The Readout Damian Garde

Is the market misreading Intra-Cellular Therapies?

Yesterday afternoon, the FDA canceled a meeting of outside experts scheduled for July 31 that was expected to review Intra-Cellular’s schizophrenia drug lumateperone. Why cancel? Because the FDA received “new information regarding the [lumateperone] application,” the agency said.

Investors were quick to interpret the nixed advisory panel meeting — and the vague explanation — as a negative. Intra-Cellular shares fell 30% on fears that FDA was leaning toward rejecting lumateperone.

But as Adam Feuerstein noted, there might also be a more benign explanation: The “new information” might have convinced the FDA to approve lumateperone, thereby making hearing from the advisory panel meeting moot.

Without further details, we’re all just guessing, but biotech is never boring.

Pharma hates the Senate drug pricing bill but it could be worse

The Senate Finance Committee’s long-awaited drug pricing bill saw daylight yesterday, and it comes with a cap on price hikes, a ceiling on out-of-pocket costs, and a dramatic reformation of how Medicare pays for drugs.

As STAT’s Lev Facher and Nicholas Florko report, that’s all anathemic to PhRMA, which said the bill would “siphon more than $150 billion from researching and developing new medicines.

But Umer Raffat, an analyst at EvercoreISI, ran some numbers and found that for treatments that cost less than $17,000 a year — which includes the biggest diabetes drugs — the industry would actually come out ahead with the proposed changes to Medicare. However the opposite would be true for many oral cancer drugs, which generally cost more than $100,000 a year, leaving drug makers in the hole.

Read more.

Biogen's good news gets a yawn on Wall Street

Biogen reported stronger-than-expected sales from its multiple sclerosis drug franchise, contributing to an even stronger boost to earnings in the second quarter and a guidance raise for the rest of the year. The market, however, was rather underwhelmed. Stifel analyst Paul Matteis called Biogen’s earnings report a “non-thesis changing beat and raise.”

Biogen’s lingering problems refuse to go away. Earnings were good, but were also boosted by a one-time tax benefit and lower operating expenses. Biogen isn’t spending a lot of money on Alzheimer’s disease clinical trials any longer — as you may have heard.

More importantly, sales of Spinraza, the company’s blockbuster treatment for the neuromuscular disease SMA, lagged expectations for the second straight quarter. Biogen management insisted the recently launched SMA gene therapy Zolgensma didn’t have a negative impact on Spinraza sales, but no one expects that to continue. If Zolgensma turns out to be a bust, Roche’s SMA pill — approvals coming next year — won’t be.

With Spinraza sales at risk and the multiple sclerosis drug Tecfidera facing the possibility of generic competition as early as 2021, Biogen is in desperate need for new growth. The company has a decent pipeline but it’s populated mostly with early stage (and risky) products. So, Biogen still has work to do.

Biotech is just swimming in money right now

Biotech is famously cyclical, with tides that tend to raise and sink all boats just as quickly. But right now, according to data from SVB Leerink, things are going pretty well.

Over the past 12 months, about $177 billion has found its way back to investors’ pockets thanks to buyout deals, and 36% of that sum has come in the form of premiums, dollars that exceed a company’s share price before the takeout. Over the same period, $28 billion has flowed into IPOs and follow-on offerings, suggesting to SVB Leerink’s Geoffrey Porges that there’s a virtuous cycle at work.

There’s no way to be sure those cash-laden investors are putting their gains into buying new equity, but “the magnitude of these liquidity events could explain the surprising durability of the capital markets cycle in the sector,” Porges wrote. The other side of that token, of course, is that if the generally unpredictable pace of buyouts slows down, so too could the demand for IPOs and FOs.

More reads

  • It may be time to revoke approval of Acadia Pharma’s anti-psychosis drug. (STAT Plus)
  • Study: Higher cost of new cholesterol drugs putting patients at risk. (HealthDay)
  • Merck unveils early data on HIV drug it says could be ‘a game changer.' (STAT)
  • Myovant’s uterine fibroid drug meets goals in trial, setting up competition with AbbVie. (STAT Plus)

Thanks for reading! Until tomorrow,


Wednesday, July 24, 2019


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