Tag - Biotechnology

Bette Davis once said “old age is no place for sissies,” and to a degree, she was right. Old age not only brings wrinkles, but serious diseases such as Alzheimer’s and diabetes. Two drug companies that want to make the transition into your golden years a bit more tolerable are Transition Therapeutics Inc. (Nasdaq:TTHI) and Sirtris Pharmaceuticals Inc. (Nasdaq:SIRT).

Both companies have ample cash for funding further development efforts and have made noteworthy progress over the last year advancing lead compounds. While Transition and Sirtris are likely several years away from commercial sales, their drug candidates address huge, growing markets, estimated at hundreds of millions of patients worldwide, and have significant future revenue potential. 

Transition is developing novel drugs for treating Alzheimer’s disease and Type 2 diabetes. Its lead compound, ELND005, for the treatment of Alzheimer’s disease, works by breaking down neurotoxic fibrils in the brain and allowing certain peptides to clear the body before they can form plaque. Alzheimer’s disease is the fourth leading cause of death among U.S. adults and has no cure; it begins with memory loss and eventually progresses to overall loss of cognitive function. Most Alzheimer’s patients die within eight years of diagnosis. More than 30 million people worldwide currently suffer from the disease and their numbers are expected to increase dramatically as the number of seniors grows.

The company is partnering with Elan Corporation (NYSE:ELN) to develop and commercialize ELND005. Phase II clinical trials of the drug involving some 340 patients with mild to moderate Alzheimer’s disease began last December and are expected to last approximately 18 months. To help fund the trials, Transition received milestone payments from Elan totaling $7.5 million last October and $5 million this January.

Transition is also developing TT-223 for the treatment of Type 2 diabetes. TT-223 works by regenerating the body’s insulin-producing cells. Diabetes is the world’s fastest-growing disease; there are more than 200 million diabetics worldwide and it is estimated one in 10 patients will eventually die from complications of the disease. Type 2 diabetes accounts for 90% of all cases and usually develops in adulthood. Transition is partnering with Eli Lilly & Co. (NYSE:LLY) to develop and . . .

I've been a long-standing fan of biotech expert John McCamant; however, I've been an even longer-term fan of his father, James McCamant, a pioneer in biotechnology whose research I've followed since the early 1980s.
 
In a rare interview in their Medical Technology Stock Letter, John turned to his father for his insights into the current state of the biotech market as well as some of his current favorite stocks in the sector:
 
"We recently sat down with James McCamant. Though he has since transitioned to the position of editor-at-large, Jim is still heavily involved in the biotech sector, and without question, we sleep easier at night with the knowledge that we have the full capacity to draw upon Jim's wisdom and experience, at any time.
 
"Jim pointed to the enormous detrimental impact that short-selling has had on the sector. Hedge funds have been actively and rampantly shorting individual biotech stocks, using manipulation to scare individual investors with the hope of increasing the profits on their short sale.
 
"Since the hedge funds that are primarily responsible have very large amounts of capital, they can live with the frequent large losses. This pattern has led to, in some cases, catastrophic haircuts in individual biotech stock prices.
 
"The point here is not to dwell on short-selling, per se. We mention it again because it has played a key role in creating what has become the interesting and unusual biotech investment opportunity that Jim sees.
 
"That is, there has never been a period before in the history of the biotech sector where we have had so many cheap stocks. In fact, we are in an extremely attractive situation right now in which several companies could rise 50% from their current valuations and still be at the beginning stages of a more major upward move.
 
"The process of shifting investor sentiment is often a difficult one, and usually takes a lot longer than we think it will, or even should, for that matter. However, keep in mind that when sentiment does shift, and it will, investors will likely be underestimating the upside.
 
"As Jim strongly pointed out, the stock market is presenting an unusual opportunity. There are currently more biotech stocks selling at prices which . . .

There are terrorist attacks, and then there’s bioterrorism: deadly spores and killer bacteria. Reaching for the red phone of germ warfare is Emergent BioSolutions, Inc. (Nasdaq:EBS), developer of an immunobiotic arsenal to fight infectious diseases.

