Sunday, February 2, 2014

Portola Pharmaceuticals Inc's Anticoagulant Gamechangers

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In a few years, Portola Pharmaceuticals (NASDAQ: PTLA  ) might be selling a leading thrombosis prophylactic, as well as a much needed antidote for the medication. In an effort to bring its antidote to the market quickly, the company may also benefit Bristol-Myers Squibb (NYSE: BMY  ) ,Pfizer (NYSE: PFE  ) , Bayer AG, and Johnson & Johnson. Lets take a look at the company's experimental drugs and see how this scenario could play out.
A simpler anticoagulant
Portola Pharmaceuticals may soon turn the world of blood thinners on its head. Less than a year after its IPO, the company has an oral once-daily inhibitor of Factor Xa, named betrixaban, in a pivotal Phase 3 trial for the prevention of blood clots known as venous thromboembolisms (VBTs).
After various types of surgery, patients are typically given enoxaparin as an injection in a hospital setting. The drug itself is safe, but keeping it at an effective level in the bloodstream is difficult. Due to this difficulty, the therapy is typically stopped when they're sent home. Far too often, patients then develop blood clots that pose serious health risks and require rehospitalization.
Betrixaban is a pill that can be taken once daily to continue prevention of VBTs without extensive monitoring. So far, it appears to maintain effective levels in the bloodstream without going overboard. Payers often penalize hospitals if patients are rehospitalized shortly after their discharge. If approved, betrixaban is likely to be very widely prescribed, saving health care providers a bundle.
Inhibition on... inhibition off
Trying to prevent blood clots can create as many problems as it solves. Patients are often treated with Factor Xa inhibitors, like betrixaban, suffer uncontrolled bleeding episodes or require emergency surgery. In either case, the ability to switch off the inhibition of clotting factors can save a life. Unfortunately, physicians do not have an effective switch, but Portola is developing the first.
Portola's most groundbreaking candidate is andexanet alfa, a recombinant protein designed to reverse the anticoagulant activity of Factor Xa inhibitors. Last May, this therapy became the first to...

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Saturday, February 1, 2014

How Sangamo BioSciences, Inc. Is Partnering to Success

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Several years ago, Sangamo BioSciences (NASDAQ:SGMO  ) made a big splash when it began clinical testing for its novel HIV therapy. Results so far have been promising, but this therapy is still in mid-stage development. Luckily, Sangamo's proprietary discovery platform has since attracted attention and licensing deals from the likes of Shire(NASDAQ: SHPG  ) and more recently Biogen Idec(NASDAQ: BIIB  ) . Lets take a closer look at these partnerships and see if they can eventually allow Sangamo to advance its own pipeline.
Curing chronic blood disorders
When it comes to outcome-based medicine, Sangamo has a platform that should have a large market opportunity. The company owns a gene-editing technology based on zinc-finger proteins (ZFPs.) The fingertips can be engineered to bind a specific sequence of DNA. The company insists that it can permanently switch the expression of any gene on or off.
The whole idea sounds a little too good to be true, but innovative powerhouse Biogen has been convinced to the tune of a $20 million upfront payment. The companies recently announced a partnership to develop beta-thalassemia and sickle cell therapies. The basic terms of the deal leave Sangamo responsible for research and development activities until it can be proved to work in humans. Biogen Idec would take the reigns at that point, providing Sangamo with milestone payments up to $300 million and...

