Talking Biotech ETFs: iShares Nasdaq Biochnology to $100 (IBB, OSIP, MDVN)
Today’s price moves in the biotech sector are quite different from what we saw earlier this week. A hostile merger via tender from Astellas for OSI Pharmaceuticals Inc. (NASDAQ: OSIP) got everyone up in arms this week. So much that other investors were going back over buyout candidate notes. We also gave a list of those recently noted biotech buyout candidates this week.
But today’s news out of Medivation, Inc. (NASDAQ: MDVN) severely missing its endpoints in the Phase III targets for Dimebon as a new potential blockbuster to treat Alzheimer’s Disease has everyone reminded of the risks in betting on speculative biotech stocks with no products on the market. That has a sentiment reversal taking place, and unfortunately Dimebon has become Dime-Bag.
But before this morning’s blow-up there was an interesting call that may have more merit than just the bet against the sector. A chart analysis from OptionsZone.com on the iShares Nasdaq Biotechnology (NASDAQ: IBB) showing a potential break-out pattern on its chart. If these levels hold, the call is for the “IBB” to head to $95 to $100….
JON C. OGG
Biotech Implosion: Medivation, Alzheimer’s Beats Drug (MDVN, PFE)
Medivation, Inc. (NASDAQ: MDVN) is the next biotech implosion. The company’s highly awaited Phase III study on its Alzheimer drug called Dimebon did not meet expectations. It failed to meet primary and secondary endpoints. The problem is that this was hitting 52-week highs yesterday.
The company did note that a separate Phase 3 safety study demonstrated Dimebon’s tolerability when used alone or in combination with approved Alzheimer’s Disease medicines. Just one more problem… if it doesn’t work it doesn’t matter how tolerable it is. In some cases the placebo group even did better on the sugar pill, which is perhaps the worst endorsement a company can get.
Pfizer Inc. (NYSE: PFE) is also indicated lower this morning as well as it was Medivation’s partner on Dimebon for the Alzheimer’s treatment. Shares are indicated down about 1% on the news. Keep in mind that Pfizer has at least one other study in later stages in the fight against Alzheimer’s.
The real hit is in Medivation. Share sare down almost 70% at $12.55 on almost 5 million shares as of 8:28 AM EST. The prior 52-week trading range was $13.36 to $40.49.
Medivation had a market cap of $1.35 billion at yesterday’s closing bell. Its most recent balance sheet showed north of $200 million in cash and investments. It is now going to need every last of that cash.
This is one of those instances where everything failed to flag this. Analysts had been positive, the charts and 52-week trading range were indicating a green light being likely, and there was not a huge imbalance between puts and calls in options trading.
JON C. OGG
Pfizer Outlines New Drug R&D Pipeline (PFE, MRK, NVS, GSK)
Pfizer Inc. (NYSE: PFE) is making a pipeline presentation today, and it is meant to address a serious and potentially severe issue affecting all Big Pharma companies from Merck & Co. (NYSE: MRK) after its Schering-Plough deal all the way down to where drug companies become biotech companies: That is the billions and billions of dollars that may disappear from profits as key drug patents expire in the coming years. This is also affecting Roche and companies like Novartis AG (NYSE: NVS) and GlaxoSmithKline plc (NYSE: GSK) on an international basis, which is why you have seen them make their own partnerships and acquisitions where possible.
Pfizer is giving a pipeline update showing its own efforts to address a whole new class of potential blockbuster drugs in the years ahead. Today’s pipeline update from Pfizer is the first real update since the company close the acquisition of Wyeth back in October, 2009.
The new development pipeline has potential drugs from both legacy companies. Pfizer is noting that this includes 133 programs from phase 1 studies through pipeline candidates in the registration process.
Pfizer is also noting that it has identified its six “Invest to Win” areas of research where there exist significant opportunities for innovation and market leadership. The new pipeline demonstrates focused investment in these areas of significant unmet medical need as well as growth in the critical technologies of vaccines and biologics. The six arena are as follows:
- oncology;
- pain;
- inflammation;
- Alzheimer’s disease;
- psychoses;
- and diabetes.
The combined Pfizer-Wyeth pipeline had 600 projects ranging from discovery through registration, and the new portfolio is roughly 500 projects. Pfizer’s goal is to become a top-tier biotherapeutics company by 2015, meaning effectively that it wants to take over some of the dominance currently held in several areas by pure-play biotech companies. Its pipeline now includes a total of 6 vaccines and 27 biologics in development.
