0

Inovio Pharmaceuticals Posts Positive Phase 2 Cervical Dysplasia Data, Platform Now Validated

If you have been following me since September 9, 2013 when I first posted an article about the partnership with Inovio Pharmaceuticals (INO) and Roche (RHHBY) seen here ” Inovio Inks Deal With Roche, The Sky Is The Limit ” then you will be very happy today. As with all biotechnology stocks there are many risks where trials fail, but in this case the results are very good with a platform that deals with immunotherapy. Immunotherapy is long become the favored form of treatment for cancers because chemotherapy is toxic. This also follow along with other drugs that have severe side effects that make the patient’s quality of life less appealing. Immunotherapy, especially Inovio’s CELLECTRA electroporation device along with synthetic DNA vaccine codes is a lot safer for patients as it utilizes the patient’s own immune system (T -cells) to attack and kill these pre-cancerous and cancerous cells.

Inovio had gone up to a high of $14.20 per share in the morning , and the volume seems to be high after posting positive phase 2 results in patients with Cervical Dysplasia. So how do the results stack up in terms of validation? Patients had CIN 2/3 associated with HPV 16 and 18, and patients were either given VGX-3100 or a placebo drug counterpart. The results were good because VGX-3100 was able to achieve the ability to take CIN 2/3 down to CIN or actual clearance of the HPV in the study. The amount of patients that had their CIN 2/3 brought to CIN 1 or less was 53 out of 100 patients which brings the percentage to 49.5% this compares to placebo only coming in with a percentage of 30.6% or 11 of 36 patients.

Many bearish articles will come out to make false claims. They will find many items to spin to cause panic, but the bottomline is that they won’t mention one thing in their articles. They will not mention that Inovio had met its p-value of statistical significance compared to placebo. You will never see these bearish articles post that Inovio met its primary endpoint, in which case it did. Not only did Inovio meets its primary endpoint but it also achieved its secondary endpoint of virological response within the patients’ bodies compared to placebo. Around 40.2% or 43 out of 107 patients saw virological disappearance compared to placebo that only saw 5 out of 35 patients  or 14% with virological disappearance. There is no disputing the facts and that is that VGX-3100 met both its primary endpoint and secondary endpoint and will now move on to a phase 3 clinical trial.

We can also look to evidence above where Roche made a deal with Inovio. Keep in mind that the deal that was made was by Roche just observing only pre-clinical results of Inovio’s Syncon DNA vaccine and electroporation technology. For Roche to put so much faith in a small-cap biotechnology stock just by observing only pre-clinical results is amazing in itself. So we have validation that already occurred by a big pharma company — Roche — investing, and now we have validation of Inovio’s platform in its phase 2 results. Investors are missing the big picture here, because these results don’t just validate VGX-3100 but the entire pipeline has now been de-risked greatly. The CEO is currently expected to present the data today, and could allow the share price to rise slightly higher. The bottom line is that long term investors should be happy, because there is plenty of more good news to come regardless of short term trading. We think that Inovio is a strong buy and can create significant upside for investors over the next few years!

0

Sarepta Tumbles On New Drug Data But Presents A Big Buying Opportunity

Shares of Sarepta Therapeutics (SRPT) tumbled as much as 28% after it had updated its phase 2b data from its Eteplirsen study through 144 weeks. The stock stumbled down but not for the right reasons, and so we reiterate that Sarepta is still a strong buy for those long-term investors that have patience. Sarepta’s drug known as Eteplirsen is being developed for boys with a disease known as DMD -Duchenne Muscular Dystrophy. DMD is a disease characterized by muscle weakness and inability to walk due to reduced dystrophin levels. The disease occurs when a male child is born with an x-chromosome, but it is random in nature. Meaning not all boys born with the x-chromosome will have DMD, but it still is a huge possibility.

The breakdown of the results are important in understanding what the results mean for boys suffering from DMD. In order for Sarepta to test these patients walking ability they used a test known as the 6MWT or 6 minute walk test. This test is used to measure the amount of muscle strength the patient has to walk for a certain amount of distance before they are unable to do so anymore. The patients that took the 30 mg/kg and 50 mg/kg eteplirsen cohorts saw an average decline of only 33.2 meters from the normal baseline walking ability. The most important portion of the results is that patients taking the Eteplirsen drug saw an overall benefit of 75.1 meters or p less than or equal to .0004 which was way above the placebo group.

So with these good results on hand what has caused the stock to decline so much? Well for starters the CEO for Sarepta Chris Garabedian has stated that with this data the company can file an NDA to the FDA by the end of this year. The problem though comes from other media sources, and analysts that are now stating that Sarepta may have to delay their NDA. By this they mean that Sarepta may be forced to run a phase 3 trial to confirm that the data results can be taken as fact. All this doubt probably stems from another drug company known as Prosensa Holdings N.V. (RNA) which had failed a phase 3 trial on patients with DMD. All this doubt can be understood but what investors need to realize is that these two companies have different methods for delivering RNA oligonucleotides. The only similarity is that they both use RNA technology, but each company has a different method of action formulating their RNA technology.

Going forward though we think that the eventual approval for Eteplirsen will be possible. While we can’t predict what the FDA will want – meaning Sarepta may have to run an additional phase 3 trial as more proof of concept for DMD patients — the FDA is looking for a treatment to help these boys that suffer form DMD with no available treatment options. Sarepta’s Eteplirsen drug is safe, and has the ability to significantly increase the amount of walking distance compared to a placebo that hardly does anything to help these patients with DMD. We should note though that investors might see some short term volatility, but for the long term we tend to be more optimistic that the FDA will want to finally approve a treatment for DMD patients. Especially all the parents of the boys that are pushing hard on the FDA to finally approve a treatment for these boys to improve their quality of life. Sarepta currently trades at $21.36 per share which is close to its 52-week low of $12.12 per share so investors have an opportunity to buy for the long term. With that said we believe that this Sarepta tumble has created a big buying opportunity for investors to capitalize on in the near future.