No, this is not the world Alfred E. Neuman, gap-toothed cover boy of Mad Magazine, would have envisioned 50 years ago. Yes, it is perfect for EBS, the Rockville, Md.-based company that focuses on making products against category “A” biological agents, those that the Centers for Disease Control say pose the greatest possible threat to public health. In addition to focusing on immunobiotics, EBS seeks to acquire late-stage product candidates, mitigate costs through government funding and third-party support, and fund development through cash flow.

Leading EBS’ biodefense portfolio is BioThrax, the only FDA-approved vaccine for anthrax infection. EBS also has next generation anthrax vaccine product candidates in preclinical and Phase I development, and it’s working on an anthrax immune globulin that treats anthrax disease after toxins have been released into the body — a situation for which there are now no approved treatments. EBS is battling on the fear front of botulism as well: it has products in pre-clinical development for treatment of and vaccines for the botulinum toxin.

The United States government buys virtually all of the BioThrax EBS can make. The company is the sole-source contractor with the U.S. Department of Health and Human Services (HHS) for supply of BioThrax for the Strategic National Stockpile. In September of last year, EBS signed a new three-year BioThrax contract with HHS worth up to $448 million — a contract that helps to solidify the company’s forward revenues.

EBS also sells BioThrax to the Department of Defense (DoD) for immunization of military personnel. Demand from the DoD — which is pursuing a collaborative arrangement with the HHS to use stockpiled doses of BioThrax — is expected to increase due . . .

Shares of MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK) are rocketing this morning after the pharmaceutical company said it received approval from the U.S. Food and Drug Administration for its Moxtag drug for strep throat.

Adults and pediatric patients 12 years and older now only have to take one tablet (775 mg) of Moxtag daily as opposed to taking penicillin four times daily.

MiddleBrook also added that it has agreed to the FDA’s request to develop a version of MOXATAG for pediatric patients younger than 12 years of age with strep throat. The company said it will submit a completed study report and data set within the next five years.

Shares of MiddleBrook (MBRK) soared 188%, or $2.35, to $3.60 at 10:07 a.m. ET. Pharmaceuticals Shares of MiddleBrook Pharmaceuticals have been trading in the range of $1 to $4 for the past 52 weeks.

Orexigen Therapeutics, Inc. (Nasdaq: OREX) shares are trading heavily after the obesity drug developer announced it will price its public offering of seven million shares of common stock at $11 apiece. The price represents a 4% discount from Wednesday’s closing price of $11.41.

The firm has approximately 26.9 million shares outstanding.

For the offering, Merrill Lynch & Co. acted as the book-running manager and Leerink Swann LLC acted as co-lead manager for the offering. JMP Securities LLC, Lazard Capital Markets, Canaccord Adams Inc. and Natixis Bleichroeder Inc. acted as co-managers for the offering.

In morning trading, OREX shares are down 5%, or $0.57, at $10.84. Over the last 52 weeks, shares have ranged from $10.80 to $19.15.

NMT Medical, Inc. (Nasdaq: NMTI) said today that it is closing down its patent foramen ovale (PFO)/migraine trial, MIST II, to focus its resources on its PFO/stroke opportunity.

“Even though more than 1,400 patients have been screened for enrollment in the trial, only a handful of those patients have met the requirements to be randomized,” president and Chief Executive Officer John E. Ahern said in a statement.

NMT says the trial’s termination will enable the company to save approximately $14 million over the next two to three years as it shifts the resources originally allocated for the MIST II trial toward the company’s stroke initiatives.

As a result of this decision, NMT said it has stopped patient enrollment in MIST II, which was being conducted at 20 centers in the United States. MIST II, which was approved by the U.S. Food and Drug Administration in September 2005 and redesigned in August 2006, had a rigorous patient screening process.

Shares of NMT Medical (NMTI) tumbled 26.56%, or $1.66, to $4.59 at 12:49 p.m. ET. Shares of NMT Medical have been trading in the range of $4.56 to $16.06 for the past 52 weeks.

Shares of Northstar Neuroscience, Inc. (Nasdaq: NSTR), are tanking to a new 52-week low in pre-market after the medical device company, which develops therapies for the treatment of neurological diseases and disorders, said that its EVEREST pivotal trial evaluating cortical stimulation to improve hand and arm function in stroke survivors failed.

