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Biotech Stock Roundup: Regeneron Impresses in Q4, Gilead Slumps, MacroGenics Soars

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It was a busy week for the biotech sector. Apart from earnings, regular pipeline updates and data read outs were also in the news. Key among them include – bigwig Gilead Sciences’ phase III study on liver disease drug fails while Regeneron cuts the price of its PCSK9 inhibitor to make it more affordable.

Recap of the Week’s Top Stories:

Earnings in Focus: Regeneron Pharmaceuticals REGN delivered impressive results in the fourth quarter of 2018, wherein both earnings and sales beat estimates. Ligand Pharmaceuticals LGND reported solid results for the fourth quarter and beat on both earnings and sales.

On the other hand, Seattle Genetics SGEN missed on earnings but beat on revenues. The stock was in the news as well for obtaining approval from the European Commission to expand lead drug Adcetris’ label in combination with adriamycin, vinblastine and dacarbazine in adults patients with previously untreated CD30+ stage IV classical Hodgkin lymphoma (HL)

Gilead’s Late-Stage Study on Liver Disease Candidate Fails: Shares of biotech bigwig Gilead Sciences, Inc. GILD slumped after the company announced the failure of a late-stage study on pipeline candidate, selonsertib, in patients with compensated cirrhosis (F4) due to nonalcoholic steatohepatitis (NASH).  STELLAR-4, a phase III, randomized, double-blind, placebo-controlled study (n=877) evaluated the safety and efficacy of selonsertib, which is an investigational, once-daily, oral inhibitor of apoptosis signal-regulating kinase 1 (ASK1), in patients with compensated cirrhosis due to NASH. 

However, the study did not meet the pre-specified week 48 primary endpoint of a ≥ 1-stage histologic improvement in fibrosis without worsening of NASH. Gilead is conducting an in-depth analysis of the findings and data will be submitted to an upcoming scientific conference. The company is also working with the Data Monitoring Committee and investigators to conclude the STELLAR-4 study in a manner that will be in the best interest of each patient.

The failure of the STELLAR-4 study comes as a disappointment, given the significant market potential of NASH. We note that Gilead had shifted focus to its HIV franchise and newer avenues like CAR-T therapy and NASH, given the persistent decline in its once market-leading HCV franchise.

Regeneron and Partner Sanofi Cut Praluent Price: Regeneron Pharmaceuticals and partner Sanofi announced a 60% cut in Praluent price in the United States. Praluent, a PCSK9 inhibitor, is approved for use as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease who require additional lowering of LDL-C.

Praluent will be made available at a U.S. list price of $5,850 annually effective March. The step has been taken to make the drug more accessible and affordable for appropriate patients. The drug price was lowered in 2018 as well but for health plans but the benefit did not reach the senior patients.

Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FDA Delays Incyte’s Jakafi’s Label Expansion: Incyte Corporation INCY announced that the FDA extended the review period of the supplemental New Drug Application (sNDA) for a first-in-class JAK1/JAK2 inhibitor, Jakafi, to treat patients with acute graft-versus-host disease (GVHD) who have had an inadequate response to corticosteroids. The sNDA for the treatment of patients with acute GVHD was submitted in August 2018, and the FDA granted it both Priority Review and Breakthrough Therapy designation.

However, the FDA extended the action date by three months to review additional data submitted by Incyte in response to the FDA’s information requests. The additional data has been determined by the FDA to constitute a major amendment to the sNDA. Hence, the new Prescription Drug User Fee Act (PDUFA) target action date is May 24, 2019. The news comes as a disappointment for the company, as a label expansion of the drug would have boosted sales.

MacroGenics Soared on Positive Data From Breast Cancer Trial: Shares of clinical-stage biopharmaceutical company MacroGenics, Inc. MGNX soared after the company announced positive data from SOPHIA, the phase III study on margetuximab in HER2-positive metastatic breast cancer patients. The trial met the primary endpoint of prolongation of progression-free survival (PFS) in patients treated with the combination of margetuximab plus chemotherapy compared to Herceptin plus chemotherapy.  MacroGenics intends to submit a Biologics License Application (BLA) to the FDA in the second half of 2019.

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The NASDAQ Biotechnology index lost 0.6% in the last five trading sessions. Among the major biotech stocks, Biogen lost 5.2%. Over the past six months, shares of Regeneron have rallied 13.6%, while those of Gilead have dropped 13.9% (See the last biotech stock roundup here: Biotech Stock Roundup: Celgene Tops in Q4, Gilead Disappoints, ALKS & AVEO Sink)

 

What's Next in Biotech?

Stay tuned for more earnings updates along with regular pipeline updates.

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MacroGenics, Inc. (MGNX) : Free Stock Analysis Report
 
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
 
Incyte Corporation (INCY) : Free Stock Analysis Report
 
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
Ligand Pharmaceuticals Incorporated (LGND) : Free Stock Analysis Report
 
Seattle Genetics, Inc. (SGEN) : Free Stock Analysis Report
 
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