2

Why I’m Still Long Rxi Pharmaceuticals After Recent Developments

Rxi Pharmaceuticals (RXII) is set to announce the results for its phase 2a hypertrophic scar trial at anytime in the coming months. The company uses a science that is emerging fast in the biotechnology industry known as RNAi or RNA Interference. The phase 2a trial that is set to release preliminary results deals with patients that have hypertrophic scars. Hypertrophic scars are raised scars that tend to grow for about 2 years and then start to level off after a certain period of time.

Current therapy which includes scar revision surgery, and silicone gel only lower the scar slightly in appearance. This is because typically after scar revision surgery the hypertrophic scar tends to grow back with a vengeance despite any effort to revise it. In terms of using the silicone gel it can slightly change the appearance of the scar somewhat but doesn’t level it off closely to the neighboring skin. This is where RXI-109 comes in, because it is attempting to reduce the amount of CTGF — Connective Tissue Growth Factor — on the scar itself. Typically a wound will heal properly on its own without any complications, but sometimes the wound healing process takes a major turn. This occurs randomly because the body sends too much CTGF to close off the wound. When this happens the resulting CTGF tends to be built up at the site of the wound forcing a raised hypertrophic scar.

The importance of this upcoming phase 2 result is major because it will validate Rxi’s sd-rxRNA platform. This is because RXI-109 is intended to be used for a multitude of skin and eye diseases in patients. Therefore validation of the sd-rxRNA platform with positive phase 2 results in hypertrophic scars will showcase the ability of the platform to be utilized using any other gene target. For example if the sd-rxRNA platform utilizes RXI-109 properly in hypertrophic scars then it will work for PVR – eye detachment, which then causes scarring after surgery to repair retina, liver fibrosis – scarring/damager of the liver, and Macular degeneration. Upon Successful results with RXI-109 the company can continue to grow into a big pharmceutical company. Rxi has recently established patent protection for the sd-rxRNA technology platform until the year 2029. With successful results in the phase 2 hypertrophic scar study, the company will then increase in value substantially because it can target any other unmet medical need utilizing the sd-rxRNA platform.

Catalysts For RXI-109 In Anti-Scarring

  1. Phase 2 data results for hypertrohic scars before the end of 2014 (can come now or at anytime before end of 2014)
  2. Initiate 3rd phase 2 trial using RXI-109 for hypertrophic scars in other parts of the body before end of 2014/beginning of 2015
  3. Phase 2 data results for keloid scars beginning/middle of 2015

One thing to note is that we can’t hypothesize the future results but we can always look at hints as to how well the clinical studies are going. For example the 3rd phase 2 study for hypertrophic scars in breast reconstruction surgery was set to start Q3/Q4 of 2014 but will be pushed up slightly. The CEO Dr. Geert Cauwengberg mentioned in the Jefferies 2014 Global Healthcare presentation that they wanted to expand the study to not only target hypertrophic scars on breast reconstruction surgery but to also target hypertrophic scars on other parts of the patient’s body. That is one piece of evidence that RXI-109 is showing some substantial clinical efficacy. Another good note mentioned from the Jefferies Conference was that the CEO saw some early picture results from the phase 2 hypertrophic scar study and said that the company was impressed. Of course the results are double-blinded so they don’t know which is placebo or RXI-109 but there is a very small chance that a placebo drug (saline or other placebo) was able to dramatically reduce hypertrophic scars to that extent. That’s another key piece of evidence that RXI-109 is performing well in patients with hypertrophic scars.

Investors can also glance at recent developments with RXI-109 that also hint to a superior RNAi antisense oligonucleotide compound. For example Rxi recently announced  a positive pre-clinical dose range finding study in the eyes of monkeys. The study showed a reduction in mRNA — messenger RNA — in a dose dependent manner in the retina. That was not the amazing part of the RXI-109 compound though, because the company was testing the retina to begin with. The surprise came when the company noticed a reduction of mRNA in the cornea as well, when the company was only targeting the retina. That just shows some of the true power of the RXI-109 compound and the ability for the sd-rxRNA platform to deliver it through the tissue without a delivery vehicle.

So why was this mRNA reduction in Cornea a big find compared to the retina only? Well this is because the RXI-109 compound is soluble because of the way it has been formulated by the company. This means that Rxi can turn the RXI-109 compound into a topical cream form that can be used in cornea scarring which occurs in a bigger population than retinal scarring.

PVR – Proliferative Vitreoretinopathy

PVR  occurs when retinal reattachment surgery fails. This is because sometimes the membranes contract after reattachment causing the retina to detach itself, which causes more problems. Even in an attempt to reattach the retina it is difficult to do so because the surrounding skin is detached. This detachment/damage can possibly cause scarring which can lead to vision loss. The hope here is that RXI-109 can repair the scarring of the retinal eye tissue that will allow a more successful reattachment of the retina, and improved vision. PVR occurs in about 8% to 10% of patients that undergo retinal detachment surgery. This is a nice target for Rxi because it can be requested from the FDA as an Orphan drug status since it is an unmet medical need with a small population of patients.

Catalysts For PVR

  1. Complete GLP toxicity study for RXI-109 intraocular injection 2014
  2. File IND for PVR to the FDA before the end of 2014/beginning 2015
  3. Trigger milestone payment from LPC upon successful IND filing for PVR

If you look at the catalysts above you will notice that all is needed to file an IND for PVR is one more toxicity study. This is because all other pre-clinical testing for RXI-109 has already been done for the anti-scarring compound. Therefore to advance RXI-109 for the ocular programs is a smooth transition because all that is needed is ocular toxicity studies. In addition to that ocular toxicity test lies the ability for Rxi to trigger a milestone payment for filing the IND of the PVR compound. This deal comes into play back in April of 2014 when Lincoln Park Capital agreed  to buy $20 million dollars worth of Rxi stock over a 30 month period. The primary reason for the deal was to help Rxi fund a lot of the pre-clinical ophthalmology products in the pipeline. The main function of the deal was that Lincoln Park Capital had agreed to purchase $1 million worth of Rxi common stock at prevailing market prices every time an IND compound is filed from the ophthalmology pipeline.

