Biotech Stock Roundup: Alexion to Buy Synageva, FDA Panel Backs …

Mergers & acquisitions once again took center stage in the biotech sector with Alexion (ALXN – Analyst Report) announcing its intention to acquire Synageva (GEVA – Snapshot Report). Meanwhile, there were some important updates on the regulatory and pipeline front from companies like Vertex (VRTX – Analyst Report) and Orexigen (OREX – Analyst Report).

Recap of the Week’s Most Important Stories

1. One of the biggest news over the last five trading days was Alexion’s announcement that it will be acquiring Synageva in a deal worth $8.4 billion. The key factors driving the deal include expansion of Alexion’s metabolic franchise through the addition of Kanuma (under priority review for LAL Deficiency with decisions expected in the second half of 2015), earnings accretive in 2018, strengthening of the company’s rare disease pipeline with combined pipeline expected to have 8 candidates targeting 11 indications and revenue acceleration and diversification.

Alexion is also looking to achieve annual cost synergies from 2015 which are expected to touch at least $150 million in 2017. However, Alexion’s shares declined immediately after the deal was announced on concerns regarding the hefty price tag (Read more: Alexion to Buy Synageva for $8.4B: Alexion Down, Synageva Up).

2. Orexigen and partner Takeda announced that they will be terminating their cardiovascular (CV) outcomes trial – the Light Study – based on the recommendation of the Executive Steering Committee (ESC). The early termination of the study is not based on any safety concerns or any findings of superiority. The study compared obesity drug Contrave to placebo in overweight and obese patients with certain CV risk factors. In Mar 2015, Orexigen had revealed interim data from the study as part of a patent and securities filing.

While the data was encouraging and sent the company’s shares soaring, concerns surfaced about the revelation of this data as it was not supposed to be made public. Meanwhile, data obtained after 50% completion of the study showed inconsistency of effects on CV outcomes between the first 25% and second 25% of the Light study.

55 CV events occurred in the Contrave arm compared to 43 in the placebo group in the second 25% of the study. This is in contrast to the first 25% interim analysis which showed a higher occurrence of CV events in the placebo arm compared to Contrave (59 versus 35). Data will be presented at a scientific meeting.

Meanwhile, a new CV outcomes study will be conducted as a post-marketing requirement (PMR). The study is expected to commence later this year with completion expected in 2022.

Orexigen also provided an update regarding its partnership with Takeda. Takeda has initiated a formal dispute process claiming material breach. Among other things, Takeda wants Orexigen to pay the entire cost of the new CV outcomes trial. Orexigen’s shares were down 13.6% on these developments.

3. Vertex received some good news with the FDA’s advisory panel voting in favor (12-1) of approving the company’s experimental cystic fibrosis treatment, Orkambi. With the FDA panel in favor of approving the combination treatment, chances of gaining FDA approval look high. A decision should be out by Jul 5. Approval would allow the company to target a huge patient population – it is estimated that there are roughly 8,500 patients (12 years old and above) in the U.S. who have two copies of the F508del mutation in the CFTR gene – the indication for which approval is being sought.

4. Gilead (GILD – Analyst Report) acquired privately-held Danish company EpiTherapeutics ApS for $65 million. With this acquisition, Gilead will have access to EpiTherapeutics’ library of first-in-class, selective small molecule inhibitors of epigenetic regulation of gene transcription, in particular histone demethylases.

5. NewLink’s (NLNK – Snapshot Report) shares fell 29.9% on news that the company’s phase III IMPRESS study on algenpantucel-L will continue without any modification or sample size adjustment. The study is being conducted in patients with surgically resected pancreatic cancer. The announcement regarding study continuation was made after a second planned interim data analysis.

Performance

Over the last five trading days, Celgene recorded the highest gain (5.62%) among major biotechs. Alexion saw its shares declining 4.43% during this period. Biogen (BIIB – Analyst Report) was the highest gainer (23.14%) over the last six months. Alexion lost 16.84% during this period.

The NASDAQ Biotechnology Index gained 3.96% over the last five trading days (See the last biotech stock roundup here: Weakness in Biotech Sector on Amgen & Celladon News).

Company
Last Week
Last 6 Months
AMGN
-0.75%
-1.76%
BIIB
2.46%
23.14%
GILD
3.22%
-1.25%
CELG
5.62%
4.92%
REGN
2.99%
19.52%
ALXN
-4.43%
-16.84%
VRTX
1.58%
6.34%

What’s Next in the Biotech World?

With first quarter earnings season coming to an end, watch out for the usual pipeline updates and data presentations from biotech companies.

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Biotech Stock Roundup: Alexion to Buy Synageva, FDA Panel Backs …