Abraxis Looks Promising in Lung Cancer War (ABII)
Abraxis BioScience, Inc. (NASDAQ: ABII) is one of the top biotech gainers this morning. The company announced that its key ABRAXANE met the primary endpoint in a Phase 3 trial for advanced non-small cell lung cancer.
The company’s randomized Phase 3 clinical trial comparing ABRAXANE, the company’s protein-bound paclitaxel, along with with a Taxol injection, in combination with carboplatin met the study’s primary endpoint. ABRAXANE showed a significant improvement in overall response rate compared to Taxol alone as a first-line treatment for advanced non-small cell lung cancer patients.
The 1,052 enrolled patient study as of July 2009 was at 102 centers. The company noted that NSCLC is 85% of lung cancer diagnosis and noted that more than 200,000 are diagnosed with lung cancer each year with about 159,000 deaths per year.
The study was assessed by independent radiologist review and is the subject of a special protocol assessment with the FDA. Abraxis further noted that the design, clinical endpoints and statistical data and analysis have been previously agreed upon by the FDA. In that regard it said that the FDA agreed that the demonstration of a statistically superior response rate of the ABRAXANE and carboplatin combination over the Taxol and carboplatin combination is sufficient for the company to submit a supplemental new drug application for approval of ABRAXANE in combination with carboplatin as a first-line treatment of advanced non-small cell lung cancer.
Abraxis is surging. Shares opened at $46.45 this morning after a $39.85 close yesterday. The stock has run further and is now up almost 28% at $50.95 on the day. The problem here is that volume is very thin despite a $2 billion market cap. The 52-week high is $57.60. The company is also under-followed by Wall Street and that makes information less reliable or less covered by investors.
Today will b a near-term volume record if it continues. There has only been one day this calendar 2010 where it had 300,000 shares or more trade. In 2009, its most active day was 240,000 shares.
JON C. OGG
Savient, Gout, and FDA… Back At The Door (SVNT)
Savient Pharmaceuticals, Inc. (NASDAQ: SVNT) is from giving up on its KRYSTEXXA as a gout treatment. This morning the company announced that it has resubmitted its Biologics License Application to the FDA. This has been in the news, particularly since the company announced a secondary offering late last year after the FDA denied this in August and sent shares down 35% at the time. This one even got on the map as an old Jim Cramer favorite.
The resubmission is for KRYSTEXXA to treat chronic gout in patients refractory to conventional therapy, which is effectively in patients who have failed to normalize their levels of serum uric acid and whose signs and symptoms are inadequately controlled with xanthine oxidase inhibitors at the maximum medically appropriate dose. It also for patients where these drugs are contraindicated. The resubmission includes data from three consecutive manufacturing validation batches, additional and improved analytical methods for the control and release of pegloticase API and KRYSTEXXA and other data which are designed to address the issues cited by the FDA in its July 31, 2009 Complete Response Letter (CRL). Also included is a safety update from the remaining studies that were ongoing at the time of the previous 120-Day Safety Update.
EDAP TMS, Back on the Map (EDAP)
EDAP TMS SA (NASDAQ: EDAP) is a French company which makes medical devices for the treatment of urological diseases and the company’s stock is soaring after the company was granted marketing approval of its newly designed, high-end Sonolith I-Sys lithotripsy device by the Japanese Administration. Because this market is still under-served, we wanted to look into the news despite this not being a drug or biotech company.
The Japanese equivalent of the FDA in the US granted marketing approval of EDAP’s Sonolith I-Sys lithotripsy device. What makes this unique is that the lithotripsy market in Japan is supposed to rank as the number one market in the world in total lithotripsy sales volume and in the installed base. The company also noted that Japanese physicians have traditionally been fast adopters of products in this field.
The Sonolith I-Sys is an easy to use high-end system that the company called an effective tool to deliver benefits to both patients and physicians with integrated and robotized features. The company noted that the device successfully obtained marketing clearance by the U.S. FDA in August 2009.
Amylin & Friends Brace for Diabetes Review (AMLN, LLY, ALKS)
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) has a big event on deck this week. This Friday, March 12, is its Prescription Drug User Fee Act (PDUFA) action date for an FDA panel to issue a recommendation on Byetta as the the first once a week treatment for Type II diabetes. The date had been moved due to recent weather closures in February in and around Washington D.C.
Analysts are mixed on the stock with BMO cutting its rating last week, but there were two positive calls from Credit Suisse and Jesup & Lamont.
Options are elevated today, but not overly active. The open interest of stock options is also large enough that the $20 synthetic options straddle would imply that shares have to rise above $24.70 or drop below $15.30 to be profitable.
Byetta is already sold with Eli Lilly & Co. (NYSE: LLY), and Alkermes, Inc. (NASDAQ: ALKS) provides the technology that makes Byetta last longer in the delivery mechanism for a once per week use. Open interest in the Alkermes options is elevated but not astronomical.
There is a risk here for a potential delay on top of what has already been seen. Some feel the FDA will delay this recommendation with a request for more side effect data.