Macular Degeneration

Macular degeneration  is a huge deal for a lot of biotech companies because of the potential revenue of a drug compound that can help patients regain vision in the eyes. Macular degeneration occurs with old age, and causes the tissues to thin or crumble into the macula of the eye. These deposits of tissues — known as drusen — lead to Dry-macular degeneration because they are deposited into the macular area of the eye. Dry-macular degeneration is known as non-neovascular because it doesn’t deal with leaky blood vessels. About 10% of the dry-AMD cases worsen and turn into a more advanced form of AMD known as wet-macular degeneration. This is where blood vessels form beneath the retina which leak damaging the retinal cells. The damaging of these retinal cells lead to extreme vision loss far worse than that seen with dry-macular degeneration. There are about  11 million people in the U.S. with some form of macular degeneration, and it is expected to double to 22 million people by the year 2050.

To get a good idea on the potential revenue for a macular degeneration drug compound we can take a look at Regeneron Pharmaceuticals(REGN). Although one key thing to note is that this revenue generated by the Eylea drug injection is only for Wet-macular degeneration which only accounts for 10% of the macular degeneration population. For instance net product sales  in the fourth quarter of 2013 for Regeneron ended at $406 million dollars, which is way above the previous year’s final fourth quarter net product sales at $286 million dollars. Surprisingly Regeneron’s eye drug Eylea accounted for $402 million dollars of net product sales. This just shows how much revenue can be generated with only 10% of the macular degeneration market, and doesn’t at all include dry-macular degeneration which is a bigger market. Regeneron expects 2014 sales for Elyea to come in at $1.7 billion dollars. If Rxi Pharmaceuticals is able to establish itself in dry-macular degeneration then it can reap in billions of dollars. There are many trials currently underway to treat dry-AMD, but no drug has yet been approved by the FDA for dry-AMD. Since there is no treatment yet approved by the FDA it is hard to estimate exactly the amount of revenue that can be generated. But many big pharmaceutical companies are estimating that treatments for dry-AMD can be in the multi-billions.

This is where Rxi comes into play with its macular degeneration drug. For starters Rxi has two macular degeneration drug compounds in pre-clinical testing. This allows for reduced risk because if one is unsuccessful then the company can fall back on the other compound. For example look at the graphic below with the compounds in the pipeline.

(click to enlarge)

source: www.rxipharma.com/pipeline /

If you look at the image above you can see one macular degeneration compound underneath the PVR drug compound. This was Rxi’s initial work of its own macular degeneration compound. Now if you look all the way to the bottom you can see “self delivering” adaptation to acquiredOpko (OPK) Estate. The reason for Rxi acquiring this was because Dr. Geert Cauwenberg met with Dr. Frost CEO of Opko Health and formulated a deal . For starters the macular degeneration drug acquired from Opko is known as Bevasirinib. Bevasirinib failed in the past in a phase 3 trial because the compound was and still is a naked siRNA molecule What this means is that the drug compound was not potent enough to be delivered locally into the eye to cause an efficacious effect. Frost knew that with this Bevasirinib RNAi patent and other RNAi patents there was nothing that could be done to deliver them to the patients properly. After Dr. Frost sat down with the CEO and noticed how Rxi had developed the sd-rxRNA delivery platform and could deliver any type of RNAi molecule without a delivery vehicle he felt compelled to create a deal with Rxi. Which is now the reason why Rxi is taking the Bevasirinib molecule and rearranging the guide strand and passenger strand to enable it into its own sd-rxRNA technology platform. The trick here is that by utilizing Rxi’s delivery platform it will allow the Bevasirinib compound to reach potency in the patient’s eye instantaneously and help patients with the macular degeneration disease.

Bevasirinib is a VEGF inhibitor which has been a genetic target for eye diseases for a long time. This is because when VEGF is over-expressed in a patient’s eye it causes vascular disease which leads to macular degeneration. Rxi can utilize Bevasirinib as a VEGF inhibitor, but it can also have a future advantage over other competitors because it can add one additional compound to the mix. For example the VEGF inhibitor can deal with the over expression of vascularization, but doesn’t do anything for the damaging of tissue itself. This is where Rxi can combine RXI-109 — anti scarring/tissue repair — along with the VEGF inhibitor and formulate it as one stand-alone compound. So this would knock out two birds with one stone, because it would help with two positive effects instead of one.

How powerful can Rxi’s Bevasirinib compound become? Well if it proves clinical efficacy in later stage trials it will revolutionize treatments for eye diseases. To get the proper support for bringing this program and other ophthalmologic programs forward Rxi had recently hired  Peter Campochiaro M.D. to the Scientific Advisory board just this week. If we look more into the new hire then we can view this as a major positive, because Peter serves on multiple scientific advisory boards for other pharmaceutical companies. Also this M.D. has extensive experience with VEGF compounds at the John Hopkins Wilmer Eye institute. Matter in fact he has more than 300 articles published in peer-reviewed medical journals, and was one of the scientists on early work with other VEGF compounds. As the Chief Development officer for Rxi Pamela Pavcostates :

We are honored to have Dr. Campochiaro join our Scientific Advisory Board. He Brings a Wealth of clinical research experience in ophthalmology to the Company that we will leverage to advance our ophthalmology program”

The quote above states how great of an asset Dr. Campochiaro will be to the success of Rxi in its Ophthalmology pipeline. It is a huge positive that such a well known name in the science industry is interested in joining a small-cap biotech stock with big potential for the VEGF inhibitor.