The EVEREST trial was designed to determine whether cortical stimulation in conjunction with rehabilitation therapy would lead to greater gains in hand and arm function and activities of daily living than rehabilitation therapy alone.

Shares of Northstar Neuroscience (NSTR) sunk 86.24%, or $7.21, to $1.15 in pre-market trading. Shares of Northstar Neuroscience have been trading in the range of $7.83 to $14.81 for the past 52 weeks.

Synta Pharmaceuticals Corp. (Nasdaq: SNTA) said today that it received an upfront non-refundable cash payment of $80 million from GlaxoSmithKline for their joint development and commercialization of elesclomol.

The cash payment follows an expiration of a waiting period imposed by the Federal Trade Commission under the Hart Scott Rodino Antitrust Improvements Act. The agreement was originally entered into on Oct. 8.

Elesclomol is a small-molecule, oxidative stress inducer that is currently in a global, pivotal Phase 3 trial in metastatic melanoma.

Shares of Synta (SNTA) gained $0.54, or 7.36%, to $7.88 in pre-market trading. Pharmaceuticals Shares of Synta Pharmaceuticals have been trading in the range of $4.93 to $11.25 for the past 52 weeks.

Shares of Neurobiological Technologies, Inc. (Nasdaq: NTII) are rising on news before the start of trading that the biotechnology firm has joined hands with Buck Institute for Age Research to develop a drug for the treatment of Huntington’s disease.

Emeryville, Calif.-based Neurobiological Technologies and the Buck Institute, an independent research facility focused on aging and age-related disease, announced this morning that they have formed a partnership to work on a cure for Huntington’s disease, a fatal brain disorder.

The research involves a naturally occurring protein called fibroblast growth factor-2 (FGF-2) that has been studied for its ability to protect nerve cells from degeneration. Scientists at Buck have studied FGF-2 and have discovered that mice suffering from Huntington’s disease showed a 150% increase in new nerve cells. The animals treated with the protein also lived longer and improved their motor performance.

The next step is to develop a form of FGF-2 that can be moved into human clinical trials.

“We are proud to be working with Buck on this project,” said Paul E. Freiman, president and CEO of Neurobiological Technologies, in a statement. “We look forward to applying our expertise in drug development to this partnership and working to bring this important research from the lab to the patient.”

An inherited neurological disorder, Huntington’s disease is characterized by abnormal body movements and a lack of coordination. Cognitive abilities are also affected.

Neurobiological Technologies estimates that the disease, which is fatal and for which there is no cure, currently affects about 30,000 Americans.

At 1:03 p.m. ET, shares of Neurobiological Technologies (NTII) had gained $0.25, or 8.39%, to $3.23. The 52-week high of $5.19 was touched on Oct. 8, while the 52-week low of $2.06 was set on Nov. 6.

AspenBio Pharma, Inc. (Nasdaq: APPY) shares are soaring after the biotechnology company reported that it expects to complete the FDA requirements to receive regulatory clearance for its AppyScore medical device before the end of 2008. AppyScore is a blood-based screening test for appendicitis.

“This represents another major milestone in the advancement of our breakthrough screen test for appendicitis and demonstrates the strength of our initial clinical results and particularly the high sensitivity of AppyScore,” CEO Richard Donnelly said in a statement. “We expect the FDA 510(k) to be a faster and easier path for regulatory clearance and introduction of this product. Most importantly, it creates the possibility of being able to begin marketing the first version of this test in the United States and certain international markets in 2008.”

In morning trading, APPY shares are soaring 22.8%, or $2.20, at $11.85. Over the last 52 weeks, shares have ranged from $2.50 to $15.16.

After a spate of food, drug and product safety recalls from China has left the nation's reputation in tatters among trading partners, one might think all the negative publicity would have shaken confidence in the country's pharma industry. It hasn't.

