Biotech Stock Roundup: Endocyte Shoots up on Deal, Amgen-AbbVie Settle Humira Litigation

Companies like Amgen AMGN and Endocyte ECYT were in the news with Amgen signing a deal with AbbVie ABBV related to the entry of its biosimilar version of Humira and Endocyte signing an in-licensing deal which could prove to be transformational for the company.

Recap of the Week’s Most Important Stories

Endocyte Soars on In-Licensing Deal: Endocyte’s shares have shot up a whopping 317% following the company’s announcement that it has got an exclusive worldwide license for PSMA-617 from ABX GmbH. Endocyte said that it will quickly move 177Lu-PSMA-617 into phase III development. 177Lu-PSMA-617 is a radioligand therapeutic (“RLT”) that targets the prostate-specific membrane antigen (“PSMA”) present in about 80% of patients with metastatic castration-resistant prostate cancer (mCRPC).   

The transformational deal provides Endocyte with the most advanced targeted radioligand therapy in development for prostate cancer, representing a market opportunity of more than $1 billion. The company hopes to start phase III development in the first half of 2018 and complete the program as early as 2020. The terms of the deal include a $12 million upfront payment as well as the issuance of 2 million shares to ABX plus a warrant for the purchase of up to 4 million additional shares of Endocyte common stock. ABX also stands to receive milestone payments of up to $160 million and tiered royalties starting in the mid-teens. Endocyte will bear all future development expenses (Read more: Endocyte Inks Deal For Prostate Cancer Candidate, Shares Up).

AbbVie-Amgen Sign Deal Delaying Humira Biosimilar Entry: AbbVie has gained some breathing space by entering into a settlement agreement with Amgen related to biosimilar competition for AbbVie’s multi-billion dollar drug, Humira. Amgen, which gained FDA approval for Amjevita, its biosimilar version of Humira, has acknowledged the validity of AbbVie’s extensive intellectual property portfolio for Humira. According to the deal, the non-exclusive license for Humira will commence on Jan 31, 2023 in the United States and on different dates in other markets including Oct 16, 2018 in most countries in the EU. Amgen will also pay royalties.

This agreement has removed a major overhang on AbbVie’s shares though the company is still facing a patent challenge from Boehringer Ingelheim, which gained approval for its biosimilar version of Humira, Cyltezo, in August.

Humira generated sales of $8.8 billion in the first half of 2017 including $5.9 billion in the United States, which remains a key market for the drug. With Humira continuing to perform well, it will remain a major contributor to the top-line in the coming years. Moreover, the agreement gives AbbVie ample time to focus on developing its pipeline and launching new products that will help make up for the loss of revenues once biosimilar Humira enters the market. Expectations are high that AbbVie and Boehringer Ingelheim will announce a similar settlement agreement and dismiss all patent litigation.  

While AbbVie is a Zacks Rank #3 (Hold) stock, Amgen is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ablynx Up on Positive Phase III Results: Ablynx’s shares shot up 23.3% on positive topline results from a late-stage study on caplacizumab, the company’s anti-von Willebrand factor (vWF) nanobody which is being developed for the treatment of acquired thrombotic thrombocytopenic purpura (aTTP). Ablynx is currently seeking approval for caplacizumab in the EU and expects to submit a regulatory application in the United States in the first half of 2018. Caplacizumab has Fast Track designation in the United States for the treatment of aTTP and timely approval would make it the first therapeutic specifically indicated for the treatment of aTTP, an acute, life-threatening autoimmune blood clotting disorder.

CytomX in Immuno-Oncology Deal with Amgen: CytomX Therapeutics CTMX has entered into an immune-oncology focused strategic collaboration with Amgen for the development of a CytomX Probody T-cell engaging bispecific against the epidermal growth factor receptor (“EGFR”).

While early development will be led by CytomX, Amgen will lead later development and commercialization. The companies will share global late-stage development costs. The deal will see CytomX getting an upfront payment of $40 million and issuing $20 million of common stock to Amgen. CytomX could also earn up to $455 million in development, regulatory and commercial milestones for the EGFR program. Global commercial activities will be led by Amgen with CytomX having the option to opt into a profit share in the United States and receive tiered, double-digit royalties on net product sales outside the United States.

The agreement also covers up to three additional, undisclosed targets. If Amgen decides to pursue all these targets, CytomX could get up to an additional $950 million in upfront and milestone payments and high single-digit to mid-double digit royalty payments. CytomX will also receive the rights to an undisclosed preclinical T-cell engaging bispecific program from Amgen for which it will make milestone and royalty payments on any resulting products under this arrangement. We expect investors to react favorably to this deal.

Regeneron, Sanofi Eczema Drug Gets EU Nod: Regeneron REGN and partner Sanofi gained EU approval for their eczema treatment, Dupixent. This makes Dupixent the first targeted biologic to be approved for use in adults with moderate-to-severe atopic dermatitis (“AD”) who are candidates for systemic therapy. Dupixent, approved in the United States earlier this year, has blockbuster potential and is being investigated for other indications as well including asthma, eosinophilic esophagitis and nasal polyps.

Shares of Regeneron have gained 24.1% year to date, significantly outperforming the industry’s 15.4% rally.

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The Nasdaq Biotechnology Index gained almost 3% over the last five trading sessions. Among major biotech stocks, Regeneron was up 4.8% while Gilead GILD lost 0.7%. Over the last six months, Vertex VRTX was up 41.9% (See the last biotech stock roundup here: Amgen Reiterates 2017 Outlook, Intercept Hit by Ocaliva Safety Issues).

What's Next in the Biotech World?

Watch out for the usual regulatory and pipeline updates.

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