Conatus Pharma Breaks From Intercept's Shadow?

Bloggers and traders alike are scratching their heads, looking for answers as to why Conatus Pharmaceuticals (CNAT) is up more than 48% intraday today.

Short of any company comments and my own hubris, Premium subscribers over at PropThink.com profitably know why: "Intercept  Isn't the Only Way to Play Liver Disease."

To wit: [excerpt] "Similarly focused on liver disease treatments, Conatus Pharmaceuticals (CNAT) has risen and fallen on parallel developments for Intercept Pharmaceuticals’ (ICPT) obeticholic acid (OCA). A series of favorable emricasan updates in the next 12 months, including Phase 2 updates in patients with nonalcoholic fatty liver disease (NAFLD) or fibrotic nonalcoholic steatohepatitis (NASH), could allow investors to better assess the commercial opportunities of CNAT’s lead compound – and finally free the stock price from Intercept’s shadow."

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Agios Impresses With Leukemia Drug: Investor Beware

Agios Pharmaceuticals (AGIO-$43.35) moved substantially higher in price last month after reporting Phase 1 data demonstrating that its cancer metabolism drug AG-221, a first-in-class inhibitor of IDH2 mutations, generated promising clinical activity, including complete remissions in several patients whose blood cancers harbored the IDH2 mutation. 

What has investors excited is that in addition to being well-tolerated, a “substantial” reduction of plasma 2-HG was achieved: Called an “oncometabolite” for its role in cancer metabolism, the metabolite 2-hydroxygluturate (2HG) is a by-product of the mutated IDH2 gene. The initial findings support the theory that inhibiting mutant forms of IDH2 suppresses the growth of these 2HG-producing tumor cells.

Investors are making the quantum leap – based on a small safety/dosing trial – that curtailing 2-HG supply will normalize gene expression….

Continue reading at PropThink: AGIOS, OF 2013 IPO CLASS, IMPRESSES WITH EARLY ONCOLOGY ASSET

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Biotech Losers of 2013: AVEO, INFI, AFFY, and ARIA -- Where Are They Now?

Despite having lost more than 90% of its market valuation in the last 21 months, AVEO Pharma’s (AVEO-$1.24)  management believes it can drive shareholder creation by moving forward with other early-stage, oncology assets, principally by securing partnerships after providing proof-of-concept data. Though attractive commercial opportunities do exist, even in highly competitive markets, for targeted cancer therapies, we question this management team’s ability to develop their putative “first-in-class clinical assets” following the debacle of the VEGF receptor tyrosine kinase inhibitor, tivozanib, last year.

Read more at PropThink: https://propthink.com/the-market-just-isnt-convinced-the-aveo-nightmare-is-over/

Evolving Phase 1 data presented at the American Society of Hematology (ASH) meeting held in early December 2013 showed not only that earlier safety concerns on Infinity’s (INFI-$9.20) lead asset, IPI-145, had been overblown, but that the drug demonstrated impressive efficacy in patients with either relapsed or refractory CLL (81% of patients had been treated with three or more systemic therapies), too.

Continue Reading at PropThink: https://propthink.com/drugs-disappointed-investors-2013-infinitys-ipi-145/

Unfortunately, we’ll never know the “would of, could of” commercial potential for Affymax’s (AFFY-$0.70) anemia treatment, brand-name Omontys. After posting sales of $34.6 million for the nine-month period ending December 31, 2012 – slightly below analyst forecasts, suggestive of the contract-grip Amgen held on dialysis centers – Omontys was recalled on February 23, 2013 following reports of severe hypersensitivity reactions including anaphylaxis in 0.2% (or about 50 patients) — including fatal reactions in 0.02% of the 25,000 patients –within 30 minutes of their first IV dose in the post-marketing phase. Almost a third of the reported cases required prompt medical intervention and in some cases hospitalization, according to an FDA safety alert issued at the time.

Read more at PropThink: https://propthink.com/fda-approved-drugs-disappointed-2013-affymaxs-omontys/

Though the stock price of Ariad Pharma (ARIA-$7.25) has rallied off its 52-week low of $2.15 per share (October 31, 2013) to the $7.00 level, it still trades significantly below its 52-week high of $23.00 (September 11, 2013). The relief rally has stalled for two reasons:

• Iclusig competes in an already crowded market for just two rare cancers. According to National Cancer Institute statistics, approximately 5,200 new cases of CML and 1,800 new cases of Ph+ ALL are diagnosed each year in the United States; and,
• Ariad has discontinued – after consulting with the FDA – its EPIC trial, which had been designed to investigate the use of Iclusig in the front-line settings.

