Shares of Horizon Pharma ended the day up 18% on March 30, 2015 after the company announced that it would acquire Hyperion Therapeutics (NASDAQ:HPTX) for $955.7 million dollars. Although one thing to note is that this deal for $955.7 million dollars will be a mix of a cash and debt deal. The final share price in which Hyperion is being bought out for is for $46 per share, which is a 7% premium from the previous trading day close. Why would Horizon decide that it would be a good idea to buy Hyperion for so much money?
Well Horizon has a substantial amount of products in arthritis pain and inflammation — about four products — but they have started off with one product in the orphan drugs space known as ACTIMMUNE. ACTIMMUNE is an interferon gamma-1b product that targets both an immunity system disorder and osteoporosis. With this acquisition of Hyperion, Horizon adds two new orphan drugs to its pipeline known as Ravicti and Buphenyl. Both of these drugs target a rare disease known as Urea Cycle Disorder — UCD. UCD is whereby the patient is unable to transfer urea into urine and then allow the body to empty this waste. This waste builds up in the body as nitrogen which creates a toxic ammonia that the body doesn’t tolerate.
How bad can a build of ammonia in the body be? Well pretty bad considering that the possibility of having this disease causes irreversible brain damage and even death. Both Ravicti and Buphenyl have done well to inhibit UCD and sell well in the market place. Ravicti has generated about $30.8 million for revenue in 2014 and Buphenyl has generated about $113.6 million in revenue for 2014. Once the acquisition is completed Horizon expects the earnings of both Ravicti and Buphenyl to add about $100 million dollars or more to the company’s bottom line revenue in 2016.
Shares of Intrexon Corp ended the day up around 8% on March 30, 2015 after the company announced that it would form a partnership deal with Merck Serono — German pharmaceutical company with no relation to Merck (NYSE:MRK)— to develop CAR-T programs. Lately there have been some collaborations on the biotechnology front but nothing that is eye-popping generally speaking. Although according to the terms of the agreement Intrexon will receive an upfront payment of about $115 million dollars. Well that’s quite a lot of money to get upfront but wait it gets better, because in addition to the upfront payment Intrexon also has the possibility to receive an additional $826 million dollars reaching certain clinical milestones.
With that news in mind many are probably pondering ” What are CAR-T?”. Well CAR-T stands for chimeric antigen receptor T-cell, and is engineered to kill cancer cells. These engineered T-cells kill cancer, but they do so without the patient needing to receive an additional toxic drug that kills off every cell in the body. The CAR-T technology trains T-cells, that are built with synthetic receptors, to bind to cancerous cells and then activate on impact. This means that all the healthy cells in the human body are avoided leading to the possibility to target these cancers without the need for additional chemotherapy to go along with it. Although I would say be cautious when investing in the CAR-T immunotherapy space because its is becoming a very crowded space. In addition this CAR-T technology is new so there are a lot of risks going forward such as whether it can work in larger phase III trials in cancer patients.
Sarepta Therapeutics (NASDAQ:SRPT)
Shares of Sarepta Therapeutics were up about 6% on March 31, 2015 after the company announced the resignation of its CEO Chris Garbedian. The board of directors more than likely probably nominated that Chris Garbedian be removed as CEO. There is no clear evidence but Sarepta in the past has had a lot of trouble interacting with the FDA to get Eteplirsen, the company’s duchenne muscular dystrophy drug, approved. The primary reason for the scuffle that Sarepta has had in talks with the FDA is because of Chris Garbedian. He is very vocal and has pretty much strained any relationship with the FDA. There are times though where a company must opt for the non-popular choice to achieve its goal and sadly this needed to be done to bring Sarepta back in the game with the FDA for the approval of Eteplirsen.
For now Sarepta is going to take the route of temporarily promoting the company’s chief medical officer Ed Kaye as the interim CEO and Sarepta may even keep him in that position if he would like to stay in it. You are probably asking by now if you haven’t already ” What the heck is Eteplirsen?”. Eteplirsen is a drug by Sarepta used to treat duchenne muscular dystrophy — DMD — as mentioned above. DMD is an inherited disorder where the patients’ muscles start to deteriorate over time and get progressively worse as the patient ages. The cause for the disease is believed to be caused by the fact that the body is not producing enough dystrophin protein levels in the muscles. Because of this problem these kids that inherit the disease are stuck in wheelchairs early on in life and don’t have a lot of muscle movement.
Sarepta now states that it will be able to file its New Drug Application — NDA — for Eteplirsen by the middle of 2015. We will have to wait and see if this deadline is kept and if the company keeps its dialogue with the FDA on good terms. For now the company has a lot to go on because the trial evaluating Eteplirsen in DMD patients achieved the primary endpoint of creating dystrophin for these patients. This primary endpoint was evaluted by performing muscle biopsies on these patients at the 48-week mark. I believe that despite this temporary setback with the CEO resignation the company will more than likely eventually get its approval for Eteplirsen. Keep in mind though that as with any other drug approval by the FDA there are still inherent rejection risks.
Medivation (NASDAQ:MDVN) & Astellas Pharma Inc. (OTCMKTS:ALPMY)
On April 2, 2015 both Medivation and Astellas announced positive results for their phase 2 trial testing Xtandi — first known as enzalutamide — in patients with castration-resistant prostate cancer. The phase II trial known as “STRIVE” tested Xtandi against Astrazeneca (NYSE:AZN) drug casodex — first known as bicalutamide. The trial enrolled about 396 castration-resistant prostate cancer patients who either had the cancer spread to other parts of the body or who had failed with previous standard of care therapy. Castration-resistant prostate cancer is where the cancer is localized in other parts of the body besides in the prostate of the patient.
The STRIVE trial set the primary endpoint as progression-free survival — PFS. The PFS is a measure used to determine the amount of treatment cycle a patient takes without their cancer advancing to a later stage. The trial met the primary endpoint easily. Xtandi was able to achieve a PFS of 19.4 months while Casodex only achieved a PFS of 5.7 months. While it is good for the company and investors to celebrate it is still far from being over. That is because Medivation and Astellas will now have to run a confirmatory phase III trial in a larger group of patients, probably around 1,000 patients or more. In addition this trial could possibly take up to three years to determine efficacy with this patient population so it will be a long wait.