The S&P Select Biotech Index made a new annual low to start the fourth quarter and is down nearly 15% YTD.
The biotech bear market enters its twelfth quarter approaching technical levels where a bottom might be formed.
Mention of the so called "bond vigilantes" is on the rise as 10-year treasuries challenge 5% while fiscal expansion continues apace. The preliminary injunction filed by the Chamber of Commerce which aimed to block the price setting related to the Inflation Reduction Act (IRA) before October 1st was denied, but the ruling does not impact the substance of the eight cases that are underway. Legal experts expect the cases may ultimately be adjudicated by the Supreme Court, perhaps within 3 years.
Positive clinical updates continued with Immunovant (IMVT) rallying >100% as phase 1 data for FcRn inhibitor IMVT -1402 compared favorably to segment leader Vyvgart.
Soleno Therapeutics (SLNO) reminded investors significant upside can be found when a stock left for dead delivers compelling data. SLNO shares rallied >500% on positive top-line results from Study C602 of DCCR (Diazoxide Choline) in Prader-Willi syndrome.
Fire sale M&A returned with the acquisition announcement of Intercept Pharmaceuticals (ICPT) by Alfasgima (private) for $19 per share in cash or ~$750 million. Although the deal was an 82% premium to the prior day's close, it was only ~2x current revenue and 96% below the all time stock price high ($497 in 2014). Many specialists felt pain as the short interest of ICPT was >30% in anticipation of market share loss to several competitors that recently announced what analysts believe is superior data.
Gilead (GILD) highlighted the pitfalls of development stage M&A deals upon termination of the ENHANCE-2 study in AML with TP53 mutations based on an interim analysis concluding that Magrolimab is unlikely to demonstrate a survival benefit compared to the control group. GILD acquired Magrolimab as the lead asset in the $4.9 billion purchase of Forty Seven.
Madrigal Pharmaceuticals (MDGL) seemingly confirmed there no near term M&A was likely for them as they raised $500 million in preparation for a potential launch of pending NASH therapy Resmetirom. Interestingly MDGL's Chief Commercial Officer departed just prior to the raise.
Amicus Therapeutics (FOLD) received positive regulatory news with the approval of Pombiliti for Pompe disease. FOLD shared guidance for global peak revenues of >$1 billion and announced a WAC of $650k per year for an average weight patient.
Culling of the herd continued with Abbvie (ABBV) discontinuing the collaboration agreement with Caribou Biosciences (CRBU), PTC Therapeutics (PTCT) announcing a 25% reduction in force and Infinity Pharmaceuticals (INFI) filing for Chapter 11 bankruptcy.
It is certainly a sign of the times when a company like INFI that has been around for ~20 years and has an accumulated deficit of ~$1 billion is ceasing operations.