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Friday, January 31, 2014

What to Look for When Pfizer Inc. Reports Earnings

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Pfizer's  (NYSE: PFE  )  earnings call is coming up on Tuesday, January 28, just after the market opens. Losses from generic competition, an ongoing organizational overhaul, and string of recent downgrades will make this one of the most listened to calls of the season. With this much attention, there is likely to be a great deal of noise immediately following the call, but here are a a few critical points to help you focus on the essentials.
Unloading generics
Halfway through last year, Pfizer discussed the separation of its commercial operations into three distinct units. Two units for patent protected brands and one for generics. According to Reuters, Valeant Pharmaceuticals (NYSE: VRX  ) , Mylan Inc (NASDAQ: MYL  ) , andActavis (NYSE: ACT  ) , are all interested, but there's a small problem -- they probably can't afford it.
VRX Free Cash Flow (TTM) Chart
Pfizer's generics operations are contained within its Established Products and Emerging Markets reporting segment. It hauled in about $14.5 billion during the first nine months of 2013. The odds of any one of the above companies raising enough cash to make an outright purchase are slim. Also, the sale of smaller pieces to interested parties would probably incur enough taxes to erode the sales' profitability.
The company could avoid the tax charges if...

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Thursday, January 30, 2014

GlaxoSmithKline and Personalized Medicine Take Another Leap Forward

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Earlier this month, the FDA granted an accelerated approval to GlaxoSmithKline (NYSE: GSK  )  for Mekinist and Tafinlar as an oral combination therapy for treatment of patients with inoperable melanoma. Merck  (NYSE: MRK  ) has a promising new compound that may give it some competition going forward. For now, this relatively straight-forward label expansion holds important lessons for pharmaceutical companies, and investors.
The FDA had already approved Mekinist for patients with BRAF V600E or V600K mutations, and Tafinlar for patients with BRAF V600E only. Although the National Cancer Institute estimates over 920,000 Americans are living with melanoma, this is the first approved combination therapy.
Vertically integrated
Glaxo's recently approved combination therapy requires a positive result from BioMérieux's THxID BRAF Kit. As the number of new medicines with required companion diagnostics continues rising, few companies are better positioned to take advantage of this trend than Roche  (NASDAQOTH: RHHBY  ) . The Swiss giant is the world leader in in vitro diagnostics, and has its eye on personalized medicine. Early last year it won approval for Kadcyla, a late stage breast cancer therapy it developed in partnership with Immunogen(NASDAQ: IMGN  ) . Roche's subsidiary, Ventana, will be providing the companion diagnostic for Kadcyla.
Competition from Merck
Glaxo's melanoma combo-therapy is likely to face competition in the future from Merck's PD-1 immunotherapy lambrolizumab (MK-3475). In November 2013, the company released compelling data. At one year, the overall survival rate was 81%. With numbers like this, it's likely that this therapy will hit the market, and it may hit sooner rather than later. Merck has initiated a rolling submission for lambrolizumab's biologics license application. This means the FDA is reviewing data as it becomes available in an attempt to speed this promising therapy into physician's hands.
Why specific is good
Melanoma is one of the most commonly diagnosed cancers, and about half of all melanoma patients harbor a BRAF mutation. Glaxo's combo therapy was approved fairly quickly based on results from a 162 patient, open-label trial with an objective response endpoint, not years of overall survival data. The drug's genetic specificity played a role in this relatively speedy approval.
As an investor, the advantages of an accelerated review are that...

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Wednesday, January 29, 2014

Can Pfizer Inc. Recover From Its Latest Lung Cancer Setback?

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Over the past several years, Pfizer (NYSE: PFE  ) has taken bold steps to streamline its operations and improve profitability after a wave of patent expirations. Focusing on the company's emerging oncology segment seemed like a great plan, until the recent failures of a lung cancer candidate with high expectations.
Dacomitinib is an epidermal growth factor receptor tyrosine kinase inhibitor, one of many tumor fighting drugs more commonly referred to as EGFR inhibitors. This experimental drug was expected to eventually put its non-small cell lung cancer (NCLSC) competitors on the ropes. Unlike Tarceva from Roche (NASDAQOTH: RHHBY  ) and Iressa from partners AstraZeneca (NYSE: AZN  ) and Teva (NYSE: TEVA  ) , Pfizer's unique therapy is irreversible and acts on multiple receptor types. Let's take a look at just how far this will set back the restructured pharma giant.
The prize
Combined, Tarceva and and Iressa racked up about $2 billion worldwide in 2012. Dacomitinib wasn't expected to be a blockbuster on the scale of a drug like Lipitor, which was Pfizer's most successful drug and formerly the top-selling drug in the world. However, dacomitinib's failed trials would sting much less if they occurred during earlier stages of development.
What went wrong
Not long ago, dacomitinib had the competition shaking in their boots. Results from a 188 patient trial released at the end of 2012 showed significantly stronger responses when compared to Tarceva. The problem with the drug wasn't safety or response rates, but...

