Biotech Round-Up: M&As, Financings and Immuno-Oncology
Source: John McCamant for Streetwise Reports
April 18, 2018 (Investorideas.com Newswire) John McCamant, editor of Medical Technology Stock Letter, reviews biotech M&A and financings, and discusses one company that is expanding its immuno-oncology pipeline.
M&Amp;A Is Alive and Kicking as Novartis Comes Through Fast with Big AveXis Deal
Novartis AG (NVS:NYSE) recently sold its consumer health JV to Glaxo and its CEO said it was aggressively searching for bolt-on acquisitions. That quest came true both quickly and with an "Oomph!" as the Swiss giant struck an $8.7 billion deal to buy AveXis. The move—at a huge price and premium—is an attempt to position the company as a leader in the gene therapy sector.
The purchase gives Novartis control of a Phase III gene therapy treatment for the rare neuromuscular disorder spinal muscular atrophy, SMA candidate AVXS-101. Most of the infants/children in a small, early-phase trial of the SMN1 gene therapy are still talking and sitting unassisted. AVXS-101 will compete with BIIB/IONS' Spinraza. Like other future gene therapy compounds, AVXS-10 has the potential of a one-shot treatment, and the FDA has presented AveXis with a rapid path to market. A BLA filing is expected soon and approval could come later this year should data from the 15- patient pivotal study look good. Novartis will emerge from the takeover as a leader in both CART cell therapy and AAV9 gene therapy, two of the most promising fields in biotech.
The NVS/AVXS deal reversed the current selloff or rather bloodbath in biotech stocks, as we believe more takeovers are well in the works, and investors await any upcoming deals—and they are usually announced on Monday mornings. It also sparked a jump in gene therapy stocks such as Spark Therapeutics Inc. (ONCE:NASDAQ), Crispr Therapeutics AG, Intellia Therapeutics Inc. (NTLA:NASDAQ) and what I believe to be the most undervalued and most advanced among the class—Medical Technology Stock Letter recommendation Sangamo BioSciences Inc. (SGMO:NASDAQ). In addition, rumors emerged that Celgene Corp. (CELG:NASDAQ) may pull the trigger and, like its recent $9 billion Juno Therapeutics acquisition, buy current partners Jounce Therapeutics Inc. (JNCE:NASDAQ) and Agios Pharmaceuticals Inc. (AGIO:NASDAQ). With the $12 billion Gilead Sciences Inc. (GILD:NASDAQ)/KITE deal from last summer, sizable M&Amp;A in early stage companies have reached the juggernaut $9-12 billion range sort of regularly these days.
FINANCING: There's A Ton of Money Out There!
With $9 billion of public biotech money coming from the AVXS acquisition, plus another $855 million for ALXN's Wilson purchase, biotech is flush with cash for funding, collaborations and public and private stock investment. French CAR-T specialist Cellectis closed a $164 million U.S. public offering, with roughly $100 million of the new money will be used for a manufacturing plant for its CAR-T candidates. After Genentech passed over its option to acquire Constellation Pharmaceuticals, the closely held, immuno-oncology company raised $100 million that will fund a cancer epigenetics candidate through clinical trials, as well as advance several pipeline prospects.
Cambridge, Mass.-based Unum Therapeutics (UMRX) went public at the low-end of a $12-14 range, raising $62 million at $12 per share after some FDA holds were finally lifted. The company is continuing its trials for ACTR087, its antibody-coupled T cell receptor, in combo with Rituxan for patients with relapsed or refractory B cell non-Hodgkin lymphoma (NHL).
Although not specifically for biotech stocks, Frazier Healthcare Partners has closed another fund worth $780 million that will be used to help established companies accelerate their growth. The new buyout fund is aimed at "profitable healthcare companies in the lower middle market," says Frazier, which typically means platform companies in the healthcare and pharmaceutical services and medical products sectors with operating earnings of between $5 million and $50 million.
