I remember I found the piece somewhere in a Yahoo Finance site but I cannot remember which site. I don't subscribe to TheStreet.com.
A group which includes an author at UCI, where Regulus' CMO received education, identified HCV mutants that can evade XRN2 without miR-122. There might be another molecule that can protect these mutants from degradation. This has to be less efficient than miR-122 in protection because otherwise those mutants would be the most prevalent. These mutants may easily succumb to polymerase inhibitors. Anyway, they can now go after the best oral DAAs against these identified mutants in combining with RG-101.
[[ ... HCV infection requires miR-122, which is expressed only in liver cells, and thus is one reason that replication of this virus occurs efficiently only in cells of hepatic origin. To understand how HCV genetics impact miR-122 usage, we knocked out miR-122 using clustered regularly interspaced short palindromic repeat (CRISPR) technology and adapted virus to replicate in the presence of noncognate miR-122 RNAs. In doing so, we identified viral mutations that allow replication in the complete absence of miR-122. This work provides new insights into how HCV genetics influence miR-122 requirements and proves that replication can occur without this miRNA, which has broad implications for how HCV tropism is maintained.]]
[[... Celgene stock looks underpriced. At 17.6 times this year’s earnings forecast, the biotechnology company trades almost exactly in line with the Standard & Poor’s 500 index of big U.S. companies. But earnings for the index are tracking below levels from two years ago, while those for Celgene are up about 50%. And after this year, Celgene’s (ticker: CELG) earnings per share are likely to more than double by 2020. It’s a faster grower than Bristol-Myers Squibb (BMY), which trades at 28 times this year’s earnings forecast.
CELGENE RECKONS that its hematology portfolio, including Revlimid, Pomalyst for more advanced multiple-myeloma cases, and two other small contributors, will bring in $14.8 billion in revenue by 2020, up from an estimated $8.7 billion this year. It forecasts total company revenue of more than $21 billion by then, and earnings per share exceeding $13. ... ]]
Applying a P/E multiple of 35 to an annual earnings of $13 or more, I get a share price of 455 or more in 4 years.
Yesterday's issue of Science has a special section on RNA. Its subsection mentions ALN-TTR02 and TTRsc.
[[... Advances in siRNA formulation allow efficient delivery to the liver (26). The utility of siRNA-mediated silencing of transthyretin (TTR) mRNA in the liver of patients with familial TTR amyloidosis (31, 32) is being studied in two separate phase 3 clinical trials. The first trial uses a siRNA formulated with lipid nanoparticle technology (ALN-TTR02) and intravenous administration to attempt to improve neuropathy in patients. This is the therapeutic siRNA that is closest to potential approval. In contrast, the second trial uses a TTR-targeted siRNA (ALN-TTRSC) that is formulated with N-acetylgalactosamine (GalNAc) to facilitate uptake by and release into the cytoplasm of hepatocytes, as well as to allow for subcutaneous administration (Fig. 2 and table S1). Many other receptor-targeting agents are being evaluated preclinically to determine whether siRNA can be selectively and effectively delivered to the cytoplasm of other cell types in other tissues.
Jun 17, 2016 | 10:22 EDT
[[Piper Jaffray analyst Edward Tenthoff noted that the U.K.'s National Institute for Health and Care Excellence, or NICE, has announced its intent not to cover Orkambi, but he views the guidance as "simply the latest phase" of the negotiation for reimbursement coverage. The analyst added that if the board's final guidance, potentially in July, is still negative, it will have no impact to his 2016 estimates for Vertex, which do not include U.K. sales. The firm keeps an Overweight rating and $131 price target on Vertex shares.]]
There appears to be awful misunderstandings by Dirk H. I want to clarify.
One patient who had the liver reaction was also taking Soliris. He or she was taking steroid and cyclosporine because soliris failed to maintain a low LDH level and the breakthrough occurred (patient 0083), who was pretty sick; both drugs affect the liver and the person also had viral gastroenteritis about when there was a spike in the liver enzymes. He was taken off all of the drugs (except for soliris) and the enzymes returned to normal. Remember because of the durability of ESC-GalNAc, the effect of ALN-CC5 persisted long after he stopped taking the drug so that liver enzymes returned to normal while C5 levels continued to be suppressed by CC5.
Only two analysts on the conference call asked about the AE, and they seemed satisfied with the answer. Over all you can tell the analysts were intrigued but aren't sure about the commercial value of ALN-CC5 (i.e. will they try to undercut soliris on price).
Maraganore was talking about a quarterly dose of CC5 coupled to monthly (instead of bi-weekly) doses of soliris at 600 mg (instead of 900 mg biweekly). That would certainly save money depending on the price of CC5. You can do a quick calculation and figure that such dosing might save 2/3 of cost of soliris and then maybe CC5 could be priced at 1/3 of soliris so that there would be a 1/3 savings.
[[ ... If the drug gets accelerated approval, the stock could trade at $50 or $60 or even higher. If the drug is rejected, the stock could fall to $10 or lower. At the current stock price, Wall Street still appears to be putting a less than 50/50 chance of approval. That view seems too pessimistic. Our view is that the odds are better than 50/50. ...]]
[[ ... One reason for optimism on eteplirsen today is this: If the FDA were going to reject eteplirsen and essentially tell the company to come back in two years with more complete data from an ongoing Phase 3 confirmatory trial, the agency could have done so by the deadline. It has been reviewing the drug for months. Street analysts generally have been expecting outright rejection of the drug.