Catalysts for Macular Degeneration

  1. Perform additional ocular toxicity studies with both VEGF together with RXI-109
  2. Faster pre-clinical results can be produced possibly by at least 2015 because RXI-109 ocular toxicity study is done. Also Bevasirinib has already been through clinical studies up to phase 3 before so limited testing will be needed to file an IND
  3. Eventual IND filing of Bevasirnib and other macular degeneration compounds can lead to another milestone payment from LPC

Retinoblastoma

Retinoblastoma  is eye cancer that occurs in children under the age of 15. One thing to note about Retinoblastoma is that it is a rare disease which hardly has any treatment options. For instance current treatment of the retina includes chemotherapy and radiation treatment. Both of which is unpleasant for patients of many types of cancer, especially for children under the age of 15. If the tumor is small it can be treated with chemotherapy, but complications can arise. Such complications include blindness, and the necessity to remove the eye if current treatment fails. This is another part of the ophthalmology pipeline so another milestone payment will be triggered upon the successful filing of this IND as well. We should note though that this disease will treat an unmet medical need in children so much so that Rxi has received an NIH/NCI SBIR Grant for its Retinoblastoma compound. The funding from NIH — National Institute of Health — comes into play because the NIH is addressing to fund companies to lessen the burden of cancer with safer forms of treatment. Once again Rxi can also apply to the FDA for Orphan drug status for this compound as well.

Retinoblastoma occurs because of a gene known as the RB1 gene that is overexpressed in the patient’s retina. Initial testing to date has shown dose dependent silencing of mRNA in Retinoblastoma cell lines just 48 hours post administration of the compound. Rxi used a gene known as MDM2 — Murine Double Minute Gene 2 — because it acts as a negative regulator of the p53 pathway which is responsible for cell proliferation — cell growth and cell division. The goal for Rxi is to down regulate this gene using mRNA, thereby suppressing the tumor indefinitely. Company has seen remarkable results in the RB176 and RB177 cell lines. This is because sd-rxRNA platform was able to show mRNA reduction of Retinoblastoma cell lines even 14 days after a single intravitreal injection into a mouse. The Retinoblastoma compound is the company’s first target against cancer, so there is also a huge precedence if the sd-rxRNA platform proves to reduce cancerous tumors.

Catalysts for Retinoblastoma

  1. Pre-clinical results for cell proliferation in vitro in 2014/2015
  2. Pre-clinical results of MDM2 gene utilizing sd-rxRNA platform in human Retinoblastoma cells in a xenograft model 2015
  3. Another milestone payment when an IND is filed possibly sometime in 2015

Opko Estate RNAi Patents And Beyond

Besides Bevasirinib the deal with Opko allowed Rxi to expand upon its patent portfolio even more. Eventually Rxi can apply its sd-rxRNA technology to ICAM-1, Angiopoietin-2, and most importantly HIF-1a which is expressed in a lot of cancerous tumors. Rxi is continuing to build itself into a strong biotechnology company, because it knows the potential value of all these compounds that it is working on. Matter in fact just last week Rxi announced  that it will be moving into an even bigger office location necessary for expansion. That should be another hint that RXI-109 is doing well with RXI-109 sales in Europe as a “Specials provision “, and that the phase 2 double-blinded data looks encouraging in the pictures as mentioned above.

If all this data wasn’t enough to impress well lets just say that there have been no insider sales recently, and the CEO of Rxi continues to purchase RXII shares continuously on the open market. The CEO has been buying since August 22, 2013 all the way up until recently July 2, 2014. The CEO currently holds about 28,600 shares of Rxi Pharmaceuticals according to the SEC-Form 4 filing . We think it is bullish that the CEO continues to buy Rxi shares on the open market and has not sold a single share to date.

Financials To Last For Awhile

A lot of investors are typically worried about dilution with small-cap biotechnology stocks. The good news is that Rxi Pharmaceuticals doesn’t have to worry about dilution for a very long time. As mentioned above the Lincoln Park Capital deal above will help Rxi to fund its Ophthalmology pipeline. Even with the anti scarring RXI-109 compound thrown into the mix the company has enough cash to run the company until Q2 of 2017. It was great that Rxi established the LPC deal, because without that deal the cash runway would have only lasted until Q2 of 2015. Now the company is set to operate freely with no cash worries until 2017.

Partnering Opportunities

Although upon successful phase 2 hypertrophic scar results the company will be able to partner out the other compounds in the pipeline, like its liver fibrosis compound which is becoming a huge buzz in the biotechnology industry. A compound that is able to heal liver fibrosis could generate potential billions of dollars. Therefore Rxi would have no trouble partnering out the compound upon confirmation of its sd-rxRNA technology platform. Besides partnering out compounds some pharmaceutical companies may even want to utilize Rxi’s sd-rxRNA technology so they can deliver their own RNAi oligonucleotides with no delivery vehicles required. The possibilities of this platform could be endless and this company could generate a lot of buzz on wall street in the coming months.

Conclusion

Rxi Pharmaceuticals has seen a 52-week high at $6.84 per share, and has since declined to its current share price of $2.68 per share. It is slightly above its 52-week low of $2.55 per share so it is a good opportunity for investors to get in around this area and potentially profit off of the nearing phase 2 hypertrophic scar result catalyst. We should state though that investors should be aware of the risk that the data is still double-blinded, and there is no guarantee of success. Investors should invest on the notion that a trial failure can result in a complete loss of their money. Therefore people should invest in Rxi based on their risk tolerance level. We believe that Rxi Pharmaceuticals has done something that has never been done before in RNAi space, and that is to create a self delivering RNAi compound without the use of a delivery vehicle. We feel that investors should do their due diligence, and consider some type of position in Rxi before the catalyst comes that will change the future of the company forever.

0

FDA Approves Mannkind’s Afrezza, A Better Case for Patients With Diabetes

Many investors were made happy on Friday, June 27th  when the FDA had decided to approve Mannkind’s (MNKD) Afrezza for patients with both type 1 and type 2 diabetes. The news of this approval on Friday would be considered excellent except for the fact that the stock tanked by 10% or more on concerns of the FDA label. The label puts a lot of limitations of use for Afrezza , and so there are skeptics who think that Mannkind won’t achieve great sales, or will have a very tough time finding a partner to market the inhaled-insulin drug. Today the stock has gained 10% or more after investors have had time to digest the news that this could be a revolutionary treatment for patients with diabetes.