To allay Western concerns, Beijing, which wants a healthy pharmaceutical industry, has pledged $1.2 billion to clean up its food and drug safety problems. China's State Food and Drug Administration, which has a regulatory system similar to the U.S. Food and Drug Administration, is being reformed to improve safety standards and crack down on corrupt practices and drug counterfeiters (the Chinese media has reported the agency has yanked hundreds of manufacturing licenses and stepped up facility inspections).

Lower costs, top scientific talent and access to one of the world's largest and fastest-growing markets for prescription drugs have led every Big Pharma company—including Pfizer Inc. (NYSE: PFE), GlaxoSmithKline (NYSE: GSK), Bristol-Myers Squibb Co. (NYSE: BMY), Sanofi-Aventis (NYSE: SNY), Britain's AstraZeneca (NYSE: AZN) and Switzerland's Novartis (NYSE: NVS)—to set up shop in China.

But international heavyweights aren't the only ones vying to tap China's rich drug market. In one niche in the bio-drug sector, a local player dominates rivals. 3SBio Inc. (Nasdaq: SSRX), a leading producer of high-quality, low-cost biopharmaceuticals, has cornered the market in China for the biologic drug Epoetin, known as Epo, which is used to treat anemia associated with chemotherapy and kidney dialysis by increasing production of red blood cells.

Similar to Amgen Inc.'s (Nasdaq: AMGN) wildly popular Eopgen, 3SBio's flagship Epo product, sold under the brand name Epiao, makes up 37% of the Chinese market in product sales. (Amgen's product, distributed in China under the name Espo, has 15% market share; Swiss pharmaceutical company Roche's Epo drug, Recormon, has 10%.) Epogen sales, which are growing 30% annually, account for about 70% of 3SBio's total revenue.

Tpiao, 3SBio's second best-selling product, is used to treat platelet deficiency, a side effect of chemotherapy treatment. Since its January 2006 launch, the drug has sold unchallenged with no known competition in China. Analyst Kimberly Lee of Pacific Growth Equities estimates the drug will rake in $4.8 million in fiscal 2007 and could see sales grow in the neighborhood of $29 million in five years.

China-based biotechnology company 3SBio Inc. (Nasdaq: SSRX), after Tuesday’s close reported a strong third quarter, well ahead of analysts’ estimates, due to top-line growth in the company’s EPIAO and TPIAO products.

For the three months ended Sept. 30, the small cap reported revenue rose to 56.1 million yuan (US$7.5 million) from 35.6 million yuan in the same period last year. The current quarter revenue number came in ahead of the Thomson mean estimate of $6.6 million in revenues.
 
Revenues were primarily driven by continued growth in the company’s flagship EPO product, EPIAO, as well as the rapid sales growth in its TPO product, TPIAO.

Net revenues from EPIAO increased by 30.7% in the third quarter 2006 to $4.8 million in the third quarter 2007, resulting from increased EPIAO sales efforts focusing on the growing oncology market in China.

Additionally, net revenues from TPIAO increased 171.6% to $1.9 million in the third quarter 2007. The company’s TPIAO product line was the second largest contributor to revenue for the quarter. TPIAO accounted for 25.3% of total net revenues for the third quarter, compared with 14.6% in the third quarter 2006.

3SBio recorded net income of 24.1 million yuan (US$3.2 million), or $0.15 cents per ADS, compared with 9.6 million yuan, or $0.67 per ADS in the third quarter of 2006. The Thomson Financial mean estimate was for earnings of $0.12 per share. Net income was driven by an increase in interest income from the company’s enhanced cash position since its IPO.

The company also specified that its income tax expense increased by 59.8% to $0.3 million for the third quarter as a result of the company’s increased profitability. The effective tax rate was 8.4% for the third quarter 2007, lower than the 12.7% for the prior year period, because of more interest income earned from its enhanced cash position after its IPO that was not subject to tax.

As a result, net income increased by 151.4% to 24.1 million yuan (US$3.2 million) for the third quarter of 2007.

Shares of 3SBio (SSRX) gained $2.34, or 16.35%, to $16.74 at 12:40 p.m. ET. Shares of 3SBio have been trading in the range of $8.18 to $22.75 for the past 52 weeks.

This week’s newsletter watch focuses on Immtech Pharmaceuticals, Inc. (AMEX: IMM), a biotech small cap with coverage recently initiated by industry expert John McCamant.

