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Pharma Stock Roundup: Achillion Slumps on End of HCV Deal, Teva Gets a New CEO

Arpita Dutt

Several important developments were reported this week with key highlights including the termination of a hepatitis C virus deal, the approval of the first cancer biosimilar in the United States and the presentation of data by companies like Pfizer PFE and Bristol-Myers Squibb BMY among others.

Recap of the Week’s Most Important Stories

Achillion Down on HCV Deal Termination: Achillion Pharmaceuticals’s ACHN shares fell on the termination of the company’s partnership agreement with Johnson & Johnson’s Janssen Pharmaceuticals for hepatitis C virus ("HCV"). Janssen said that it will not continue with the development of JNJ-4178, a combination of three direct acting antivirals: AL-335, odalasvir and simeprevir. The decision to discontinue development does not come as a big surprise given the intense competition and pricing dynamics in the HCV market. Achillion intends to focus on the development of advanced multiple small molecule factor D inhibitors of the complement alternative pathway (Read more: Achillion's HCV Partnership with J&J Terminated, Stock Falls).

First Cancer Biosimilar Gets FDA Nod: The FDA approved Allergan AGN and Amgen’s Mvasi, a biosimilar version of Roche’s blockbuster cancer drug, Avastin (bevacizumab). Mvasi can be used for all eligible indications of the reference product. Approval was in line with expectations considering the favorable vote the biosimilar got from an FDA advisory panel recently. The approval is quite a boost for the companies as well as the effort to lower drug prices though so far biosimilars are yet to make a significant dent in referenced product sales in the United States. Mvasi is under review in the EU.

Pfizer’s Xtandi PROSPERs in Late-Stage Study: Pfizer and partner Astellas Pharma could well be on the path to boost sales of their prostate cancer drug, Xtandi, with the companies announcing positive top-line data from a late-stage study (PROSPER) in patients with non-metastatic (M0) castration-resistant prostate cancer ("CRPC"). The companies plan to discuss this data with regulatory authorities for the expansion of the drug’s label. Xtandi sales, which have been under pressure, should receive a boost on approval for this patient population.

Bristol-Myers Signs Deal, Presents Cancer Data: Bristol-Myers Squibb presented data at the European Society for Medical Oncology ("ESMO") 2017 Congress showing that treatment with Opdivo led to superior recurrence-free survival (35%) compared to Yervoy in patients with resected high-risk melanoma (Read more: Bristol-Myers Reports Positive Results from Melanoma Study).

Meanwhile, the company has signed a deal with Halozyme for the latter’s ENHANZE technology. The global collaboration and license agreement is focused on the use of Halozyme’s technology for the subcutaneous administration of Bristol-Myers’s immuno-oncology drugs thereby providing patients with more flexible and convenient treatment delivery options.

Bristol-Myers will shell out $105 million upfront plus make future milestone and royalty payments. The dilutive transaction is expected to hit Bristol-Myers’s 2017 and 2018 earnings by a penny and 2019 earnings by five cents.

Lilly’s Baricitinib Fares Well in Mid-Stage Eczema Study: Eli Lilly and Company LLY and Incyte presented new safety and efficacy data from a mid-stage study on baricitinib for eczema at the annual meeting of the European Academy of Dermatology and Venereology ("EADV"). Baricitinib, when combined with a mid-potency topical corticosteroid ("TCS"), significantly improved the signs and symptoms of eczema compared to TCS alone. The companies intend to commence a phase III program for the eczema indication later this year. Baricitinib is currently approved in the EU under the trade name Olumiant for moderate-to-severe-active rheumatoid arthritis. However, approval is yet to come in the United States where a regulatory filing will be resubmitted by Jan 2018. Lilly stock has gained 12.9% year to date, compared to the 16% rally of the industry it belongs to.

Teva Appoints New CEO: Teva TEVA has finally ended its search for a Chief Executive Officer (“CEO”) with the company announcing the appointment of Kare Schultz as the company’s President and CEO. A seasoned veteran in the healthcare industry, Schulz will bring with him almost thirty years of experience in this segment. Schulz was recently serving as the President and CEO of H. Lundbeck A/S, where he was responsible for implementing significant restructuring initiatives and launching a robust turnaround strategy. Schulz has a daunting task ahead of him considering the challenges being faced by Teva including generic pricing erosion. The company needs to work on paying down debt, divesting non-core businesses to increase focus on core areas and generate cash, delivering on the pipeline and getting the U.S. generics business back on track (Read more: Teva Hires Kare Schultz as CEO: Is a Recovery in the Cards?).

Positive FDA Panel Vote for Glaxo’s Shingles Vaccine: GlaxoSmithKline GSK got a positive vote from the FDA’s Vaccines and Related Biological Products Advisory Committee (“VRBPAC”) for Shingrix for the prevention of herpes zoster (shingles) in adults ages 50 and over. Given the positive vote, chances of gaining approval look pretty high. We note that Merck’s Zostavax, a live attenuated virus vaccine is currently available for the prevention of shingles in the same patient population (Read more: Glaxo's Shingles Candidate Gets Positive FDA Committee Vote).

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

Performance

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

The NYSE ARCA Pharmaceutical Index was up 2% over the last five trading sessions. Almost all major stocks recorded gains with Pfizer gaining 5.1% while Bristol-Myers slipped 0.2%. Over the last six months, Bristol-Myers was up 12.2% while Glaxo declined 0.9% (See the last pharma stock roundup here: Lilly to Cut Jobs, Streamline Operations, NVS CEO to Step Down in 2018).

What's Next in the Pharma World?

Watch out for the usual pipeline and regulatory updates. An FDA advisory panel will be meeting on Sep 19 to discuss the supplemental new drug application (sNDA) submitted by Pfizer for its cancer drug, Sutent, for the adjuvant treatment of adult patients at high risk of recurrent renal cell carcinoma (“RCC”) following nephrectomy (surgical removal of the cancer-containing kidney). Moreover, an FDA decision regarding the label expansion of Merck’s anti-PD-1 therapy, Keytruda, for use in the treatment of recurrent or advanced gastric or gastroesophageal junction adenocarcinoma, should be out by Sep 22.

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