Current therapy for patients with diabetes deals with regular insulin injections, but these injections can be very uncomfortable for the patients. The currently approved Afrezza from Mannkind is inhaled insulin which is far better than patients having to stick needles into themselves. Think of this change as a new quality form of life where patients have an easier time treating their diabetes. Another added benefit is that patients that inject their insulin will have to wait an hour or more before the effect kicks in for proper insulin levels in the body. On the other hand Afrezza can help a patient with diabetes achieve their proper insulin level around 13 minutes after treatment.

There are approximately 29.1 million people in the United states that either have type 1 or type 2 diabetes according to the American Diabetes Association. There is quite a bit of differences between patients with type 1 and type 2 diabetes but they both deal with some problem the body has with insulin. For instance with type 1 diabetes patients are unable to produce insulin that the body needs – so lack of insulin production is a big problem for the body. Patients with type 2 diabetes generate insulin in the body but their bodies lack the ability to efficiently use the insulin that is produced. There are many symptoms associated with diabetes but some of the main ones deal with frequent urination, feeling very thirsty all the time, and feeling hungry even after eating. Some people may even have diabetes and not know it because patients with type 2 diabetes have mild symptoms that people pass off as nothing worth exploring.

Mannkind has a great victory with this approval especially since it has gone up many times seeking FDA approval for Afrezza. The problem was that the FDA continually wanted more tests to be done to prove that inhaling insulin could help patients control their diabetes. As with any drug compound there are some downsides that may or may not affect the future of Afrezza on the market. One problem is that Afrezza will not completely replace long acting insulin, but on the plus side it could be used throughout the day before meals as a less invasive alternative. Another problem is that the FDA put a label stating that Afrezza can’t be used in patients with lung diseases such as asthma so this will limit some of the potential market for Afrezza.

We believe that despite these label additions Afrezza will still target a huge market for patients with diabetes. The stock currently trades at around $11 per share but there is still plenty of room for share appreciation. Share price appreciation can come because of a possible partnership or future revenue. There will have to be some kind of partner out there for Mannkind that wants to reap the benefit of generating billions of dollars with the amount of patients with diabetes. More about Mannkind’s press release for FDA approval of Afrezza can be found here. We think that long term investors should do just fine holding onto a position that will rise in the years to come, and we think Mannkind is a long term buy.

0

Vertex Pharmaceuticals Creates Combo Magic And Achieves Positive Results for Cystic Fibrosis Patients

Today Vertex Pharmaceuticals (VRTX) , a biotechnology company focused on creating cures for rare diseases, announced positive results from two crucial phase 3 trials for a combination of drugs being used to treat patients with Cystic Fibrosis. This was a huge event for Vertex Pharmaceuticals, because a miss with this study would have send the stock tanking by a huge margin. Good thing for investors though is that the results were extremely positive and the stock surged as high as 40% during the trading day.  One key thing to note is that Vertex combined two if its drug compounds lumacaftor and ivacaftor respectively to combat patients with cystic fibrosis with two copies of  the F508del mutation in the CFTR gene.

The first drug from Vertex Pharmaceuticals Kalydeco treats cystic fibrosis with many types of genetic mutations except the F508del mutation listed above. So the maximum population that can be treated with Kalydeco are approximately 2,000 patients. The reason for the stock surging as high as it has today is because the new targeted mutation will be able to treat approximately 20,000 patients. This increases the value significantly because in the long run it will mean more revenue for Vertex. Currently Kalydeco costs $200,000 for treatment which is a substantial amount, but the new drug combination has yet to be priced by the company. The company will definitely take into account many factors when determining price, especially since there are no other treatment options for these patients.

The results were positive because the combination of drugs from Vertex was able to meet the primary endpoint which was improvement function of the lungs. The problem with Cystic Fibrosis is that patients that have these abnormal mutations of these genes generate an overabundance of thick mucus in the lungs. The body needs watery mucus to keep infections away, but in Cystic Fibrosis patients develop sticky/thick mucus which causes the airways of the lungs to be blocked. This also allows infections to develop which is a big reason why these patients have to go to the hospital quite often. The way these results were measured was by using ppFEV which means the percentage predicted forced expiratory volume in one second. In other words it was a measure of lung improvement percentage wise over placebo. The ppFEV achieved was between 2.6% and 4% from the baseline compared to placebo. This means that the p-value was statistically significant since p was less than or equal to 0.0004.

On top of meeting the primary endpoint the combination of drugs from Vertex also reduced the rates of pulmonary exacerbations which will help a lot more with patients staying out of the hospital due to an infection or inflammation. This drug once out on the market will mean a lot for Vertex so they will try to push it along quickly through the regulation process to get it approved to distribute on the market. The company is wasting no time because they expect to file an NDA In the U.S. and MAA in Europe in the 4th quarter of 2014. One key thing to note though is that this treatment is only set to be approved for patients that are age 12 or older because more testing may be needed for safety concerns. The CEO doesn’t want to get this drug out there to children with Cystic Fibrosis that are under age 12 until every kink has been worked out. Which we think is a good gesture, because the company is not looking out just for profit but for the well being of these patients that are actually suffering from such a terrible disease.

Even though the stock surged as much as 40% today closing at around $93.65 per share, we believe that the share price can rise steadily higher in the future. Remember that this is dependent upon how the new combo drug will be priced on the open market but if anything it will probably be at or above the current price of Kalydeco which is $200,000 dollars per treatment. So we believe that their is still plenty of time for the share price to rise higher in the coming years. Vertex still has a pipeline full of other rare disease compounds it is working on so there is still plenty of room to grow revenue besides the Cystic Fibrosis drugs. These patients with the F508del mutation  of Cystic Fibrosis lose about 2% of their lung function each year. This drug is remarkable because it can actually reverse the process and save these patients from losing percentages of their lung functions each year. More info about today’s results can be found here. We think that Vertex Pharmaceuticals is a great long term buy, and investors should take a look at the company’s future prospects.