Amylin is currently believed to be the winner of ultimate once-weekly approval, even if a delay comes this week. But that notion also depends upon whom you ask. The most recent short interest data shows about 16.25 million shares (almost 12% of the float) are listed as being in the short interest. The stock is at $20.10 and the 52-week trading range is $7.89 to $20.46. That 52-week high was also hit today.
JON C. OGG
InterMune Volatility Compression (ITMN)
InterMune Inc. (NASDAQ: ITMN) has shown some very interesting options trading, and the trading looks to be a bet against all that huge volatility we have seen.
Joe Kunkle of OptionsHawk.com noted:
- ITMN with a 2,000X4,000X2,000 contract butterfly call spreads at the March $25/$30/$35 strikes. This trade bets on volatility to collapse, which will happen after the March 9th FDA meeting on it’s lung drug pirfenidone, given priority review for treating the chronic lung disease idiopathic pulmonary fibrosis, a disease impacting around 200,000 people in the US and Europe. Lazard Capital feels there is more than a 50% chance the drug gets approved, and has a $25 target for shares. However, the FDA may require post-approval studies for indications of effectiveness. It also sees shares doubling to $30 , currently trading at $15. The trade cost a debit of 50 cents, and offers profit from $25.50 to $34.50 in shares, with max profits at the $30 body strike, which offers around an 800% return. Implied volatility stands near 250% ahead of the event, and the straddle is pricing in around a 55% move in shares. Another large trade today was a buyer of 4,000 March $20 calls at the $2.55 offer. 20,996 calls and 3,348 puts have traded on the day, 8X average call volume.
It is just past noon and InterMune shares are down 4.1% at $14.70 on 975,000 shares. The 52-week range is $10.48 to $18.14 and the average stock volume is about 760,000 shares.
Just last week we saw comments from the company. Chairman and CEO Dan Welch noted, “Fourth quarter and recent events have been highlighted by the very important developments related to the regulatory progress of pirfenidone for the treatment of patients with idiopathic pulmonary fibrosis, or IPF. Our NDA for pirfenidone was granted Priority Review status on January 4, and is scheduled to be discussed at an FDA advisory committee meeting on March 9, 2010. If approved by the FDA, pirfenidone would be the first approved medicine for the approximately 100,000 Americans who suffer from this terrible disease. Regarding Europe, we currently expect to submit a Marketing Authorization Application (MAA) for pirfenidone in the European Union in the current quarter.”
JON C. OGG
Cell Therapeutics Facing Tougher FDA (CTIC)
Cell Therapeutics, Inc. (NASDAQ: CTIC) is getting clipped on Pixantrone this morning. The company was told by the FDA that there is limited clinical data on its proposed cancer drug, and that there were higher side effects and higher death incidents. Unfortunately, this comes ahead of a panel review date that is set for Wednesday, February 10, 2010. We have late April, on or about April 23, 2010, as the final decision date from the FDA for Pixantrone.
Pixantrone is the company’s pending treatment of relapsed and refractory non-Hodgkin’s lymphoma, although this is indicated for those who have seen their disease progress after having received treatment with at least two other therapies.
Cell Therapeutics had raised about $30 million in January via securities sales. Pixantrone was under FDA Fast Track and it has an Orphan Drug designation under EMEA in Europe.
The FDA noted that the main trial arm ended early due to a smaller number of enrollment, which is always a concern. This may not be a dead outcome yet, but this sets a bias of extreme caution going into Wednesday’s event.
At 9:45 AM EST we have shares down 29.4% at $0.743 on 23 million shares. Average volume is 12 million shares and the 52-week trading range is $0.05 to $2.23.
JON C. OGG
New Restless Leg Syndrome Review for XenoPort (XNPT, GSK)
XenoPort, Inc. (NASDAQ: XNPT) has a big day coming for its GSK1838262/XP13512 (gabapentin enacarbil) next week. The company has a date of February 9 for an FDA Prescription Drug User Fee Act (PDUFA) decision on its Horizant. This is the dated goal for the company’s New Drug Application for Horizant for the treatment of moderate-to-severe primary restless legs syndrome. Horizant is licensed to GlaxoSmithKline (NYSE: GSK) in the United States and several other countries.
There is one concern here… The company’s release last week noted that the GaxoSmithKline partnership may be in doubt because Glaxo has noted that it may end research on depression and pain treatments. GSK and XenoPort are discussing the next steps in the development plan for XP13512 in the neuropathic pain area and will disclose this development plan at a future date.
XenoPort shares closed up 3.4% at $19.01 Friday on 422,000 shares. Average volume is 337,000 shares, but the stock trading has been elevated over the last week.
Date Volume Close
5-Feb 422,100 $19.01
4-Feb 504,800 $18.38
3-Feb 373,200 $19.90
2-Feb 420,200 $19.99
1-Feb 216,400 $18.50
There is also a binary options event factored in here, although on far fewer options contracts than what you normally see. Here is the CALL and PUT volume for Feb-2010 expiration that expire on February 19, with data on the Friday volume and the open interest:
CALL Volume OpInt
17.50 44 1,006
20.00 167 1,995
22.50 170 1,938
PUT$ Volume OpInt
12.50 209 1,062
15.00 95 1,467
17.50 114 2,055
20.00 170 2,812
The stock did manage to close up for the week, which might be impressive considering the weak stock ticker tape action we saw this last week. It looks like the company still has $150 million or so in liquidity with revenues from partnership income looking very spotty and also looking like they are in the rear-view mirror. Analysts expect losses in 2010 and revenues of only about $63 million per Thomson Reuters consensus data.
