Hawkish repricing of Fed rate-cut expectations (two cuts now seen in 2024, with the first coming in September) helped drive the S&P Select Biotech Index down to test the 200-day moving average.
For the first time since last year, the S&P 500, Nasdaq, and Russell 2000, all closed below their 50-day moving averages.
Investors continue to debate the impact of strong economic data in the US, sticky inflation, and consistent "higher for longer" messaging from the Fed. Biotech M&A remained quiet as we head into earnings season and capital markets remain active despite several high profile deals breaking price in recent weeks.
Clinical:
Intra-Cellular Therapies (ITCI) announced Lumateperone delivered positive data from Study 501 in MDD with a 4.9 pt pbo-adjusted reduction on MADRS. The magnitude of benefit came in above the ~2 point guidance from management and is at the higher end of the efficacy range for key adjunctive antipsychotics competitors Vraylar (~2-2.5) and Rexulti (~2-3.2pts). Analysts expect this to open an additional $1B+ opportunity
Cerevel Therapeutics (CERE) announced the TEMPO-3 Phase 3 trial in adjunctive treatment of Parkson’s Disease met the primary endpoint with a statistically significant increase in 1.1 h in total “on” time without troublesome dyskinesia compared to those treated with LD and placebo (1.7 h vs 0.6 h, p < 0.0001). CERE share price move was muted given the pending acquisition by Abbvie (ABV)
Sage Therapeutics (SAGE) came under pressure as its Phase 2 trial of dalzanemdor failed to meet the primary endpoint in Parkinson's Disease
Capital Markets:
Cullinan Therapeutics (CGEM) announced a $280 million PIPE priced at a premium to the prior close and strategic plans to expand into autoimmune diseases with a CD-19-CD3 bispecific for B-cell mediated indications including lupus. Shares subsequently traded ~15-20% below deal price
Biohaven (BHVN) raised $230 million at $41 following a partial release of highly anticipated degrader program BHV-1300 data that did not disclose doses or the depth of IgG reduction. Shares had rallied ~300% since last September in anticipation of the data with investors left with more questions than answers following the release. Shares subsequently traded ~10% below deal price
Corporate Updates & Earnings:
Johnson & Johnson (JNJ) reported a Q1 adjusted EPS beat ($2.71 vs. street $2.64) and narrowed adjusted EPS guidance to $10.57 – 10.72 from prior guidance of $10.55 -$10.75
Culling the Herd:
23andMe (ME) CEO and 25% owner Anne Wojcicki announced a proposal to take the company private. Shares are trading near ~$0 EV, down 98% from the 2021 peak
Vaxxinity (VAXX) announced plans to delists from Nasdaq. Shares traded down ~60% on the news