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Biogen Idec Invests In Alzheimer’s Disease (BIIB)
It seems that Biogen Idec Inc. (NASDAQ: BIIB) is investing further into Alzheimer’s Disease. A company called Probiodrug AG, a biotech with a particular focus on Alzheimer’s disease, announced on Monday that it had successfully closed a Series B financing round. The total round came to above 36 million Euros or more than $52 million today. This group had previously raised around $52 million before this current round.
Biogen Idec New Ventures unit joined BB Biotech and Edmond de Rothschild Investment Partners, as well as LSP Life Science Partners. Support also came from all existing institutional shareholders – IBG Fonds, TVM Capital, HBM BioVentures, CFH Group as well as private investors.
Rossella Medori from Biogen Idec New Ventures will join other appointees from the financing round with observer seats. BB BIOTECH is listed in Switzerland, in Germany and in Italy.
This is not Biogen’s first entry into Alzheimer’s Disease. In 2007, Biogen Idec announced an alliance with Neurimmune Therapeutics to develop novel, fully human antibodies for the treatment of Alzheimer’s disease. But the current pipeline listed on the company’s website has nothing solid for Alzheimer’s Disease that is directly owned by the company.
This is a very small deal when you consider Biogen Idec’s $12.5 billion market cap and considering its expected revenues of almost $4.4 billion for its Fiscal-2009. But this is one step among dozens that biotech companies use for establishing pipeline candidates or partnership opportunities for the future.
JON C. OGG
Prana Scores Alzheimer's Disease US Patent Protection (PRAN)
Prana Biotechnology (Nasdaq:PRAN) has received a key patent that will allow it to have more protection for its Alzheimer’s candidate. The company said it received a Notice of Allowance from the United States Patent and Trade Mark Office (USPTO) over its clinical asset, PBT2, in the USA.
The patent is titled ‘8-Hydroxyquinoline derivatives’ and it covers the composition of matter of selected families of 8-Hydroxyquinoline compounds. Prana noted that this includes PBT2 and the pharmaceutical compositions containing these compounds.
The company said that the USA patent is expected to formally proceed to Grant by December 2009, after the payment of official fees. Prana noted that it has also secured the Grant of related patents in Russia, Singapore, South Africa, New Zealand and has a Notice of Acceptance in Australia. Previously, Prana has announced receiving a notice of Decision to Grant in Europe. Each patent has a twenty year term expiring on July 16, 2023. It noted that extensions of the expiration are possible under the legal provisions of some of these countries, which it noted includes the United States and Europe.
PBT2 is Prana’s lead Alzheimer’s Disease drug, and the company noted that it has the aim for this to become the first disease modifying drug for the treatment of Alzheimer’s Disease.
Prana further noted that its PBT2 has already completed a Phase IIa study in early Alzheimer’s Disease patients, and further noted that it has demonstrated safety and tolerability. On the efficacy, Prana noted that PBT2 showed improvement in executive function as an important aspect of cognitive performance. It was also said to have reduced the levels of Abeta in the spinal fluid of patients, which has been linked as one of the key proteins associated with Alzheimer’s Disease. Prana noted that these trial results were published earlier in The Lancet Neurology journal as well as presented at this year’s International Conference on Alzheimer’s Disease.
The hope is to prevent the formation of toxic forms of the Abeta protein and to restore metal homeostasis in the synapses of the aged brain for improved neurotransmission and cognition.
The Australian company was incorporated in 1997. It first listed on the Australian Stock Exchange in March 2000 and then later listed on NASDAQ in 2002. We have seen a rise of 10% on the news to $1.85 on the day and the 35,000 shares in an average daily volume has already been reached and then some.
JON C. OGG
AUGUST 12, 2009
Wyeth & Elan: More Questions in Alzheimer's Study Results (WYE, ELN)
Today was the long awaited Alzheimer’s drug data presented from Elan Corporation, plc (NYSE: ELN) and Wyeth (NYSE: WYE). The companies presented detailed results from their 18-month Phase II study of bapineuzumab in patients with mild to moderate Alzheimer’s disease.
The study was on 234 randomized with findings reported on 229 patients, and efficacy was measured from a baseline of 78 weeks. The data looked very positive on the surface with safety and efficacy results supporting the design of an ongoing global Phase III program.