XenoPort will be able to survive without GSK if push comes to shove. But the restless leg syndrome is not an area without controversy. Ask someone with it if they think it is real or not. Then ask one of their younger family members if they think it largely from inactivity or what the RLS patient consumes daily.
This PDUFA date may not seal the fate of XenoPort, but a very positive review will be of help. The stock has a 52-week trading range of $13.36 to $28.33 and a market cap of about $576 million.
JON C. OGG
10-Bagger Hunt Heads Back to Repros (RPRX)
Repros Therapeutics Inc. (NASDAQ: RPRX) is soaring in the quest for the next ten-bagger…. This is a micro-cap stock that had a $19.1 million market cap before this morning’s news. The company reported that it has received verbal confirmation from the FDA’s Division of Metabolic and Endocrine Drug Products. According to this, the company may initiate its Investigational New Drug Application for the study of oral Androxal as a potential treatment of hypogonadal men with Type II Diabetes with a Phase IIa trial. While the move to chase the next 1,000% potential gainer is often on hype, it is at least easy to see why traders, speculators and investors would be chasing this stock.
According to the press release, The FDA noted no clinical hold issues. It did add that the agency may have some comments on the specifics of the Phase II design. But the company also noted that doses to be tested in the Phase IIa study have been safely tested for longer durations in trials in men for the treatment of secondary hypogonadism.
Repros plans to enroll a total of 60 men into three balanced parallel arms at several clinical sites comparing placebo to two active doses. In a 200 patient study of Androxal in hypogonadal men it was noted that fasting glucose levels were reduced in a significant manner in men whose glucose levels were greater than 104 mg/dL. It was further noted that the higher the glucose level the greater the reduction.
The market is not quite open and at 9:22 AM EST we have seen a 35% gain to $1.01 on 322,000 shares. The average daily volume is 989,000 shares and the 52-week trading range is $0.64 to $10.60.
As of September 30, 2009, the balance sheet here was tiny at 2.5+ million in cash. Just keep in mind that it already announced a capital raise in October, shortly after good news.
We noted that it is at least easy to see why traders, speculators and investors would be chasing this stock. Even at $1.01 after such a large pop… Even considering its news-bump followed by a capital raise, this was a $10 stock just a year ago. This company has also been around since the early 1990’s and used to trade at significantly higher prices.
JON C. OGG
FEBRUARY 2, 2010
InterMune Volatility Bets Through the Roof (ITMN)
We noted last week that there had been some extra options activity over in InterMune, Inc. (NASDAQ: ITMN) ahead of a date-review decision. Today saw excess trading in the stock, and explosive trading volume in both the put and call options as traders made their volatility bets for a binary trading event scheduled for March 9. The stock traded over 3.4 million shares versus 683,000 shares on average. The stock closed up 5.7% at $16.50 and the 52-week trading range is $10.48 to $19.12. We do not care about the FEB-2010 options as they are before the date, but MAR-2010 options expiration date is on March 19, 2010.
CALL Volume OpInt Last
15.00 1,755 5,074 $5.40
17.50 14,991 7,596 $4.50
20.00 8,065 2,863 $3.70
22.50 2,375 158 $3.00
PUT$ Volume OpInt Last
10.00 6,610 541 $1.85
12.50 1,745 1,101 $2.70
15.00 3,521 2,136 $4.00
We’ll save on the technical jargon, but the closest speculative volatility bet being long the closest CALL and PUT effectively puts this stock having to go above $27.00 or below $5.50… The combined premiums are roughly $9.50, up almost $5.50 from when we looked ta this last week. Keep in mind that those are major price changes from what was seen last week and those spreads should compress over the coming days…. barring any real new news.
Joe Kunkle of OptionsHawk.com pointed this one out last week and gave a brief heads-up alert on this one again.
Keep in mind that there is a huge discrepancy over analyst price targets as this is a battleground stock with many bears and many bulls on both sides of the fence. To show just how active the bets are for and against this one…. it had 6.425 million shares listed in the short interest based upon the settlement date of January 15, 2010.
The company announced this morning that the FDA Pulmonary-Allergy Drugs Advisory Committee (PADAC) is scheduled to discuss the company’s New Drug Application (NDA) for pirfenidone on March 9, 2010.
This covers InterMune’s investigational drug candidate for the treatment of patients with idiopathic pulmonary fibrosis, a uniformly fatal disease that affects about 100,000 Americans. More than 30,000 new cases are diagnosed annually. The company even noted that this has a higher mortality rate than colorectal cancer, breast cancer or prostate cancer, but noted that there are currently no approved medicines to treat IPF.
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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