McCamant is a long-standing authority in the biotech field, beginning as an equities analyst for the American Healthcare Fund. He then focused on the venture capital side of the sector at Burrill & Company, a San Francisco-based private merchant bank, before founding Ten Peaks Capital, a financing company in the life sciences industry.

In the 1990s, he took over as editor of The Medical Technology Stock Letter, a leading newsletter focused on the biotech space that had been founded by his father, Jim McCamant, also a well-known authority on biotechnology stocks. Today, Jim remains one of the newsletter world's most respected advisors in the biotech space.

Regarding Immtech, he explains, "The company has multiple promising mid- and late-stage programs devoted to significantly underserved and potentially lucrative indications, such as African sleeping sickness and Pneumocystis pneumonia."

IMM, he points out, is focused on the development of therapeutics for some of the world's most devastating acute infectious diseases—diseases for which new and improved treatments are severely needed and in which market sizes are often measured in billions.

The diseases IMM is focused on treating using its lead drug candidate, pafuramidine (DB289), include malaria, trypanosomiasis (commonly referred to as African sleeping sickness) and Pneumocystis pneumonia (PCP). PCP is a fungal infection of the lungs that can lead to potentially deadly pneumonia in patients with HIV and other immuno-compromised patients.

Additionally, he says, IMM has an already robust and still-growing library of compounds that target Hepatitis C, fungal infections and bacterial infections.

Shares of Dynavax Technologies Corp. (Nasdaq: DVAX) are jumping today after the small cap said it made an agreement with Merck & Co. (NYSE: MRK), overshadowing a widening third-quarter loss reported today.

Dynavax signed a global license and development collaboration agreement with Merck to jointly develop Heplisav, an investigational hepatitis B vaccine that is currently being evaluated in a multi-center Phase 3 clinical trial involving adults and in patients on dialysis.

Under the terms of the agreement, Merck receives worldwide exclusive rights to Heplisav, and will fund future vaccine development, as well as provide commercialization for the drug.

Dynavax will receive an initial payment of $31.5 million, and will be eligible to receive up to $105 million in development and sales milestone payments, as well as double-digit tiered royalties on global sales of Heplisav.

Dynavax, which develops Toll-like Receptor 9 (TLR9), agonist-based products to treat and prevent infectious diseases, allergies, cancer and chronic inflammatory diseases, also reported a wider-than-anticipated loss for the third quarter.

Neurocrine Biosciences, Inc. (Nasdaq: NBIX) said this morning that it made a sale and leaseback agreement with Veralliance Properties for its real estate assets for $108 million.

Under the terms of the asset purchase agreement, Neurocrine said it anticipates that it will receive approximately $60 million in cash net of fees, expenses and existing indebtedness. The small cap said it has certain options to repurchase all of the properties included in the transaction during the term of the lease.

Along with the closing of the deal, which is expected to close before year’s-end 2007, Neurocrine said it will lease back its corporate headquarters under a lease with a 10 year term.

Shares of Neurocrine Biosciences (NBIX) gained $0.40, or 4.32%, to $9.65 in pre-market trading. Shares of Neurocrine Biosciences have been trading in the range of $7.51 to $14.88 for the past 52 weeks.

Enzo Biochem, Inc. (NYSE: ENZ) shares are up after the biotechnology company announced before the bell that it narrowed its fourth-quarter loss to $3.3 million, or $0.09 per share, above analyst estimates of $0.12 per share and from $4.5 million, or $0.14 per share, a year earlier. The New York City-based company’s revenue was bolstered by its acquisition of Axxora Life Sciences Inc.

For the three months ended July 31, the firm’s revenue increased to $17.9 million, above Wall Street projections of $16.3 million and compared with $9.9 million a year earlier.

“We are pleased to report the strong improvement in operating results,” Barry Weiner, Enzo’s president, said in a statement. “Enzo Clinical Labs is gaining solid traction as a result of the expanded relationship with United Healthcare, and in the increase in patients we are servicing from our enlarged facilities. And while we have benefited from only two months inclusion of the Axxora Life Sciences acquisition, its integration into Enzo Life Sciences is proceeding as planned in an efficient and productive manner.”