Some data is mixed and shares were hit as a result. It showed statistically significant and clinically meaningful effects were observed in multiple endpoints in ApoE4 non-carriers. The company also noted that pre-specified efficacy analysis did not reach significance in the total population.
Favorable directional changes were seen in some endpoints in ApoE4 carriers, warranting further study. The post-hoc anlysis showed statistically significant and clinically meaningful benefits in important subgroups.
You can read about the full results here. There were measurements of less or slower brain shrinkage combined with better memory test results observed in the study, and if our data is correct that would be superior to any existing treatments and is probably above other study reports to date.
The problem is the pre-specified efficacy analysis as well as a few deaths in the trial (which were noted as “unbelieved to be from the drug” despite no deaths in teh placebo group.
This data was shown at the Alzheimer’s Association’s International Conference on Alzheimer’s Disease 2008 in Chicago, Illinois.
Shares are getting slapped down in after-hours. Wyeth stock is down 8.5% at $41.25 and Elan stock is down 15% at $28.49 in after-hours trading. Both stocks had been higher initially ahead of the data. This looks more and more like mixed data, and unfortunately it looks like Alzheimer’s patients have a long way to go before even any meaningful help will arrive.
Jon C. Ogg
July 29, 2008 (5:45 PM EST)
Small Alzheimer's Play Draws Attention After Others Failed
You have probably noticed the recent failure of some once-promising Alzheimer’s Disease treatments. Mryiad Genetics (NASDAQ: MYGN) saw a huge disappointment over this recently.
A small Autralian biotech called Prana Biotechnology Ltd. (NASDAQ: PRAN) is out making the rounds showing how its Alzheimer’s treatment is showing promise.
Today it announced the publication of key research findings with its lead Alzheimer’s Disease drug, PBT2, in an article titled “Rapid restoration of cognition in Alzheimer’s transgenic mice with 8-hydroxyquinoline analogs is associated with decreased interstitial Abeta” in the current edition of the scientific journal Neuron. Its key features are:
- PBT2 profoundly and rapidly improved cognition in transgenic mice.
- PBT2 prevented the formation of soluble Abeta oligomers, the form of Abeta believed to be the most toxic.
- PBT2 substantially reduced the amount of all forms of Abeta in the transgenic mouse brain, over a nine week period.
- PBT2, within hours of oral administration, significantly lowered soluble (interstitial) Abeta in the brain, sampled using in vivo microdialysis.
- Using a well established model for memory formation, PBT2 protected neurons in living brain tissue from the toxic effects of Abeta which impairs the signaling between neurons in Alzheimer’s disease.
The company also noted yesterday that its co-founding scientist recently addressed the U.S. Senate Special Committee on Aging.
This alone isn’t really a stock event in and of itself. But it does still leave some underlying and residual value in Prana as long as its data doesn’t take a nose dive. Its shares are very thin volume in the U.S> and today’s level is $3.63.
Its 52-week trading range is $2.06 to $6.73. Its market cap is listed as $65.9 million, but we would caution that it raised $7 million via a private placement in may to fund its research programs. At that time shares were north of $4.00.
It’s going to take quite a bit longer to know just how well these ongoing research programs develop in the quest to beat or even tame Alzheimer’s. Any drug that makes it to market that can make any impact has a mega-blockbuster potential.
Jon Ogg
July 9, 2008
Disappointment on the Alzheimer's War (MYGN)
Myriad Genetics (NASDAQ: MYGN) is seeing pressure in shares this Monday morning. Shares are down nearly 10% around $43.30 in pre-market trading after the company announced that it plans to discontinue the development of Alzheimer treatment Flurizan. The company had reported that its late-stage trial failed to meet endpoints.
The company had also spent some $60 million in the fiscal year (June) in its development of Flurizan. The company also expects to spend roughly another $8 million to wrap up the program.
Its overseas partner in Denmark was H. Lundbeck A/S (HLUKY), and it also saw a similar drop in active trading.
Myriad isn’t a one-hit wonder as its quarterly revenues were $61.7 million last quarter. But this was a blow and the Alzheimer’s franchise here could have led to a blockbuster potential for the company. As of last quarter, the company had over $300 million between its cash and equivalents and its long-term investments; while its total liabilities were $37.66 million. Unfortunately, its market cap was over $2.1 Billion before today’s price action and its 52-week trading range is $34.35 to $59.18.
Jon C. Ogg
June 30, 2008
