Let's take a look at four stocks -- Takeda (NASDAQOTH:TKPYY), Eli Lilly (NYSE:LLY), Immunomedics (NASDAQ:IMMU), and Pharmacyclics (UNKNOWN:PCYC.DL) -- which could make waves in the health care sector this morning.
Takeda and Eli Lilly ordered to pay $9 billion for Actos cancer risks
Takeda Pharmaceutical and Eli Lilly have just been ordered to pay a combined $9 billion in punitive damages, after a Louisiana court ruled that the companies intentionally hid the cancer risks of their diabetes drug, Actos. Takeda, the largest pharmaceutical company in Japan, was ordered to pay $6 billion, while Lilly was ordered to pay $3 billion.
This is not the first time Actos has run into legal problems in the U.S. Last year, juries in California and Maryland ordered Takeda to pay $8.2 million in damages to former Actos users, but both state judges eventually threw out the verdicts. Meanwhile, jurors in a Las Vegas trial rejected patient claims that Takeda failed to warn consumers about the risks of Actos.
Actos sales peaked in the fiscal year ending in March 2011 with $4.5 billion in annual sales. At the time, the drug accounted for 27% of Takeda's revenue. The drug has since gone off patent and faces generic competition from Ranbaxy Laboratories and other drugmakers.
Takeda and Lilly intend to appeal the ruling, but the $9 billion payment comes at a very bad time for both companies. Takeda's earnings have been weighed down by generic Actos, while Eli Lilly faces a daunting patent cliff with the loss of exclusivity for blockbuster drugs like Cymbalta, Evista, and Humalog. Those three drugs generated combined sales of $8.7 billion for Lilly in fiscal 2013.
Immunomedics reports positive data for its two ADCs
Meanwhile, Immunomedics may be in for a good morning after reporting results from preclinical studies of the company's two investigational SN-38-containing antibody drug conjugates (ADCs), IMMU-130 and IMMU-132. ADCs, commonly referred to as "cancer smart bombs," are monoclonal antibodies loaded with cytotoxins which seek and destroy cancer cells.
Immunomedics noted that both ADCs demonstrated a high therapeutic index during the studies. IMMU-130 is currently in a phase 2 trial for late-stage colorectal cancer. IMMU-132 is being valuated in a wider variety of cancers, including breast and lung cancers. Both drugs contain a cytotoxin, SN-38, linked to two different kinds of humanized monoclonal antibodies.
Doses of IMMU-130 and IMMU-132 below the maximum tolerated dose for mice were found to be effective in treating a variety of human solid cancers in animal models. Immunomedics stated that IMMU-132 compared favorably to irinotecan, a colon cancer drug.
Immunomedics does not have any approved products, and I'd like to remind everyone that these results were from preclinical studies in animals and don't necessarily indicate how the drug will behave in humans.
Pharmacyclics files a new sNDA for Imbruvica
Last but not least, Pharmacyclics just announced the submission of a supplemental New Drug Application (sNDA) to the FDA for Imbruvica. The sNDA was submitted based on data from a head-to-head phase 3 study of Imbruvica against ofatumumab (GlaxoSmithKline's Arzerra) for the treatment of patients with CLL or small lymphocytic lymphoma (SLL) who had received at least one prior therapy.
Interim data from RESONATE, released in January, revealed that patients treated with Imbruvica demonstrated a statistically significant improvement in progression free survival, the primary endpoint of the study. Patients in the Imbruvica arm also showed statistically significant improvement in overall survival rates, the key secondary endpoint of the trial. More data will be presented at the 50th annual meeting of the American Society of Clinical Oncology in Chicago, from May 30 to June 3, 2014.
Imbruvica was approved for mantle cell lymphoma (MCL) last November, and subsequently approved to treat CLL in February. Both indications were approved with accelerated approval from the FDA. Pharmacyclics is co-marketing Imbruvica with Johnson & Johnson (NYSE:JNJ), and expectations are high -- analysts expect the drug to generate peak sales between $6 billion and $9 billion. Imbruvica is Pharmacyclics' first approved product.