Continue reading at PropThink: https://propthink.com/fda-approved-drugs-disappointed-investors-2013-ariads-iclusig/

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

AbbVie's IV Lifeline Still Humira

Investors in AbbVie (ABBV-$53.34) are reminded each quarterly earnings release of the continued importance of Humira to the drug maker's success.  AbbVie's flagship drug, an efficacious treatment for autoimmune diseases like rheumatoid arthritis (RA) and psoriasis, contributed $10.7 billion in global sales (56% of worldwide revenue of $18.8 billion) last year.

AbbVie is spending more than 16% of annual sales to develop a pipeline -- including promising treatments for multiple sclerosis, blood cancers, and hepatitis-C (across all patient types) - with the goal of reducing its dependence on Humira. Fortunately, the Chicago-based drug manufacturer has a stable of off-patent, legacy drugs that contribute sizable sales to this R&D effort.

Read more at The Motley Fool: Can AbbVie's Legacy Products Deliver Further Growth?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

AbbVie Hums with Humira

AbbVie (ABBV - $53.10) Chief executive Rick Gonzalez told analysts on the fourth-quarter earnings call that management expects global Humira sales this year will continue growing at a (low) double-digit pace, excluding the impact of foreign exchange. The pursuit of additional indications currently in late stage clinical trials, such as Uveitis (inflammation of the eye and the third leading-cause of blindness), is expected to augment growth too.

Humira – like Johnson & Johnson's (JNJ) Remicade – is a manufactured monoclonal antibody that treats autoimmune diseases by interfering with (blocking) tumor necrosis factor (TNF), an inflammatory protein over-expressed in a wide range of progressive inflammatory disorders that can result in permanent tissue and joint damage over time. 

Could Humira lose share to biosimilars?  Read more at The Motley Fool: AbbVie's Humira Still a Growth Engine

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Pfizer's Strategic Move into Opioid Analgesics

Pfizer's (PFE-$31.93) management stated during the fourth-quarter 2013 earnings call last month that a move toward opioid analgesics and a promising anti-nerve growth factor (NGF) drug in its pipeline, a monoclonal antibody called tanezumab, could help to mitigate the impact Celebrex's loss of market exclusivity will have on sales going forward.

Looking to capitalize on the growing need for abuse-deterrent formulations, Pfizer is looking to entrench itself in the $5.1 billion market for extended-release (ER) opioid formulations prescribed by physicians to chronic pain sufferers (30% of the $18.1 billion in annual sales for all opioid-based therapies). 

Chief executive Ian Read confirmed on the conference call that Embeda, an ER morphine/naltrexone formulation that was voluntarily benched in 2011, would be back on pharmacy shelves in second-quarter 2014 after the FDA approved both an updated manufacturing process and a risk evaluation and mitigation strategy (REMS) – which is now required for all ER and long-acting opioid medications.

Read more at The Motley Fool: Pfizer Stubs Toe Without Celebrex

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Ignore the Zogenix Buzz

Though Zogenix (ZGNX-$3.55) is entering a chronic pain market with estimated annual sales worth an estimated $15.5 billion, the market is saturated with reformulations of well-established short and long-acting products that include generic and branded hydrocodone (e.g. Vicodin), oxycodone (e.g. OxyContin), hydromorphone (e.g. Exalgo), morphine (e.g. Avinza), oxymorphone (e.g. Opana ER), and fentanyl (Duragesic transdermal patch).

Undaunted, chief executive officer Roger Hawley judiciously opines that Zohydro ER has the potential to fulfill an unmet clinical need: similar efficacy to a combination-entity hydrocone that contains the analgesic acetaminophen or ibuprofen, such as AbbVie's (ABBV) Vicoden or Vicoprofen – but without the risk of liver toxicity.

Continue reading at The Motley Fool: Zogenix Stockholders Facing World of Pain?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Progenics Pharmaceuticals: New Front in War Against Cancer

Investors’ bearish sentiment that further testing of the clinical utility of Progenics Pharma’s (PGNX-$5.00) PSMA-ADC might be pointless due to toxicity concerns is unfounded: Robert Israel, MD, one of the study authors and executive vice president of medical affairs at Progenics, pointed out to Medscape Medical News that both of the patients who died had predisposing conditions.

"One had an indwelling central line [known to increase risk of developing sepsis] and the other had repeated urinary tract infections," said Dr. Israel. "The patients were also heavily pretreated and didn't have much in the way of other options."

