I ran across a great piece from Luke Timmerman of xconomy.com (@luketimmerman) about Twitter and its impact on the biotech industry, especially when it comes to news flow, investing, and skirting the unclear grey line of FDA and SEC regulations. Check out his piece (here) and some of my favorite follows on Twitter.
Adam Feuerstein of TheStreet.com @adamfeuerstein
John Carroll of Fierce Biotech @JohnCFierce
Martin Shkreli- Hedge Fund Manager @MartinShkreli
Bruce Booth- Atlas Ventures @LifeSciVC
Debra Sherman- Reuters @DLSherman
Matthew Herper- Forbes @matthewherper
Nathan Sadeghi-Nejad -Forbes/TheStreet @natesadeghi
And you can follow me as well @bryceistvan. You just have to be willing to put up with the Seattle Mariners tweets mixed in.
In its earnings, reported on August 5th, NPS management informed the public that they had received a tenative advisory commitee date that was past the September 30th PDUFA date. "The company has received a tentative date for an advisory committee meeting from FDA that is after September 30, 2012. A definitive date for the advisory committee meeting is expected to be published by FDA approximately 30 days prior to such meeting. Given the timing of the anticipated advisory committee meeting, the company does not expect a decision on the Gattex NDA from the FDA before the fourth quarter of 2012."
The next published tentative meeting date for the gastrointestinal advisory commitee is October 15th. This is the last tentatively scheduled meeting for 2012, so it is almost guaranteed that this is the date that Gattex will be discussed. Using this timeline, assuming that the vote is overwelminging positive as I expect, look for Gattex to get FDA approval sometime in November or early December. If a standard 3 month delay is issued by the FDA, the new PDUFA date will be December 31st falling in line with that target.
I am still long NPSP and short NPS out of the money August calls on 2/3rds of my position. Given the extension, I will likely sell September out of the money calls and then hold without calls through the Ad Comm and PDUFA dates.
NPS Pharma (NPSP), which I have written about previously and hold in my personal portfolio, reported on Friday along with its partner Takeda (TKPYY) that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency has recommened granting a marketing authorization for teduglutide (Europe: Revestive®, US :Gattex) as a once-daily treatment for adult patients with short bowel syndrome. Takeda holds the ex-North America rights, while NPSP retains the rest including U.S. The CHMP approval paves the way for approval throughout the European Union.
The FDA has provided a PDUFA date of September 30th for U.S. approval. However, NPS expected the FDA would hold a gastrointestinal advisory committee meeting for the drug, which is not currently on the agenda for the August 28th meeting. This does lead to some concern that the FDA could delay a decision until after the October advisory committee meeting.
In addition to Gattex, NPS presented data on Natpara, a drug for hypoparathyroidism, at the ENDO conference this past weekend. NPS met with the FDA at the end of May for a pre-BLA meeting. The company expects to file the BLA "in the second half of 2012." From that filing the FDA will determine whether to provide a standard 10 month or priority 6 month review. NPS has stated they hope to receive priority review due to Natpara's orphan drug status. However, Gattex did not receive a priority review despite being an orphan drug.
Anyone actively involved in the biotech Twitter or blogosphere knows the saga of Jeremy Richards, Keryx Biopharmaceuticals (KERX) and AEterna Zentaris (AEZS). After Richards published this article, essentially promising that the drugs would be approved and claiming large share purchases by the mysterious "Dr. Williams," shares skyrocketed much to the disgust of many professional analysts. Today, the two companies lost 2/3rds of their value when they announced that their colorectal cancer drug perifosine did not increase overall survival in its phase 3 trial. Adam Feuerstein of TheStreet.com wrote a great article today outlining the drug failure and the warning signs.
Today's news is yet another warning to make sure you do your due diligence, don't listen to pump-and-dumps, and always understand the risks.
Healthcare IT has become a major area of investment as countries and companies look to drive down healthcare costs while improving outcomes. Once driven by small startups, some of the big names in enterprise software are quickly jumping into the space. In February, Microsoft (MSFT) and General Electric (GE) announced they were forming a joint venture aggregating both companies' technologies, looking to become a one stop shop for healthcare providers. See my Seeking Alpha article on the announcement.
This trend of big players making acquisitions is likely to continue over the next several years. Since most of these smaller IT companies are private, it is hard for individuals to take part. One possible way to play is through investments in VC firms. This can be accomplished through direct investments in funds by high net worth investors, or through the purchase of publicly traded VC firms such as Safeguard Scientifics, discussed in my Seeking Alpha article "Life Science Venture Capital for Retail Investors". Safeguard has exposure to numerous life science and technology companies including a 40% stake in AdvantEdge Healthcare Solutions, a medical billing and practice management software company.
I am currently long MSFT and GE.
Two A named biotechs came out with very different news sets, driving 20% and 60% moves in opposite directions. Aastrom (ASTM) announced that they had received $40mm in funding from Eastern Capital with incredibly favorable terms. Eastern Capital is buying prefered shares with an 11.5% dividend, convertible in 5 years at a price of $3.25/share. Most importantly, the company did not have to give any warrants nor provide Eastern Capital with a board seat. Aastrom plans to use the proceeds to fund its Phase 3 trial of ixmyelocel-T for critial limb ischemia (CLI).
Anthera (ANTH) was the other side of the cardivascular coin today, tumbling more than 60% after hours after annoucing that they were halting the Phase 3 trials of Varespladib "due to a lack of efficacy." Anthera does have a few other drugs in its pipeline, including Blisibimod, a lupus treatment that has shown some promising results in Phase 2 trials.
The stock did rebound somewhat from the depths of its selloff, closing after hours at $3.24.
I did quickly trade the Anthera's after hour's rebound from $2.50 to $3.00 but do not currently have a position in either Anthera nor Aastrom.
here. For more info on Network biology see here.
Today I ran across an interesting article about how to manage corporate VC investing from an internal perspective. http://finance.fortune.cnn.com/2012/01/11/corporate-venture-capital/. Additionally, see my Seeking Alpha article "Life Science Venture Capital For Retail Investors" for my take on the role corporate VC investing can play in the life science sector.
The company press release is here, and an article by Adam Feuerstein of TheStreet.com breaking down the results is here.
Getting funding is getting harder and harder for healthcare startups. With FDA approval getting harder and more opaque and the future of insurance caught up in court battles, more and more VC firms are exiting the market. Today CNN Money's Term sheet profiled the problem http://finance.fortune.cnn.com/2011/11/28/pharma-startups-problem/?iid=HP_River.
Coinciding with that article was my latest Seeking Alpha article profiling Safeguard Scientifics (SFE), the venture investment strategies of big pharma, and a few ways for retail investors to get involved in this risky but potentially lucrative market. http://seekingalpha.com/article/310439-life-science-venture-capital-for-retail-investors
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