The delay suggests that something is going on behind the scenes between the company and the FDA. ]]
[[... If the drug gets accelerated approval, the stock could trade at $50 or $60 or even higher. If the drug is rejected, the stock could fall to $10 or lower. At the current stock price, Wall Street still appears to be putting a less than 50/50 chance of approval. That view seems too pessimistic. Our view is that the odds are better than 50/50....]]
The author is very bullish with Regeneron. He thinks that it will reach 500 next year and has the annual growth rate of 35% beyond. $REGN composes 7% of IBB. It will lift IBB this week and Vertex has to follow IBB. Shorted shares will be toxic to your account. Cover them.
There’s a gaping difference between GAAP and non-GAAP earnings per share, which totaled $12.07 last year. It will probably narrow a bit in coming years as the profit base grows. By 2020, analysts reckon that GAAP earnings will reach close to $22 a share and adjusted ones, about $30. ]]
If you use the non-GAAP earnings of 30 by 2020, and the annual growth rate of 35% (P/E = 35), then 30X35 = 1050. So in 4 years $REGN could go above $1000 per share.
Regulus' RG-101 lost value when it could not achieve a 100% SVR together with Olysio. But ABBV and MRK would be watching carefully how the final data would come out this quarter. Their hep C drugs can incorporate RG-101 and improve their market shares which are dismal right now. ABBV (Abbott) has built considerable expertise in hep C in collaboration with Enanta. If 101 is safe and achieves near 100% SVRs with Harvoni, ABBV's 5 different-pill-a-day regimen can be simplified to a triple or double regimen with a shorter duration by incorporating 101. The value of 101 will be nearly equal to the cost savings from unused oral drugs, which are very expensive.
Its value will be recognized by the market. Do not sell with a loss.
Sanofi is open to acquisitions in the market for rare disease treatments in a sign of confidence that the high prices commanded by so-called orphan drugs are sustainable.
David Meeker, head of Sanofi’s Genzyme specialty care business, said rare disease assets were among the French group’s potential targets as it hunted growth. Acquisitions were possible “up to the size of Genzyme”, which Sanofi bought for $20bn in 2011, he added.
Mr Meeker would not be drawn on the identity of potential targets. There are numerous small and midsized drug developers focused on rare diseases, mostly in the US, and their valuations have fallen since a bull run in the sector ended last summer.
This has fuelled expectations that big pharmaceuticals groups could go bargain-hunting, but Mr Meeker insisted Sanofi would remain disciplined. “Valuations have come down but from high levels,” he said. “There is a certain resetting of valuations. .......... From Financial Times
Gilead's Harvoni, JJ's Olysio, and BMY's Daklinza are oral direct-acting antivirals (DAAs). These DAAs inhibit viral RNA replication. In addition to that they play another important role. HCV RNA subverts host immune response against them. DAAs act to undermine the viral subversion. These roles played by the DAAs are independent from the role played by RG-101. RG-101 inactivates miRNA122 for a while. miR122 is a host factor which protects the HCV RNA from degradation by a host ribonuclease xrn2. To repeat, RG-101 acts on a host molecule while DAAs act on the virus itself. RG-101 does not act directly on the virus and DAAs do not act on miR122 or on xrn2.
If this is the case, the actions of the two would be additive. DAAs bring down the viral load by 4~5 log in a week, and a single 2mg RG-101 knocks out by 4 log (only on viral particle survives out of 10,000). Because the effects of the two are additive, when they are given together, the result is that 8~9 log reduction in the viral load. Two shots of 101 and 4 weeks of a DAA might be overkill.
At the earnings conference call, Feb. 2, Gilead's CEO said the following.(Check the transcript)
[[ ... Obviously, we are looking heavily at NASH with the FXR agonist. We are very interested in liver diseases, so that's a very important area for us. And we will continue to try to bolster those to make sure that the Company has the assets necessary to have the progress for the future.]]
Estimated Primary Completion Date: February 2016 (Final data collection date for FEV1)
[Official Title:] A Phase 3, Randomized, Double Blind, Placebo Controlled, Parallel Group Study to Evaluate the Efficacy and Safety of VX-661 in Combination With Ivacaftor in Subjects Aged 12 Years and Older With Cystic Fibrosis, Homozygous for the F508del CFTR Mutation
Estimated Primary Completion Date: May 2016 (Final data collection date for primary outcome measure)
[Official Title:] A Phase 3, Randomized, Double-Blind, Placebo-Controlled, Crossover Study to Evaluate the Efficacy and Safety of Ivacaftor and VX-661 in Combination With Ivacaftor in Subjects Aged 12 Years and Older With Cystic Fibrosis, Heterozygous for the F508del-CFTR Mutation, and a Second Allele With a CFTR Mutation Predicted to Have Residual Function
The second study above is a 300 participant trial for VX-661 + Kalydeco to treat people with residual function mutation in one allele and 508del allele on the other. I am predicting an absolute change of FEV1 at an increase of 8-9 %. I am guessing that the protocol is similar to that of the study for which the FDA sent a CRL.
VRTX had the Kalydeco sales guidance for 2016 at $670-$690M worldwide which is only $50M more than 2015, representing only about 200 additional patients. This suggests that expansion to the residual function mutations (there are 3000 ww) was not expected to have a significant impact on revenue this year. There are 200 Kalydeco-responsive patients who are coming off from the 661/Kalydeco trial alone.