As a new class of biological therapeutics, the ADC market is still in its infancy. Nonetheless, skeptics might want to spend a Saturday reading up on the managed benefits of these highly potent drugs in the context of understood off-target toxicities.

See more at YCharts: 2 Deaths, 25% Plunge -- And Still A BigUpside

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

The New Old Yahoo Under Marissa Mayer

Yahoo (YHOO-$38.23) continues to fall further behind Google (GOOG) and Microsoft (MSFT) in organic growth for inquiring eyes (and potential customer dollars). In June 2012, the respective share of the U.S. search engine market held by Google, Bing and Yahoo stood at 66.8%, 15.6%, and 13%; data released by comScore for December 2013 showed Google and Microsoft continue gaining voice at Yahoo’s expense: Google and Microsoft expanded their market shares to 67.3% and 18.2% -- while during Mayer’s tenure, Yahoo’s market has fallen further to a 10.8% share.

Revenue slumped for the fourth consecutive quarter at Yahoo, dipping 6% to $1.27 billion in the last three months of 2013, led by a similar 6% decline in all-important display-ad sales to $491 million (as a price-per-ad decline of 7% offset a 3% increase in total number of ads).

Read more at YCharts: The Cards Marissa Mayer Is Holding at Yahoo

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Lobbying Momentum to Drive Pharmacyclics Success?

In addition to hard science, lobbying momentum could be another catalyst driving sales of Pharmacyclics (PCYC-$131.38) new blood cancer drug Imbruvica significantly higher in coming years. The National Comprehensive Cancer Network (NCCN), which is an alliance of leading global cancer centers, issues recommendation protocols reflecting the consensus standard-of-care practices in oncology. Irrespective of formal FDA regulatory approval, an NCCN endorsement can be highly determinative of which therapies are reimbursed by the Centers for Medicare & Medicaid Services (CMS) and private insurers in a given indication. In other words, forget ICD-9 diagnostics codes.

In addition to the formally approved indication of relapsed/refractory MCL, updated NCCN guidelines now already recommend Imbruvica for the “off-label” treatment of refractory and relapsed CLL and other NHL subtypes, according to JMS Securities. 

See more at YCharts: Pharmacyclics: FactsBehind $10B Market Cap

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Pharmacyclic's Imbruvica: New Hope for Cancer Patients

Imbruvica, by Pharmacyclics (PCYC-$135.20), received accelerated approval for MCL based on a study where 111 participants were given Imbruvica daily until their disease progressed or side effects became intolerable. Results showed nearly 66 percent of participants had their cancer shrink or disappear after treatment (overall response rate).

Imbruvica blocks the function of Bruton’s tyrosine kinase (BTK), a key signaling protein of the B-cell receptor signaling complexes that stimulate malignant B-cells to grow and divide uncontrollably.

MCL affects the white blood cells called lymphocytes found in the “mantle zone” of a lymph node. A rare form of NHL, and most prevalent in older adults (mean age, 68), MCL is an aggressive B-cell malignancy affecting about 6% of the 72,000 new cases of NHL diagnosed in the U.S. annually.

To date, first-line treatment has usually consisted of Roche’s monoclonal antibody Rituxan (rituximab) – which is directed against the CD20 antigen found on Beta lymphocytes – combined with a multi-agent chemotherapy regimen, most often CHOP (cyclophosphamide, doxorubicin, vincristine, and prednisone).

Given the complex pathophysiology of the disease (multiple cell-signaling division triggers), combined with a late-stage diagnosis typically discovered after the spread to the GI tract and bone marrow, MCL is characterized by short median survival times (3 – 5 years).

See more at YCharts: $10B Market By 2022: Pharmacyclic’s Piece of It

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Checking for Signs of Life at Vivus

Led by new chief executive Seth Fischer, Vivus (VVUS-$9.18) is walking a new path with its erectile dysfunction (ED) drug Stendra (avanafil), choosing to outsource promotion via licensing deals: in July 2013, VIVUS announced an exclusive pact worth up to $121 million (plus royalties) with the Italian pharmaceutical group Menarini to commercialize avanafil in Europe; Auxilium Pharma (AUXL), which already markets a portfolio of ED treatments, including testosterone and Xiaflex (recently approved for Peyronie’s disease – painful curvature of the penis caused by plaque buildup), inked a marketing deal worth up to $300 million to Vivus (plus royalties) for rights to Stendra in the U.S. and Canada.  