 

 

0

Isis Pharmaceuticals Shows Positive Results In Patients With Type 2 Diabetes

Today Isis Pharmaceuticals (ISIS) has posted final positive phase 2 results in patients with type 2 diabetes. The drug compound for Isis is known as ISIS GCGR RX , and is known as an antisense compound. That means that the company uses RNA targeted technologies against diseases with unmet medical needs. Treatment for these patients combined ISIS GCGR RX with the addition of metformin therapy to produce remarkable results. Matter in fact the combined treatment was able to reduce hemoglobin A1c or HbA1c up to 2.25% from baseline in only 13 weeks. One might ask what is so impressive about that type of reduction?

Well if we take a look at the result of the placebo drug compound instead then we can see a big difference compared to Isis’ drug compound. The placebo drug was only able to improve HbA1c by only 0.25% from baseline in that same 13 week period. That means patients on the ISIS drug compound were able to achieve a significant reduction of glucose in the body which is a big step forward to help these patients with type 2 diabetes. This full set of data was presented at The American Diabetes Association 74th scientific sessions. That presentation results in itself is amazing, but what makes this news even more prevalent is the fact that it was presented as a late-breaking abstract.

Late-breaking abstracts are given the ability to be presented at big events despite being late, because they offer results that are outstanding. In this case the positive results in phase 2 bodes well for Isis Pharmaceuticals because it has the ability to tap a very huge market with a huge unmet medical need. There are around 350 million plus people worldwide that suffer from type diabetes, and current treatment does have its setbacks to block the advancement of the disease to a further state. The importance of type 2 diabetes health has to do so with the fact that patients with the disease are at increased risk for other serious diseases. Type 2 diabetes can lead to stroke, heart attack, and other serious medical conditions.

It is imperative to continue to advance treatments for Diabetes, but it is nice to see that RNA antisense is able to achieve such remarkable results. Truth be told this wasn’t a game changer for Isis, because the company does have a pretty big pipeline with a lot of other drug compounds utilizing RNA tech. Still this is significant news for the company and it can now move forward to a phase 2/3 trial with an even bigger patient population. Although the company remains prudent on doing additional phase 2 testing by adding in higher doses of ISIS GCGR RX to test the highest limit possible without major serious adverse events prohibiting from going further. The best part though is that increasing the doses should be substantially considering the patients didn’t get any major adverse reactions.

The most significant reactions that occurred were injection site reactions which were dealt with quickly, and posed no immediate threat to the patients. The stock currently trades at around $34 per share , and currently has a market cap of $4 billion dollars. The good news though is that the company valuation is spot on at the moment for the amount of potential it has. As with all biotechnology stocks it has plenty of room to grow as we have talked about its extensive pipeline before. A few minor trial failures will not spell trouble for this biotech which has already established some nice partnerships with big pharmaceutical companies like Biogen Idec (BIIB). We remain to state that Isis still holds great value for the long term, and if successful in just a few of its drug compounds could grow into a big pharmaceutical company someday.

0

Merck Felt Lonely In The Hepatitis C Space, Acquired Idenix Pharmaceuticals

Merck (MRK)  has been struggling lately with its pipeline and it had to take steps to stage a comeback with new form of revenue. Recently the success of Gilead’s (GILD) Sovaldi has sparked a huge phenomena for the hepatitis C market, and rightly so because Gilead made about $2.3 billion dollars in one quarter from Sovaldi sales. Analysts predicted much less in sales by about $1 billion dollars roughly so Sovaldi hit the ball out of the park with a home run. Today Merck had paid $3.8 billion dollars to acquire Idenix Pharmaceuticals (IDIX) or $24.50 per share. So why on earth would Merck want to acquire Idenix Pharmaceuticals if Sovalid is already in the race and gaining a huge chunk of the Hepatitis C market?

Well for Starters Merck thinks that even Sovaldi won’t be opportunistic to be combined well with other drugs to treat hepatitis C patients, and that the entire market won’t be captured so quickly. Also Merck has been working closely with other drug compounds of its own for Hepatitis C, and they believe they can achieve even greater efficacy for patients by a huge margin. This huge margin would occur by combining Merck’s current Hep C drug compounds together with a nucleoside analog drug and cure Hep C patients between 3 to 6 weeks. Gilead’s Sovaldi is also a nucleoside analog drug compound, so Merck can’t have any access to experiment with that drug, but Idenix’s drug compound is all open game for anyone for the taking.

Merck believes that by combining its current Hep C drug compounds together with Idenix’s Nucleoside drug compound it can cure patients in a much shorter time frame. Whether that is likely to be true remains to be seen, but Merck feels that this acquisition is worth the chance to see if something good comes out of it. We don’t fault Merck for attempting this because it has the opportunity to capitalize on something that may prove to be successful for the company’s bottom line. With the ability to cure patients with Hepatitis C in a smaller time frame it can easily compete with Gilead’s Sovaldi, and may eventually capture more of the Hepatitis C market.

In any sense it was good for Merck to do this because these treatments are needed for 140 million chronically infected Hepatitis C patients worldwide, and previous treatments dealt with toxic Interferon and Ribavirin which left many patients feeling very sick. Although Merck got a good deal out of it because the $3.8 billion dollars it spent today, was nothing in comparison for Gilead buying Pharmasset for $11 billion dollars. So Merck has a shot here to increase its share price for shareholders and potentially bring a new blockbuster drug to market. The only problem is though that it will take time to test out the acquired nucleoside analog compound together with Merck’s own Hepatitis C drug compounds.

In the meantime Gilead’s Sovaldi will establish a pretty strong position in the market so Merck has to hope that this acquisition will pay off big time in the long run. This deal is a savior for Idenix shareholders, because back in February 2014 the FDA contacted Idenix and put a hold on its other Hepatitis C drug compounds that were nucleotide polymerase inhibitors. The reason for the initial halt by the FDA and then stopping the trials of these compounds were the fact that Bristol-Myers Squibb had problems with the same type of compound. The problem was that patients in the Bristol-Myers Squibb trial being treated for Hepatitis C with nucleotide polymerase inhibitors saw nine patients hospitalized , and had one death occurrence. We believe that Merck may come out on top but it will take time for the trials to show top-line results. Although Merck is at a pretty good valuation so many investors can buy the company now for the dividend and the possibility of future growth. Like anything in biotechnology this acquisition is not a sure thing, and something may or may not eventually come out of this. The deal is set to be done in the 3rd quarter of 2014 so investors will have to watch and see what transpires over the coming months for Merck. Invest Wisely, and Remember ” Due Diligence Creates The Best Picks In The Biotech Sector”.