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What You Should Listen for When Biogen Idec Inc. Reports Earnings

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Biogen Idec (NASDAQ: BIIB  ) will report earnings on Wednesday, January 29. The company's shares are up over 100% over the last twelve months, largely on the success of a new multiple sclerosis therapy that quickly elbowed past competition from both Sanofi (NYSE: SNY  ) and Novartis  (NYSE: NVS  ) . Highly effective new hemophilia therapies likely to be launched ahead of Novo Nordisk's (NYSE: NVO  ) also have investors excited.
Before getting caught up in posted figures versus expectations, it's always a good idea to make your own assessment of a company's long-term prospects. Let's take a closer look at a few key factors that we can listen for during the call. This way we can cut through the noise and measure the company's chances of continued success.
Insider selling
Before getting into critical factors that will affect Biogen's future profitability, we should address an issue that could cloud your judgement. You may have noticed news of insider selling at Biogen. This is true, but I don't think it's cause for alarm. As of January 23, 2014, five different directors, but not officers, have sold a combined 29,770 shares. The transactions represent just about 0.013% of total shares outstanding.
While it is certainly worth paying attention to insider transactions, viewed in context, I don't see any smoking gun here. At a recent price north of $310, the company's shares are trading at over 40 times trailing-twelve-month earnings. Generally in situations like these, without a real surprise to the upside, price gains made in anticipation of an earnings report are quickly wiped out. Given the odds, you can't blame insiders for taking some of their profits off the table beforehand.
Tecfidera launch
Insider transactions aside, we should take a good look at what to expect regarding Biogen's main sources of revenue. First up is the wildly successful oral multiple sclerosis therapy Tecfidera. Introduced in the beginning of April 2013, after six months it had already beat out Sanofi's Aubagio, and Novartis's Gilenya in terms of market share. According to Biogen Idec CEO, George Scangos, there are about 8,000-9,000 prescribing physicians for MS in the US. Six months after its launch, Tecfidera had been prescribed by...

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3 Things Investors Must Watch at Bristol-Myers Squibb Co.

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Bristol-Myers Squibb's (NYSE: BMY  ) end of year earnings report is coming up this Friday after the market opens. The company is going through a transformative phase, so we can expect the release and subsequent conference call to generate a great deal of noise. It's easy to get caught up in the ebb and flow created by analysts, but I think it's best to highlight some items to look out for so we can determine for ourselves whether the company is on the right path, or stumbling in the dark.
Eliquis' launch
The launch of Eliquis, marketed in partnership with Pfizer (NYSE: PFE  ) has been a disappointment so far. A slow US launch had to be expected, as it followed Boehringer Ingelheim's Pradaxa, and Xarelto from Johnson & Johnson (NYSE: JNJ  ) into the market. The analyst community was convinced that Eliquis' superior safety profile with respect to dangerous bleeding episodes would propel it past its competition. During the first nine months of 2013, sales of Eliquis in the US only reached $49 million, while Xarelto reached $246 million during Q3 2013 alone.
Bristol-Myers has stepped up its game, by sending physicians into the field to educate other physicians of Eliquis' safety profile. A supplemental new drug application that would extend the anticoagulant to treatment of hip or knee replacement patients post-surgery is also under review. Be sure to keep your eyes and ears open for any signs of improvement from what should already be a drug heading for blockbuster status.

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