The S&P Select Biotech Index started the week green for the year as the everything rally has pulled the index up >30% off the November low.
M&A continued last week with Astrazeneca's (AZN) purchase of Icosavax (ICVX)for $15 per share plus a non-tradable CVR for up to an additional $5 per share, making the total potential consideration a ~100% premium to the prior close. AZN hopes ICVX's Phase 2 clinical data for RSV vaccine candidate IVX-A12 will eventually enable entry into the market where GSK PLC (GSK) and Pfizer (PFE) are having early launch success with competing products.
Bristol-Myers Squibb (BMY) continued the trend of big pharma partnering with private Chinese biopharma companies with an $800 million upfront payment to license SystImmune's BL-B01D1, an EGFR / HER3 bispecific ADC. Near term contingent payments are expected to be an additional $500 million and future contingent payments (including sales milestones) may total up to $7.1 billion. This is the second multi-billion oncology deal BMY has inked in recent months as they attempt to replace revenue lost to generic competition from their largest legacy oncology franchise, Revlimid.
Merck (MRK) continued the trend of partnering with negative enterprise value small caps instead of acquiring them outright with a preclinical degrader-antibody conjugates research deal with C4 Therapeutics (CCCC). MRK's modest $10 million upfront, $600 million in potential future milestones and potential tiered commercial royalties sent shares up >500% over several sessions. Despite the rally, CCCC started this week with a <$250 million market capitalization and ~$50 million EV.
Negative EV commercial oncology company ADC Therapeutics (ADCT) has also rallied >400% from the November lows, aided in part by a favorable data update from the Phase 2 trial of ZYNLONTA at the America Society of Hematology (ASH) meeting. Nevertheless, ADCT remained in negative EV territory as investors continued to debate potential pathways to profitability.
The Federal Trade Commission (FTC) handed out a mixed bag of secret Santa gifts to investors with the successful closing of the $43 billion PFE / Seagen (SGEN) merger and unwinding of Sanofi's (SNY) $150 million upfront Phase 2 deal with Maze Therapeutics' (private).
It seems FTC put the latter deal on the naughty list to prevent SNY from controlling the potentially the first oral glycogen synthase 1 inhibitor for Pompe disease given their existing dominant commercial Pompe market position with Lumizyme (alglucosidase alfa) and Nexviazyme (avalglucosidase alfa-ngpt). SNY announced they would be terminating the Maze deal following FTC's administrative challenge. EU regulators served up a lump of coal on their own with Illumina (ILMN) confirming it will divest GRAIL following the antitrust appeal loss.
Acadia Pharmaceuticals (ACAD) notched a legal win in Delaware District Court confirming the validity of patent claims covering lead drug Nuplazid. ACAD shares rallied ~30% as investors bumped up revenue duration in their models.
Apellis Pharmaceuticals (APLS) went the other way, falling ~25% as the company now expects EU regulators to reject the pending regulatory application for intravitreal pegcetacoplan for the treatment of GA secondary to AMD following a negative trend vote. Rest of world sales may represent up to ~40% of pegcetacoplan's revenue potential and management announced the intention to appeal the expected negative outcome.
Checkpoint Therapeutics (CKPT) shareholders sympathized as shares were cut in ~half following FDA's regulatory rejection of lead oncology drug Cosibelimab based on manufacturing inspection issues.
A flurry of negative clinical data updates are proving to be unwelcome year end portfolio stuffers. Obesity darling Structure therapeutics (GPCR) was nearly cut in half on updated data from oral GLP-1 agonist GSBR-1290 that showed a magnitude of weight loss that was below analyst expectations and competitive benchmarks. GPCR touted low discontinuation rates in the updated data set despite nausea / vomiting rates of 70-87% opening debate about additional work on optimizing dose / schedule.
Highly anticipated pivotal SPLASH trial data from Point Biopharma (PNT) and Lantheus Holdings (LNTH) also disappointed, falling short of key competitor Novartis' (NVS) Pluvicto. PNT2002 (177Lu radiopharmaceutical) was only able to muster a 9.5 month PFS benefit vs 6 months in the control arm (HR 0.71) in pre-chemo prostate cancer compared to Pluvicto's 12 months vs 5.6 months in the control arm (HR 0.43).
Thought leaders were looking for a less than 1-2 month separation to view the data sets as comparable. PNT shares only traded down ~11% as the pending acquisition by Eli Lilly (LLY) is still expected to close, while LNTH fell ~25%, wiping out >$1 billion in market cap.
Mirum Pharmaceuticals (MIRM) was also under pressure after announcing the EMBARK P2 trial in Biliary Atresia did not meet the primary endpoint.
AADI Bioscience (AADI) crashed >50% on initial data of nab-sirolimus that showed response rates below expectations.
Reneo Pharmaceuticals (RPHM) was down even more, falling 86% on the failure of the Ph2b STRIDE trial for mavodelpar in primary mitochondrial myopathies (PMM). Mavodelpar did not clearly separate from placebo in the trial leading to program discontinuation and a 70% reduction in force.
Investors are hoping this will be the last sighting of the biotech grinch for the rest of the year.
Please note the weekly digest will not publish next week due to Christmas - happy holidays