Biotech Stock Roundup: Biogen Tops Q3 Earnings, Gilead's CAR T Drug Gets FDA Nod

Biogen’s BIIB third quarter results surpassed both top-and bottom-line expectations. Meanwhile, Gilead’s GILD CAR T therapy gained earlier-than-expected FDA approval. Alexion ALXN also got a regulatory boost with the FDA expanding the label of the company’s flagship product, Soliris.

Recap of the Week’s Most Important Stories

Biogen Beats on All Fronts: Although Biogen’s third quarter results were better than expected with the company surpassing both earnings and revenue expectations, shares were down 3.9% on concerns regarding the company’s multiple sclerosis franchise sales as well as U.S. sales of its recently launched spinal muscular atrophy (“SMA”) treatment, Spinraza. Spinraza U.S. sales were $198 million in the third quarter, more or less flat from second quarter sales of $195 million though the company reported a 75% increase in the number of patients on therapy in the United States compared to the end of the second quarter. However, second quarter sales included inventory buildup of $30 million (Read more: Biogen Tops Q3 Earnings & Sales, Spinraza Sales Up).

Biogen has gained 11.3% year to date, outperforming the industry’s 8.2% rally.

Gilead CAR T Therapy Yescarta Approved: Gilead’s Yescarta, which became a part of the company’s portfolio following the $11.9 billion Kite Pharma acquisition, gained FDA approval for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy. This makes Yescarta the first chimeric antigen receptor T cell (CAR T) therapy to gain approval for use in this patient population.

Yescarta is the second gene therapy to gain approval in the United States, the first being Novartis’s Kymriah. Both treatments come with a Boxed Warning regarding the risks of cytokine release syndrome (“CRS”) and neurologic toxicities.

Yescarta’s approval is a major boost for Gilead which is currently facing declining sales from its hepatitis C virus (“HCV”) franchise. According to information provided by the company, diffuse large B-cell lymphoma (DLBCL) is the most common aggressive non-Hodgkin lymphoma (“NHL”) - about 7,500 patients with refractory DLBCL are eligible for CAR T therapy every year. Yescarta represents a new treatment option for these patients who have run out of treatment options and face a poor prognosis. Yescarta will be launched with a list price of $373,000 in the United States and is currently under review in the EU where a response is expected in the first half of 2018 (Read more: Gilead CAR-T Therapy Yescarta Clinches FDA Approval).

Gilead also announced phase II results on its investigational treatment for nonalcoholic steatohepatitis ("NASH"). The company said that the higher dose (20 mg) of GS-0976, an oral ACC inhibitor, achieved significant reductions in buildup of fat in the liver and a noninvasive marker of fibrosis (TIMP-1) compared to placebo. However, statistical significance was not achieved for other parameters like liver stiffness (by FibroScan and MRE), serum ALT and PIII-NP, a serum marker of fibrogenesis. Meanwhile, differences between the lower dose (5 mg) of GS-0976 and placebo were not statistically significant.

Celgene Hit by Crohn’s Disease Study Discontinuation: Celgene’s CELG shares were down 10.8% on news that the company will be discontinuing studies (phase III REVOLVE study and the extension study (SUSTAIN)) being conducted with its investigational Crohn’s disease drug, GED-0301 (mongersen). The decision was based on a recommendation from the Data Monitoring Committee in October following an interim futility analysis. No meaningful safety imbalances were observed in the analysis.

Celgene also said that it will wait to review the full dataset from the phase II ulcerative colitis study on GED-0301 before deciding the path forward. The company will not be initiating the phase III DEFINE study for Crohn’s disease (Read more: Celgene Down on Discontinued Crohn's Disease Drug Study).

AbbVie Announces Immuno-Therapy Focused Deals: AbbVie ABBV announced a couple of deals this week. While one deal is focused on immuno-neurology, the other is focused on immuno-oncology.

The immuno-neurology deal will see AbbVie collaborating with Alector for the use of the latter’s immuno-neurology discovery platform for innovative new therapies for Alzheimer's disease and other neurological disorders.

Immuno-neurology, a rapidly evolving scientific area, is focused on harnessing the power of the immune system to attack neurodegenerative disorders like Alzheimer's disease.

While development and commercialization costs as well as profits will be shared equally by the companies, Alector will get an upfront payment of $205 million and a potential, future equity investment of up to $20 million.

Meanwhile, the immuno-oncology deal will see AbbVie teaming up with Harpoon Therapeutics for the use of Harpoon's tri-specific T-cell activating construct (TriTAC) platform with AbbVie's research-stage immuno-oncology targets to develop cancer therapeutics (Read more: AbbVie Inks Immuno-Oncology Deal with Harpoon Therapeutics).

Label Expansion for Alexion’s Soliris: The FDA granted approval to Alexion for the use of its flagship product, Soliris (eculizumab) in adult patients with generalized myasthenia gravis (gMG) who are AchR antibody-positive. Soliris, already approved in the United States for serious ultra-rare disorders like paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic syndrome (aHUS), brought in sales of $1.6 billion in the first half of the year. The gMG indication represents incremental growth opportunity for Soliris.

Alexion is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The NASDAQ Biotechnology Index declined 3.9% over the last five trading sessions. Among major biotech stocks, Celgene lost 13.3% reflecting a sell-off following the Crohn’s disease update while Biogen was down 8.3%. Over the last six months, Vertex VRTX was up 28.4% while Celgene was down 2.3% (See the last biotech stock roundup here: Exelixis Soars on Priority Review, FDA Panel Supports Spark Drug).

What's Next in the Biotech World?

This week, companies like Amgen AMGN, Vertex, Alexion, Gilead, Celgene and AbbVie will be reporting third quarter results.

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