The S&P Select Biotech Index retraced back down to the 100-day moving average as the yield on 10-year treasury bonds rallied back to near 4.5%.
The market seemingly looked past last Friday's hot jobs number with attention now focused on this Wednesday's CPI for clues on when much anticipated rate cuts may begin. Election rhetoric around drug pricing is ramping up with President Biden reiterating a proposal to expand drug price controls under the IRA to include “at least 50 drugs a year”. M&A remains quiet heading into earnings season.
M&A:
Genmab (GMAB) announced the acquisition of ProfoundBio (private), an ADC platform company with the lead program focused on ovarian cancer and other FRα-expressing solid tumors for $1.8B in cash. This is the fourth >$1B ADC acquisition following Seagen (SGEN), Immunogen (IMGN), and Ambrx (AMAM)
Boston Scientific (BSX) and Axonics (AXNX) each received a request for additional information from the U.S. Federal Trade Commission (FTC) in connection with the FTC's review of the merger. The deal is now expected to be completed in 2H24
Regulatory:
Supernus Pharmaceuticals (SUPN) announced FDA issued another CRL for apomorphine pump SPN-830, showing a high bar for drug/device combination approvals.
Amylyx Pharmaceuticals (AMLX) will pull its ALS drug Relyvrio/Albrioza from the market after the confirmatory trial failed to show a benefit. The company will undergo a 70% reduction in force.
Final 2025 Medicare Advantage (MA) rates announced by CMS came in below street expectations. Investors had been expecting a 50-100 bps improvement from the initially proposed rates, in line with lobbying efforts that achieved increases in recent years. MA stocks, especially HUM and UNH, were weak as a result of investor expectations that margins would be flat to down without plan benefit cuts.
Clinical:
Exact Sciences (EXAS) rallied after competitor Freenome (private) announced highly anticipated topline data from its blood-based test to screen for colorectal cancer (CRC) that disappointed (79% sensitivity vs street expectations for ~85%+). Investors expect EXAS's stool-based test Cologuard will continue to dominate the non-invasive CRC test space as a result.
Verve Therapeutics (VERV) fell on pausing the Heart-1 trial with gene editing therapy VERVE-101 that targets PCSK9 due to clinical laboratory abnormalities. . Verve is now prioritizing the development of VERVE-102 and the initiation of the Heart-2 clinical trial. VERVE-102 uses the same base editor and guide RNA for PCSK9 but a different lipid nanoparticle (LNP) delivery system than VERVE-101. Shares fell ~40%
Roivant (ROIV) approved a $1.5B share buyback and announced positive NEPTUNE data for TYK2i brepocitinib in NIU
Gristone Bio (GRTS) fell ~50% on providing a mixed data update from a colon cancer trial and subsequent offering to raise $32.5 million at $1.50. In the trial the neoantigen cancer vaccine GRANITE failed to differentiate on the primary endpoint of molecular response (30% for GRANITE vs 42% for control arm), but showed a favorable PFS trend (HR=0.82)
Capital Markets:
Contineum Therapeutics (CTNM) a clinical-stage biotech focused on developing oral small molecules for neuroscience and I&I indications, raised $110 million in an IPO and broke price on its debut.
Corporate Updates and Earnings:
Sanofi (SNY) confirmed an agreement to settle 4,000 claims across multiple states that Zantac heartburn medicine caused cancer. Resolution of cases will have no material financial effect
Culling the Herd:
Acorda therapeutics (ACOR) filed for voluntary chapter 11 protection to facilitate orderly sale to Merz Therapeutics (private)
Carisma Therapeutics (CARM) announced a 37% reduction in force (RIF) and will discontinue one of two clinical assets to extend the cash runway into 3Q 2025