0

OncoSec Impresses With Phase 2 Melanoma Results At ASCO 2014

Every year a whole bunch of biotech companies that target cancer as an indication are invited to present some of their data at ASCO, also known as American Society of Clinical Oncology. Typically companies with substantial new data are allowed to present poster data that highlight their key compound and how well it helped patients that deal with a specific type of cancer. A lot of companies had a great showing but we are going to take a look at OncoSec Medical (OTCBB:ONCS). Typically big companies are highlighted for ASCO but OncoSec may have a huge breakthrough help for patients with advanced melanoma.

Melanoma is a type of skin cancer, and that skin cancer in the advanced stage can lead to death. OncoSec takes part of its platform from Inovio because it utilizes the electroporation device that is responsible for briefly opening up the T-cells in the body so that the antigen may enter those T-Cells and give certain instructions. The key difference from Inovio though is that OncoSec has created their own vaccine known as IL-12 that is a specifically built antigen to code inside the body’s own T-Cells. Also OncoSec doesn’t create Synthetic DNA like Inovio does so the companies do have their own key differences.

This trial data presented at ASCO 2014 was a Poster Presentation ASCO Abstract # 9025 with the title ” Systemic anti-tumor effect and clinical response in a Phase 2 trial of intratumoral electroporation of plasmid interleukin-12 in patients with advanced melanoma”. The phase 2 trial enrolled 30 patients for the study, but only 28 were evaluated for an Objective Response Rate (ORR). An Objective response rate is improvement in quality of life for the patient and that their mortality slightly decreases over a time period. The ORR response rate came in at 32% of evaluable patients or 9 out of 28 patients. This is a pretty good rate if you think about it, because remember these patients are at an already advanced stage of Melanoma when they entered this trial. To see such a nice response at this stage of the game is amazing, and should be noted that this immunotherapy technology can lead to treatments for other types of Cancer. There was also an 11% or 3 out of 28 patients that had a Complete Response Rate (CR) which is downright amazing. Complete Response rate just doesn’t deal with improving quality of life for the patient that deals with cancer, complete response means removing the cancer from the patient completely eradicating it.

The following Data highlights the tumor lesions themselves while the data Above was based of the ORR at 24 weeks in patients by using the RECIST 1.1 Criteria. The Recist Criteria is a tool that is used to measure ORR in patients being treated for Cancer. Of the 85 evaluated lesions,  38 of the lesions saw a Complete Response Rate. This data is remarkable and we think that investors still have a long term opportunity to get into the stock and appreciate a higher share price in the future. There are a few rare OTC stocks that are good but the majority of the time you have to go out and find them. OncoSec was out in the open presenting at one of the biggest Cancer conferences of the year ASCO 2014. Sure investors can appreciate the share price rising from where it is now at $0.84 per share, but long term value of this company passing a phase 3 can be so much more than currently be imagined. Plus in the addition we must consider that eventually like other biotechnology stocks the company should want to try and attempt to up list their company stock to a national exchange to get more exposure. Whether you are a short term trader or a long term buyer OncoSec medical provides the ability to make money on both ends of the spectrum. More on the press release for the news from ASCO 2014 can be found here, and we encourage investors to visit OncoSec’s website to learn more about the company itself.  Invest Wisely, and Remember ” Due Diligence Creates The Best Picks In The Biotech Sector”!

 

0

Valeant Won’t Let Go Of Allergan, Raises Bid For The Company

Valeant Pharmaceuticals (VRX) just isn’t the one to give up on a bid for a company that it really wants to acquire. Today Valeant had decided to raise its bid for Allergan (AGN)  in terms of cash by an additional $10 per share or $58.30 in cash. This is a 20% increase in cash payment, and would bring the current bid to $49.4 billion dollars for Allergan. The CEO of Valeant Michael J. Pearson isn’t going ahead with the deal alone  because it has the support of Pershing square Capital which currently owns about 9.7% of Allergan.

Bill Ackman who leads Pershing Square Capital broke News earlier this year that it wanted to acquire Allergan with Valeant Pharmaceuticals, and Allergan’s share price immediately rose by 23 percent on that news. Many investors called to question the ability for Ackman to be able to announce the acquisition of Allergan together with Valeant considering that Pershing Square Capital already owned 9.7% of Allergan. Regardless of the ethics for this deal, Allergan had stated that the bid severely undervalued the drug makers current prospects. Also Allergan didn’t like the fact that Valeant continues to operate just by acquiring other companies. Allergan claims that it is not a sustainable business model for Valeant, and that future R & D is and will continue to suffer in the coming years because of it. We tend to agree with Allergan because pharmaceutical companies are all about research and development of new drug compounds.

What if the ability for Valeant to acquire pharmaceutical companies comes to an end? We believe it is far superior to build a nice R & D pipeline while continuing to acquire only when it is absolutely necessary. Valeant wants Allergan to come to the table to so that they can make some sort of agreement with each other, but Allergan believes that it can do better to build the future of its company on its own by creating new drug compounds. Allergan has been quite successful with Botox, and sales for Botox are expected to reach about $3 billion dollars by 2017. Just the sales alone from Botox is enticing enough for Allergan to be acquired but Valeant also has its eyes on another compound from the company. Allergan is working on an age-related macular degeneration compound.