With takeover fever in full gear, the EASL and AACR meetings now, ASCO titles coming up and Q1/18 calls all beginning shortly, there is a sense that some better near-term action is taking place. However, don't forget how strong the short sellers hit the sector in March/early April. Finally, the charts are telling us the momentum players/traders, as fickle as they are, may be returning as well.
Nektar Expands Immuno-Oncology Pipeline with Phase I/II '262/'214 Combo Trial, '181 FDA Filing Up Next
Nektar Therapeutics (NKTR:NASDAQ) has begun dosing patients in the Phase I/II REVEAL trial testing the NKTR-262 and NKTR-214 in solid tumors. NKTR-262 is a novel toll-like receptor (TLR) agonist designed to induce the body's innate immune response and create antigen-specific T cells to fight cancer. NKTR-214 is designed to activate the adaptive immune system to expand and proliferate these specific cancer-fighting T cells in the tumor microenvironment. NKTR has rapidly become a leader in the I/O space with '262 representing another exciting drug development candidate to enter human clinical development.
Another wholly owned asset, NKTR-262, promotes TLR activation to induce the development of antigen-specific immunity by initiating the process by which the immune system generates antigenspecific cytotoxic T cells to the patient's specific tumor. NKTR-214 targets CD122 specific receptors found on the surface of these cancer-killing immune cells, known as CD8+ effector T cells. By first generating antigen-specific cytotoxic T cells with NKTR-262 and then growing these CD8+ effector T cells with NKTR-214, the patient's entire immunity cycle can potentially be engaged to fight cancer.
Phase I/II REVEAL Trial
REVEAL is an open-label, multicenter, dose escalation and dose expansion trial evaluating the combination of NKTR-262 administered as an initial intratumoral injection followed by NKTR-214 administered as an IV infusion systemically (doublet). The study also may evaluate the doublet combination with a PDL-1 (triplet). During the dose escalation phases, recommended Phase II dose (RP2D) regimens of the doublet and/or triplet combinations will be established. Following dose escalation, the dose expansion phase will evaluate the doublet and/or triplet combinations in up to 350 patients who have been diagnosed with a range of locally advanced or metastatic cancers including melanoma, Merkel cell carcinoma, triple-negative breast cancer, ovarian cancer, renal cell carcinoma, colorectal cancer, urothelial carcinoma, and sarcoma.
The start of this internally developed combo trial is a testament to NKTR's transformation into an immune oncology powerhouse. '262 is an intriguing drug development candidate and the potential to combine it with '214 and a PDL-1 to create a triplet therapy is quite promising. In our view, '214's strong clinical showing to date bodes well for the '262 combo and the PDL-1 triplet therapy.
Separately, NKTR-181 is poised to deliver another key catalyst for Nektar as the NDA filing is expected in April. This non-addictive opioid has the potential to be a multi-billion-dollar blockbuster drug and is still 100% owned by Nektar.
Nektar is a BUY under $95 with a Target Price of $120.
John McCamant is the editor of the Medical Technology Stock Letter, a leading investment newsletter. McCamant has spent more than 25 years on the front lines of biotechnology investing. He has established an extensive network that includes contacts throughout the investment banking and venture capital communities. His expertise in biotechnology investments is a subject of media interest. He is frequently consulted and quoted by The Washington Post, Reuters, Bloomberg, CBS and Marketwatch.
1) John McCamant: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Sagamo and Nektar. I personally am or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
Disclosures from Medical Technology Stock Letter:
The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representations or warranty, express or implied, is made as to the accuracy or completeness. In no way shall this newsletter be construed as an offer to sell or solicitation of an offer to buy any securities. The publisher and its associates, directors or employees may have positions in, and may from time to time make purchases or sales of, securities mentioned herein. We cannot guarantee and you should not assume that future recommendations will equal the performance of past recommendations or be profitable.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release on the Investorideas.com newswire http://www.investorideas.com/News-Upload/
Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: http://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.