as a treatment for diabetic macular edema in patients with an artificial lens implant or who have an upcoming cataract surgery.
Putting on a clinic
The short week also featured three clinical updates, all of which appeared to bear good news for existing shareholders.
On Tuesday, Salix Pharmaceuticals (NASDAQ: SLXP ) announced that Xifaxan had met its primary endpoint of inducing a statistically significant response in patients with irritable bowel syndrome with diarrhea, or IBS-D. In the TARGET 3 trial Xifaxan was administered three time daily for 14 days. Patients were then observed during the treatment-free follow-up period with the results demonstrating that the Xifaxan arm reduced abdominal pain and improved stool consistency relative to the placebo. Not surprisingly, considering that Xifaxan is already an FDA-approved drug, it was also found to be both safe and well-tolerated. Salix anticipates that its TARGET 1 through TARGET 3 trials should provide enough safety and efficacy data for the company to file a supplemental new drug application soon.
My personal favorite story this week came from clinical-stage immunotherapy vaccine developer Agenus (NASDAQ: AGEN ) , which on Tuesday reported the final median overall survival results from its phase 2 study involving its Prophage autologous vaccine for patients with newly diagnosed glioblastoma multiforme, the most aggressive form of brain cancer. According to its results, median overall survival for the Prophage-treated group was 24 months, nearly double that of the current standard course of treatment, which includes radiation and Temodar. Furthermore, 22% of patients were alive and without any signs of progression at the 24-month mark. Glioblastoma multiforme is an incredibly difficult form of cancer to treat, but Agenus' midstage results look incredibly promising from the perspective of overall survival. This is a company you need to have on your watchlist following this data release as far as I'm concerned.
Lastly, Zogenix (NASDAQ: ZGNX ) didn't specifically report any clinical data, however it did update its progress in developing abuse-resistant forms of its chronic pain medication Zohydro ER which sent its shares up by 14% for the week. Investors have been concerned with the abuse potential of Zohydro ER and worry that it'll sell poorly until a more abuse-resistant version is introduced.
Zogenix announced on Wednesday that it's in the process of developing two supplemental versions of Zohydro ER. The first is a reformulated capsule that should cut down on abuse by injection and nasal administration. Zogenix anticipates filing a supplemental new drug application for this formulation by October with the chance of it hitting pharmacy shelves early in 2015. Zogenix, in collaboration with Altus Formulation, is also developing a tablet version of Zohydro ER. It's aiming to file an sNDA for the tablet formulation by the first half of 2016. If both formulations are approved and successfully launched it's possible that Zogenix could be a profitable company by as soon as fiscal 2016.
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