This Age-related Macular Degeneration compound is currently in phase 2 clinical testing, and is known as AGN 150998. This drug compound utilizes VEGF which is an inhibitor drug compound for many eye diseases but the company makes use of an improved inhibitor for eye diseases known as VEGF- DARpin. So why is Valeant so eager to obtain Allergan so quickly? We believe this has to be because Allergan is expected to release the phase 2 results for AGN 150998 in the 3rd Quarter of 2014. Positive results in this indication would significantly increase the value of the company. Thus would make it harder for Valeant to acquire the company as it would have to bid a lot higher than its recent bid. Also Botox is currently being used for face injections but is also being used more to help develop clinical neurological products. We believe that the flexibility of Botox brings out additional value for Allergan, and thus why Allergan still has not liked any of the current bids from Valeant.

The macular degeneration market is huge so even if we take out Botox, positive results from the phase 2 AGN 150998  would make Allergan an attractive buy not just for Valeant but  many other suitors. It would then gain interest from other big pharmaceutical companies like a Glaxosmithkline (GSK). Allergan remains vigilant though, and would still refuse a higher offer on the basis that Valeant wouldn’t be responsible  enough with its pipeline. Allergan points to Valeant purchasing Bausch & Lomb last year in 2013 for $8.7 billion dollars, and not growing the franchise that it has acquired. Allergan is afraid that a sale of its company to Valeant would be a disservice to its shareholders, and the reason for the continuous rejection of bids. We think that Allergan is making the right decision for its shareholders and should continue to hold its ground. Invest Wisely, and Remember “Due Diligence Creates The Best Picks In The Biotech Sector”!

0

Pfizer Needs A New Game Plan After Latest AstraZeneca Bid

We have all heard talk about Pfizer Inc. (NYSE:PFE) seeking to acquire another big pharmaceutical company known as AstraZeneca (NYSE:AZN). Many weeks have passed by and I have discussed in my previous article why Pfizer wants to acquire Astrazeneca. The main point of the acquisition would be to help Pfizer’s pipeline which to put it in nice terms is falling apart. There is no question that Pfizer is desperate to acquire AstraZeneca, so much so that Pfizer has decided to put one last big bid on acquiring the big pharmaceutical drug maker.

Pfizer made one last bid offer of $120 billion dollars to acquire AstraZeneca but alas it seems that the shareholders for AstraZeneca aren’t budging to engage this deal. Under European Law a company that bids for another company has one month to finish the proposal or else they automatically forfeit the right to do so in the interim. That’s not to say they can’t bid for it again but they will have to wait a very long time ( around 6 months time frame) which by that time the two parties may not even be interested in negotiating a deal with each other by that time. If any kind of deal is to take place it would be before the deadline on Monday May 26, 2014. So what exactly is AstraZeneca holding out for? AstraZeneca is holding out for $127 billion dollars which is at least only $7 billion more from the current proposal. Although Pfizer hasn’t ruled out the possibility of adding a higher bid than its so called final offer.

We believe that Pfizer needs to forget about trying to acquire AstraZeneca for some of its compounds, and we think that it should instead put its focus on using the $120 billion dollars in pieces. By pieces we mean to acquire other names on the market that can provide it better long term value. Also acquiring a multitude of various companies will limit their risk in the long run. For instance if it acquires 4 various companies and one of them doesn’t work out then they still have a future path going forward. On the other hand if they just acquire AstraZeneca and later decide the deal wasn’t worth it then it may be too late to undo what it has already done. So what kind of companies can Pfizer acquire that would be worth the money? Well it should look towards future growth in our opinion, and should forget about acquiring another company with expiring patents.

For the first example Pfizer could look at a Gilead Sciences (NASDAQ:GILD) because it already has established drugs in the market under an HIV franchise. It has also recently been able to create a blockbuster drug for hepatitis C, and that drug is known as Sovaldi. Why would Pfizer want to acquire this larger cap company? Well quite frankly Sovaldi has become a goldmine and will continue to be a goldmine in the near future. Sovaldi was created to not only treat Hepatitis C patients but to cure them completely of the disease. Wall street estimated that Sovaldi would get about $1 billion dollar in sales, but the company exceeded that expectation by a huge margin obtaining about $2.27 billion dollars ending March 31st 2014. So as we have discussed Pfizer could acquire Gilead Sciences for expected future revenue from Hepatitis C sales, and to obtain Gilead’s HIV drug compounds.

Another example would be a biotech that is targeting nothing but rare diseases. This drug company is known as Biomarin Pharmaceuticals (NASDAQ:BMRN) which has already a long list of approved drug compounds to treat rare diseases. Pfizer should probably look into this one as well, because Biomarin continues to pump out drug compounds that receive Orphanstatus. Orphan Status has many advantages but the key advantage is the fact that biotech companies are able to obtain a longer patent status for the current patent. Regular drug compounds or non-orphan drugs get less years of market exclusivity before a generic company can copy the compound. Orphan status allows the biotechnology company more years of additional revenue before generics can come to market. With Pfizer acquiring Biomarin it would obtain longer market patent exclusivity along with obtaining the entire market itself. This is because with rare diseases one drug rules the market so Biomarin can charge a lot per treatment. Some rare disease treatments can get up to $250,000 or more per year so Pfizer will do well to look into Biomarin which is expected to grow further in the future.

We believe that Pfizer is panning down the wrong road and should look to acquire companies that are actually innovating in new areas in the life science industry. With $120 billion dollars Pfizer should branch out and acquire multiple biotechnology companies that are still creating value for shareholders. While AstraZeneca seems like a good buy to become a larger entity we believe it would be a bad move for Pfizer. Pfizer will do better to do some due diligence and look biotechnology stocks that will help it grow revenue in the coming future. We believe that the deal from Pfizer for AstraZeneca  should be absolved and Pfizer should consider adding to its pipeline in increments in strategic forms. By strategic forms we indicate that the company should acquire one company see how it fits into the overall grand scheme of things then acquire another one 5 to 6 months down the line as needed. Pfizer needs a new game plan and it needs one fast . With a diminishing arsenal of blockbuster drug compounds Pfizer will be left in the dust if it doesn’t perform the right actions in the coming years. Invest Wisely, and Remember “Due Diligence Creates The Best Picks In The Biotech Sector”!