Huge effort has gone into fighting rare diseases the past few years, but this week’s biotech news revolved around more common maladies. Drugs to lower cholesterol, treat Alzheimer’s, and depression were in the news.
Catch up on what you may have missed below.
A Hedge Fund Investor Makes a Mint in Alzheimer’s IPO
Alzheimer’s disease has been a wasteland for pharmaceutical R&D for many years. But that didn’t deter biotech investors this week. Axovant Sciences raised $315 million in its IPO to develop an Alzheimer’s drug that it in-licensed not long ago from GlaxoSmithKline for a mere $5 million. The new Alzheimer’s drug developer is led by Vivek Ramaswamy, a 29-year-old former hedge fund investor. It's an unusual background in an industry where top executives tend to be older, have more experience in drug development, and usually have advanced medical or scientific degrees. The company has a Bermuda address, a place known more for tax advantages than its thriving biotech cluster. While big drug companies have been known to discard drug candidates that turned out to be valuable--GSK itself gave up on the compound that became the hit erectile dysfunction drug Cialis--the skepticism about Axovant's value was all over the web this week. The Axovant IPO renewed some people’s concerns about a biotech investing bubble. Questions were raised by Adam Feuerstein at TheStreet.com, John Carroll at FierceBiotech, and Andrew Pollack at The New York Times. Stock in Axovant surged on the IPO, but dropped about 20 percent on Friday after the flurry of skeptical reports.
Slowly but Surely, Antibiotics Coming Back
New Haven, Conn.-based Melinta Therapeutics, a private company formerly known as Rib-X Pharmaceuticals, raised $67 million this week to advance its experimental antibiotic programs. That news came two days after Merck & Co. and other investors put $30 million into an antibiotic startup in Cambridge, Mass.-based Spero Therapeutics. After years of declining investment in antibiotics because of regulatory challenges and low prices, small companies have been encouraged by various incentives to get back into this important line of work for public health. For more on the revival of antibiotic R&D, see this analysis that I published for subscribers of Timmerman Report in March.
Encouraging, but Preliminary, Data for Post-Partum Depression
Cambridge, Mass.-based Sage Therapeutics released some striking data this week from a study of women with post-partum depression, a condition that affects an estimated one-fifth of women after childbirth. There were only four patients in the study, and no control group, so the results are far from conclusive. But the company reported that patients entered the study with average depression scores of 26.5 on the Hamilton Rating Scale for Depression, and within 60 hours, their scores had plummeted to 1.8. Normally, a score of 24 and above puts a patient in severe depression territory, and patients have to score 7 or above to be considered depressed at all. Despite all the caveats that come from a small study, the magnitude and speed of that effect were startling. Sage stock climbed 15 percent on the news. See Matthew Herper’s coverage in Forbes.
No News is Good News if You’re Selling Diabetes Drugs
Merck & Co. released long-awaited results at the American Diabetes Association meeting from a study called TECOS, which looked at the long-term cardiovascular risks for 14,671 patients taking either its diabetes drug sitagliptin (Januvia), or a placebo. This is Merck’s best-selling product, a $6 billion dollar a year blockbuster. In a competitive field with other treatment options for this chronic disease, any sign of increased risk of heart attack or stroke could have been devastating. To the relief of the company, and patients, no increased risk was observed in the big study. See the New England Journal of Medicine for more.
New Cholesterol-Lowering Drugs Pass Scrutiny
Two important cholesterol-lowering drugs came under scrutiny this week from an expert panel convened by the FDA. Sanofi and Regeneron Pharmaceuticals went first with their PCSK9 inhibitor called alirocumab (Praluent) and won a 13-3 recommendation that the drug be approved. Amgen’s drug that goes after the same molecular target, evolocumab (Repatha), won an 11-4 recommendation a day later. The drugs have shown a remarkable ability to reduce LDL cholesterol even lower than the effective class of statins, but given how good (and cheap) statins are, there was much discussion over how widely the new (i.e. expensive) drugs should be prescribed, especially when the jury is still out on their long-term ability to improve outcomes through reducing heart attack and stroke. Most analysts expect the FDA to follow the panel recommendations and formally approve both drugs for sale this summer. Payers are already bracing themselves for sticker shock. The WSJ cited one estimate that the new drugs will cost the U.S. healthcare system as much as $23 billion a year.
The Genomics Battle That Wasn’t
BGI, the Chinese giant in genome sequencing that owns Mountain View, Calif.-based Complete Genomics, unveiled an ambitious offering called Revolocity, which aims to sequence whole genomes at large factory scale. Some investors in Illumina, the San Diego-based market leader in DNA sequencing, were worried that this might pose a competitive threat but the concerns were mostly allayed. Illumina stock climbed after many investors interpreted BGI’s unveiling a non-event. “We did not think [Revolocity] warranted any significant investor attention and after this weekend's product details we think that view is vindicated,” UBS analyst Jonathan Groberg said in a note to clients. See coverage from Bio-IT World, and by Keith Robison at the Omics!Omics! blog.
What Is Free Speech in the Drug Industry?
Amarin, a small drugmaker in Bedminster, NJ with a fish-oil derived drug for heart disease, did a provocative thing recently when it filed a lawsuit against the FDA saying that it has a First Amendment to promote its product for uses that aren’t approved by the agency. This week, FDA official Janet Woodcock took much of the steam out of the case by saying the company never asked the agency for its views before filing the lawsuit and that the agency “does not have concerns with much of the information you proposed to communicate.” For more on the case and its implications, see Ed Silverman’s report at the WSJ’s Pharmalot blog.
Drugmakers Struggle to Talk Straight About Failure
No one should be surprised that company press releases are one-sided. Companies naturally try to hide their dirty laundry. But what about spin that borders on outright falsehood, or outright falsehoods? Biotech companies regularly appear to sweep unpleasant, and highly relevant, facts under the rug when communicating why regulators turn down their new drug applications, according to an FDA analysis published this week in the British Medical Journal. The FDA looked at 61 cases from 2008 to 2013 in which it issued confidential letters stating why it declined to approve a new drug. It then compared those private letters with the public statements companies made about them. These two things often don’t match. See Matthew Herper’s story on Forbes for more.
The conclusion isn't a new one, but the BMJ study is a must-read for any investor who’s new to biotech and pharmaceutical stocks. It may even renew some calls for the FDA to make these so-called “complete response” letters open to public inspection.
