Biotech Stock Roundup: EU News Boosts Biogen, Gilead & Celgene

It was a good week for biotech stocks with several companies faring well and Biogen (BIIB) emerging as a big winner. Most of the share gains were based on important news flowing in from the EU on Friday.

Biogen Jumps on Tecfidera EU Update: The biggest gainer last week was Biogen. On Friday, Biogen received a huge boost with its oral multiple sclerosis (MS) treatment, Tecfidera, gaining new active substance (:NAS) designation in the EU. Shares jumped 13.15% on the news and hit a 52-week high of $289.97 that day. The NAS designation is very important for Biogen as the company had delayed the EU launch of Tecfidera until it gained stronger patent protection.

NAS designation basically means that Tecfidera will have 10 years of regulatory exclusivity in the EU. So Biogen can now launch Tecfidera in the EU (once approved) without worrying about generic competition entering the market in the near future. EU approval should come shortly – the CHMP has already given a positive opinion.

Tecfidera is the hottest new entrant in the U.S. multiple sclerosis market. The product, launched in early Apr 2013, is already off to a strong start in the U.S. bringing in sales of $478 million and is the leading oral multiple sclerosis therapy in the U.S. (according to IMS). Given the strong U.S. launch, it’s reasonable to expect a similar launch trajectory in the EU. Not surprisingly, Tecfidera estimates are rising and the product is set to bring in multi-billion dollar sales for Biogen over the next few years.

Gilead Hits 52-Week High on CHMP Opinion: Gilead (GILD) was at the receiving end of some positive news with the CHMP giving a favorable opinion regarding the approval of the company’s hepatitis C virus (:HCV) candidate, Sovaldi. Importantly, the recommendation is in favor of a wide label which increases the commercial potential of the candidate, once launched.

The vote came ahead of expectations -- Gilead shares were up 3.7% and reached a 52-week high of $75.21 on Friday. Meanwhile, it should be smooth sailing for Sovaldi in the U.S. as well where it has already received a positive opinion. Expectations are high for FDA approval early next month. The commercial potential for Sovaldi is huge – there is major unmet need in the HCV market and several patients have postponed treatment as they wait for new and improved options like Sovaldi to enter the market. Sovaldi has multi-billion dollar sales potential.

Last week, Gilead also gained EU approval for HIV drug, Vitekta. However, the regulatory path has not been as smooth in the U.S. where the FDA refused to grant approval earlier this year.

Celgene Also Hits 52-Week High: Another biotech major, Celgene (CELG), hit a 52-week high last week, once again on news from the EU. Celgene’s oncology treatment, Abraxane, which is already approved for a wide range of indications, received a favorable opinion from the CHMP for pancreatic cancer. Shares were up about 3% and Celgene hit a 52-week high of $164.00 on Friday.

Is BioMarin the Next Acquisition Target? With BioMarin’s (BMRN) Vimzin coming a step closer to gaining FDA approval, rumors regarding the company being an acquisition target surfaced again. Last week, Vimzin, which is under regulatory review for the treatment of patients with the lysosomal storage disorder Morquio A syndrome, was backed by the FDA’s advisory panel.

Given BioMarin’s promising orphan drug portfolio, the company is viewed an attractive acquisition target. Some of the names being tossed around as potential bidders include Roche, Glaxo, Pfizer and Sanofi. However, valuation could be an issue and it remains to be seen whether any of these companies will be willing to shell out a huge premium. BioMarin shares gained 6.2% during the latter half of last week and expectations remain high for Vimzin’s approval.

Company	Last Week	Last 6 Months
AMGN	-1.70%	9.06%
BIIB	16.50%	22.55%
GILD	6.27%	32.79%
CELG	8.09%	18.43%
REGN	4.89%	11.91%
ALXN	-1.03%	22.09%
^BTK	2.79%	15.24%

Other Developments:

Amgen Gets Nexavar Label Expanded: Amgen (AMGN) and partner Bayer scored a new indication for oncology drug, Nexavar. Nexavar, which was previously approved for liver and kidney cancer, can now be used for thyroid cancer as well. The news came out after market close on Friday.

Regeneron RA Drug Hits Study Goals: Regeneron (REGN) and partner Sanofi’s experimental rheumatoid arthritis (:RA) drug, sarilumab fared well in a phase III study. Results from the SARIL-RA-MOBILITY study showed that patients treated with sarilumab+MTX experienced an improvement in disease signs and symptoms and physical function along with inhibited progression of joint damage.

Regeneron also gained approval in Japan for the use of Eylea in macular edema following central retinal vein occlusion (:CRVO).

A Glimmer of Hope for Ariad: Ariad, which has been struggling of late due to negative updates on its sole marketed product, Iclusig, has something to cheer about with EU regulators saying that Iclusig can remain on the market. Of course, tough restrictions will be imposed for continued marketing of the product. This scenario is quite different from the situation at home where the company had to temporarily suspend marketing of the product. Shares were up 35.7% on the EU update.

Vertex Investors Applaud Incivo Monetization: Investors reacted favorably to Vertex Pharma’s monetization of Incivo royalties, sending the shares up 4.4%. The company sold its product royalty rights to its hepatitis C virus (:HCV) treatment, Incivo, to partner Janssen. The $152 million cash inflow should come in handy for Vertex Pharma’s cystic fibrosis pipeline development efforts.

Amarin Shares Slide on FDA Refusal to Accept Appeal: Amarin’s shares lost 10% with the FDA refusing to accept the company’s appeal for a review of the agency’s rescission of a special protocol assessment (SPA) agreement. The SPA agreement was for the ANCHOR study supporting a supplemental new drug application (sNDA) for Zavesca. The FDA will deliver a decision by Dec 20 and as things stand, chances of approval for the additional indication look low. Amarin will most likely have to provide cardiovascular outcomes data so that its cholesterol management drug can be used in a broader patient population.

The Week So Far:

Orexigen’s Heavyweight LIGHT Data: Orexigen shares have gained more than 10% so far this week on positive interim data on Contrave (obesity candidate) from the Light Study. Orexigen could well be on the path to FDA approval for Contrave by Jun 2014.

Cubist Surges on Study Data: Shares of Cubist (CBST) jumped 8% earlier this week with the company reporting promising phase III data on its experimental antibiotic - ceftolozane/tazobactam for complicated urinary tract infections.

Merrimack Shoots Up on Phase II Data: Merrimack shares gained 11.46% on encouraging phase II data on its experimental breast cancer drug MM-121. The company also announced a nanotechnology deal with Actavis.

What Next?

With the market closed tomorrow for Thanksgiving, we do not expect much news flow over the rest of the week.

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