With ED afflicting up to 30 million men in this country alone, management opines that there remains significant commercial opportunity for Stendra to stake claim to a double-digit share of the $2.9 billion U.S. market. Unfortunately, peak sales estimates of $400 million - $500 million in 2016 (one-year prior to expiration of Cialis’ first key patent), could prove too optimistic.

Notwithstanding marketing claims, after adjusting for proper dosage, no one agent in the class has been shown to be more efficacious or safer than the others. How, therefore, are Vivus’s marketing partners going to surmount reimbursement challenges when therapeutic substitutions -- generic versions of Viagra -- are available at less than $2.00 per pill in most industrialized countries (save the U.S.)? Further, Auxilium has only about 150 sales representatives to sell the drug here at home.  

Read more at YCharts: New ED Drugs: Analysis of Vivus’s Prospects

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

SolarCity's Bright Growth Prospects

Founded in 2006 with the initial objective of selling solar energy systems outright, SolarCity (SCTY-$55.60) has since embraced the concept of being in the “energy finance” business. Avoiding utility-scale solar projects dominated by the likes of a First Solar (FSLR), the company now aggregates small PV residential rooftop projects into large solar leasing portfolios that offer predictable, recurring revenue streams either through power purchase agreements (where customers – residential homeowners – pay a fee per kWh based on the amount of electricity the solar energy system actually produces) or by contracted lease agreements (fixed monthly fees).

Third-quarter 2103 gross margins speak to the profit potential afforded this “finance company’s” business model: gross profit of operating leases to retail customers (homeowners and small business owners) was $16.3 million, or 66% of lease revenue; the gross profit margin of PV energy systems sold was $1.1 million, or 5% of sales!

SolarCity is the U.S. leader in rooftop residential solar installations, with a market share of….

Continue Reading at YCharts: Facts and Myths Behind SolarCity’s 331% Rise

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

Frosty Future for Erectile Dysfunction Drugs

A recent report published by Transparency Market Research has cast a pall on the future profitability of the PDE5 inhibitor sex drug class, forecasting that annual sales of sexual dysfunction drugs will fall from $4.3 billion in 2012 to $3.4 billion in 2019. The study authors opine that the loss of Pfizer’s (PFE) Viagra patent exclusivity in Canada, Asia and Europe will weaken all drug manufacturers’ lock – including Eli Lilly’s (LLY) Cialis and Bayer’s (BAYRY) Levitra – on pricing power in coming years.

Though a U.S. federal judge reaffirmed Pfizer’s “method-of-use” patent, blocking Teva Pharmaceuticals (TEVA) and others from launching their own generic versions until October 2019, the competitive landscape elsewhere is more hostile. Through September 2013, Pfizer reported that U.S. sales of Viagra held steady at $819 million; international revenue declined 13% to $586 million, however, as the Israeli-based drug maker, U.S.-based generic manufacturers Actavis (ACT) and Mylan (MYL), and other generic houses started to roll-out cheaper copies of sildenafil back in July.

Continue reading at YCharts: Why Pfizer’s Expiring Viagra Patent Hurts Lilly Most

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy. 

J&J's Remicade Versus Inflectra

Johnson & Johnson (JNJ-$95.63) isn’t waiting until decade’s end to expand its offering of anti-inflammatory therapies: to refresh the immunology franchise, JNJ is directing R&D at promising next-generation biologics, including the anti-interleukin (IL)-23 monoclonal antibody Guselkumab for psoriasis and rheumatoid arthritis (RA); Sirukumab, an anti-interleukin (IL)-6 monoclonal antibody in the treatment of patients with RA; and, an oral Janus Kinase (JAK) inhibitor (ASP015K) for RA.

Management also told analysts at a recent healthcare conference that new products are expected to comprise almost 46% of pharmaceutical sales by 2017. Auspicious product launches across other disease markets (including the blood thinner Xarelto, prostate cancer drug Zytiga, hepatitis-C antiviral Incivo and interleukin inhibitor Stelara for psoriasis) suggest JNJ is having early success in executing on its goal to lessen dependence on Remicade through diversification.

Read more at YCharts: J&J’s Top Drug vs. Generic: Investment Thesis

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Celgene Grows Beyond Cancer Products

Although growth prospects for Celgene’s (CELG-$154.44) oncology franchise remain strong, the product portfolio remains highly concentrated. To justify a PE ratio almost twice that of key competitors, the company needs additional revenue streams to offset competitive risks.

