Isis Pharmaceuticals (NASDAQ:ISIS)
Shares of Isis were up 5% on May 4, 2015 after the company announced that Bayer AG (OTCMKTS:BAYRY) bought a license for an anti-clotting drug known as ISIS-FXRIx. This deal is more of a huge win for Isis as it continues to develop a multitude of RNA antisense drugs in many unmet medical needs. The reason being is that Isis is expected to receive an upfront payment of $100 million dollars for this deal. But it doesn’t stop there because Isis will also receive near-term payments of $155 million dollars and the possibility for another $55 million dollars upon an execution of a phase 2 study in patients with compromised kidney function.
Although Isis is not clear in the woods quite yet because it will have to finish the current trials for the anti-clotting drug ISIS-FXRIx. Once those trials are done then Bayer will takeover and be responsible for all clinical trials, regulatory approvals, and ultimately commercialization of the drug in the open market. The reason why Bayer has agreed to license this drug from Isis is because it goes well with the company’s thrombosis pipeline.
Thrombosis is a disease characterized by a person achieving a blood clot that either causes a life threatening stroke or heart attack. Thrombosis can take place either in a patient’s arteries or veins and should be taken care of immediately upon diagnosis. Current therapy for patients with thrombosis relies upon anti-coagulant drugs but many patients can’t take them because of the high risk of internal bleeding. Bayer will run additional trials for ISIS-FXRIx in which the company can attempt to replace anti-coagulants with Isis’ drug instead. These trials will take a long time to pan out, but the time will be worth it and the market will be huge if they can be successful.
Alexion Pharmaceuticals (NASDAQ:ALXN)
On May 6, 2015 Alexion announced that it bought a rare-disease drug maker Synageva (GEVA) for $8.4 billion dollars in both a cash and stock type deal. Investors of Alexion weren’t too fond of the deal claiming that the company paid way too much to acquire Synageva. These investors were right because Alexion paid a 140% premium to buy Synageva just to be able to acquire a few rare disease drugs in the pipeline. Of course on the other hand Synageva shareholders were thrilled for the deal as the company’s shares more than doubled in share price to close at $203 per share the very same day.
Synageva creates drugs that treat rare diseases with limited to no treatment options available to patients. The most advanced drug in Synageva’s pipeline is a drug known as Kanuma which treats lyposomal Acid Lipase — LAL. This disease occurs when patients experience a buildup of fat in both the liver and blood vessels of the body. This leads to life-threatening complications including mortality.
Rare disease drug makers seem to be acquired by big pharma companies at an alarming rate lately and that’s probably thanks to the fact that these companies develop drugs worth a lot of money. Because these diseases are rare there are hardly any treatment options available for these patients. When a small-cap biotechnology company creates a perfect treatment they have no competition whatsoever which leads them to announce very high prices for these drugs. Right now there is no clear indication on the price for Kunamo in the future, but many analysts are speculating that the drug could cost as much as $350,000 per year per patient.
Kanuma has an FDA review date of September 2015 because the treatment regimen was given FDA priority review. Drugs given FDA priority review get a quicker review time than those without it. FDA approval would be a huge uplift in value, although the U.S. is not the only territory for regulatory approval for Kanuma. The Europe-Medicines Agency is also expecting to decide on whether to approve Kanuma or not in the European territories as well. With both of these approvals Kanuma would be in a great position to create value for Alexion.
La Jolla Pharmaceuticals (NASDAQ:LJPC)
On May 7, 2015 La Jolla Pharmaceuticals announced that it is doing a portfolio change of drug compounds. The company reported that it will discontinue its GCS-100 drug and its LJPC-1010 drug because of new replacement therapies obtained. GCS-100 deals with chronic kidney disease and the company will complete the phase 2b trial to completion but will not continue the compound itself through the clinic. LJPC-1010 was supposed to begin a trial this year in the NASH — non-alcoholic steatohepatitis — indication but the company will not initiate the phase 1 trial now due to this portfolio change. Respectively both programs are being shelved for now but the company states that it will attempt to out-license these drugs for continuation.
Although La Jolla will continue its main phase 3 drug angiotensin II that is currently treating patients with catecholamine-resistant hypotension — trial known as LJPC-401. The new drug priority for the drugs listed above changed because the company was able to acquire next-generation gentamicin product candidates for the potential treatments of bacterial infections and genetic disorders respectively. These drug product candidates are known as LJPC-30Sa and LJPC-30Sb. Lajolla acquired the rights to this compound from the Unviersity Research and Technology Center. La Jolla has already spoken to the FDA on these new programs and may begin phase 1 trials upon submission of an IND to the FDA.