In morning trading, ENZ shares are up 4.23%, or $0.49, at $12.08. Over the last 52 weeks, shares have ranged from $11.25 to $18.98.

Avanir Pharmaceuticals (Nasdaq: AVNR) announced ahead of the opening this morning that it reached an agreement with the U.S. Food and Drug Administration, under the FDA’s Special Protocol Assessment  process, to design a single confirmatory Phase III clinical trial for Zenvia, which treats patients with pseudobulbar affect.

Pseudobulbar affect is a condition associated with neurological disorders, including involuntary emotional expression disorder such as uncontrollable laughing and/or crying. Neurological disorders include, but are not limited to multiple sclerosis, Alzheimer's disease, Parkinson's disease and stroke.

Shares of Avanir (AVNR) popped 38.54%, or $0.79, to $2.84 out of the gate. Shares of Avanir have been trading in the range of $1.07 to $9.41 for the past 52 weeks.

Targeted Genetics Corp. (Nasdaq: TGEN) today announced that it has received a milestone payment from Amsterdam Molecular Therapeutics B.V.

The clinical-stage biotechnology company said the payment was made under a licensing agreement that provides Amsterdam Molecular with non-exclusive rights to patents covering Adeno-Associated Virus type 1, which has the potential to be used in the development and commercialization of therapeutic products for the treatment of lipoprotein lipase deficiency.

The amount of the milestone payment was not disclosed.

LPL deficiency in humans is a severe and debilitating disease associated with extremely high serum triglyceride concentrations, high morbidity and increased mortality.

Shares of Targeted Genetics (TGEN) were halted in pre-market trading.

Regenerative medicine company Aastrom Biosciences, Inc. (Nasdaq: ASTM) today announced positive interim results from two separate research groups using autologous stem cell products manufactured with the company’s Tissue Repair Cell Technology platform.

Aastrom said the first study yielded positive results after Aastrom’s Vascular Repair Cells were used for the treatment of chronic diabetic foot wounds associated with critical limb ischemia. Additionally, in a separate study, Aastrom found using Bone Repair Cells to treat osteonecrosis of the femoral head also yielded positive results.

Shares of Aastrom (ASTM) gained $0.08, or 5.84%, to $1.45 in pre-market trading. Over the last 52 weeks, shares have ranged from $1.08 to $1.67.

Shares of Progen Pharmaceuticals Ltd. (Nasdaq: PGLA) are sliding ahead of the bell after the biotechnology company announced that its Phase 2 trial administering 250mg of PI-88 in combination with the chemotherapeutic agent docetaxel to patients with advanced non small-cell lung cancer failed.

The small cap also said the trial failed with regard to time to progression, response rate, overall survival and quality of life measures.

Shares of Progen (PGLA) slipped $0.16, or 5.32%, to $2.85 ahead of the opening.

Shares of Maxygen, Inc. (Nasdaq: MAXY) are tumbling today after Roche advised the biotechnology company that it has placed a hold on further clinical development of Maxygen’s MAXY-alpha, which is for the treatment of Hepatitis C and Hepatitis B virus infections and is licensed to Roche.

The trial has been halted in Phase I after results showed that Maxygen’s drug candidate unexpectedly exhibited poor concentration and effect on candidates who took the drug.
Additionally, the trial found that antibodies (immune system cells) bound to the MAXY-alpha after it was administered.

Roche has currently initiated additional investigational studies in order to assess these results.

“We are all surprised by these unexpected findings,” said Maxygen's CEO Russell Howard. “We don't yet know how this will impact the future timing or advancement of the program.”

Roche entered into an agreement with Maxygen in 2003 to license from Maxygen worldwide commercialization rights to specific interferon product candidates for the treatment of Hepatitis C and B virus infections. Maxygen received an initial payment, full research and development funding for work done in the first two years of the collaboration, and milestone payments for the advancement of the MAXY-alpha product candidate. In addition, Maxygen is eligible to receive milestone payments and royalties based on any product sales.

Shares of Maxygen (MAXY) toppled 15.05%, or $1.24, to $7 in Friday morning trading.