Just in 2013, Celgene has invested more than $500 million in third-party ventures – young companies working on promising drugs, ranging from epigenetics (structure-based drug design) to cancer metabolism and immunotherapy. Celgene will owe millions more in milestone payments – should any of these ventures pan out. 

Luckily, the balance sheet is sound, with healthy credit metrics and liquidity available to finance both internal R&D expense and external ventures. The company holds a revolving credit facility totaling some $1.5 billion and its long-term debt maturities are staggered, with the bulk of maturities scheduled out to 2017 and beyond.  

Read more at YCharts: Celgene’s Revlimid: Sales to $8B? Patent to 2023?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Roche Holding More than Oncology Franchise

Notwithstanding safety concerns and narrow therapeutic labeling, Roche Holding’s (RHHBY-$69.63) rheumatoid arthritis treatment Actmera has still managed to show respectable sequential growth: January – September 2013 sales grew 33% to 763 million Swiss francs ($826.9 million), likely due to study results presented last year showing Actemra was more effective than Humira as monotherapy in reducing common disease-activity endpoints of RA (e.g. reduction in tenderness and swollen joints) in those sufferers who couldn’t take methotrexate, the standard-of-care in most newly-diagnosed patients.

Recent events suggest that estimated peak annual sales of $1.1 billion in 2017 could prove conservative, too.

Read more at YCharts: New Player in the $18B Market for Arthritis Drugs?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Managing Weight-Loss Expectations at Arena Pharmaceuticals

The current market potential for Arena Pharmaceuticals’ (ARNA-$4.39) weight-loss drug Belviq here in the U.S. is approximately $1.0 billion – or about $315 million net to Arena.

Such bullish estimates, however, assume two variables not within current reach: (1) Add-on therapy for phentermine; and (2) broad reimbursement coverage by commercial and Medicare plans.

In a recent press release, Arena boasted that “Belviq is now covered by several prominent health plans and PBMs, including, among others, Express Scripts (including its legacy Express Scripts and Medco operations), Tufts, Health Alliance Plan, Excellus BCBS, Highmark BCBS, BCBS of Michigan, and BCBS of North Carolina and Healthnet (California).”

Jack Lief, co-founder and CEO of Arena, told analysts on the second-quarter conference call, too, that “as much as 50% [of insurance plans]” would likely reimburse for Belviq prescriptions by April 2014. Recent channel checks suggest that this statement is inaccurate at best, misleading at worst.

Read more at YCharts: How Arena’s “$3 Billion” Belviq Withered

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Gold Mining Values in a Bear Market

Despite cuts to cap-ex and exploration, Citigroup data reveals that gold majors like Barrick Gold (ABX), Goldcorp (GG), and Yamana Gold (AUY) are burning cash at all-in costs of $1,600/oz., 1,800/oz., and $2,000/oz., respectively – in part, due to overpayment for leases and acquisitions of marginal properties during the commodities bull market of the last decade.

Looking ahead, World Bank, Fitch Rating Agency and other commodity forecasters opine that gold prices will continue to trend lower, bottoming around $1,000/oz. by 2025. Ergo, the aforementioned miners and other peers with poor cost positions will likely need to shutter additional operations, reduce production and slash capita budgets to adjust to lower cash flow being generated in this new, lower pricing environment.

In addition, expect liquidity constraints to stress already weakened balance sheets (due to asset write-downs) and to increase borrowing costs as risks of loan covenant defaults increase – resulting in the suspension of remaining cash dividends, too. Nonetheless, for those investors willing to stomach residual risk, there are a few gold mining stocks with stable balance sheets and attendant all-in costs significantly lower than the industry average capable of paying healthy dividends in the current slow growth environment.

Read more at YCharts: Gold Stocks That Can Afford Their Dividends

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Prospects Not Terminal for Endocyte's Cancer Drug Vintafolide

Following an interim analysis, Endocyte (ECYT-$11.40) reported last Thursday that the independent Drug Safety Monitoring Board (DSMB) advised investigators to tell non-small cell lung cancer patients enrolled in the TARGET study that vintafolide use in monotherapy was unlikely to prove superior to docetaxel in progression-free survival (PFS) at the termination of the study.

However, news that the DSMB observed the combo arm of the TARGET study (vintafolide & taxotere) was trending toward the statistical goal of a 50% improvement in PFS relative to the taxotere arm (and didn’t demonstrate any new safety concerns) ultimately could prove to be good tidings for Endocyte shareholders.

Read more at YCharts: Endocyte’s Plunge Ignores Drug’s $2.5B Potential

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.