Pharma Stock Roundup: FDA Nod for AstraZeneca Severe Asthma Drug, Bayer Signs Deal with Loxo

With third quarter earnings season drawing to a close, the focus is back on deals, regulatory approvals and pipeline updates. This week, companies like AstraZeneca AZN and Bayer BAYRY were in the news with the former announcing the FDA approval of its severe asthma drug while Bayer signed a cancer-focused deal with Loxo Oncology.

Recap of the Week’s Most Important Stories

FDA Approval for AstraZeneca Severe Asthma Drug: AstraZeneca continues to deliver on its pipeline with the company scoring a couple of FDA nods this week. The regulatory body granted approval to the company’s respiratory biologic, Fasenra (benralizumab), for the add-on maintenance treatment of severe asthma patients (aged 12 years and above) whose disease is driven by eosinophilic inflammation (Read more: AstraZeneca's Asthma Drug Benralizumab Approved by FDA). Moreover, AstraZeneca got a positive opinion from the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency (“EMA”) for Fasenra (Read more: AstraZeneca Gets Positive CHMP Opinion for Asthma Candidate).

AstraZeneca also gained FDA approval for the use of its cancer drug, Faslodex, in an expanded patient population. Faslodex can now be used in combination with Eli Lilly’s LLY CDK4/6 inhibitor, Verzenio (abemaciclib), in women with HR+, HER2- advanced or metastatic breast cancer (“MBC”) whose disease has progressed after endocrine therapy. Study results had shown 16.4 months of progression-free survival (“PFS”) on the combination treatment.

This marks the second FDA approval for Faslodex with a CDK4/6 inhibitor – the treatment is already approved for use in combination with Pfizer’s CDK4/6 inhibitor, Ibrance (palbociclib).

FDA Advisory Panel Meeting for Pacira’s Exparel sNDA: Specialty pharma company, Pacira Pharmaceuticals, Inc. PCRX announced that its supplemental New Drug Application (sNDA) for Exparel for its use as a nerve block for regional analgesia will be discussed by the FDA’s Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC). While the meeting is scheduled to be held on Feb 14-15, 2018, a final response from the FDA regarding the approval of the sNDA is expected by Apr 6, 2018 (Read more: Pacira's Exparel sNDA to be Reviewed by FDA Advisory Committee).

Bayer in Oncology Deal with Loxo: Bayer entered into a collaboration agreement with Loxo, a company focused on the development of highly selective medicines for patients with genetically defined cancers. The deal, which could see Bayer shelling out up to $1.55 billion, will see the companies collaborating for the global development and commercialization of Loxo’s highly selective TRK inhibitors, larotrectinib and LOXO-195, for patients with TRK fusion cancers.

The agreement terms include a $400 million upfront payment. Loxo could receive another $450 million on the achievement of certain regulatory and commercial milestones and an additional $200 million for milestones related to LOXO-195. Development costs will be split equally by the companies. The companies will co-promote in the United States while Loxo will receive tiered, double-digit royalties on net sales, and sales milestones totaling $475 million for ex-U.S. territories. Larotrectinib is scheduled to be filed for FDA approval in late 2017/early 2018.

J&J’s Janssen Biotech in Licensing Deal with Zymeworks: Janssen Biotech, a Johnson & Johnson JNJ company, has entered into a licensing agreement with Zymeworks for the development and commercialization of next generation bispecific antibody therapeutics.

Under the deal, Janssen will get a worldwide, royalty-bearing license to research, develop, and commercialize up to six bispecific antibodies using Zymeworks’ Azymetric and EFECT platforms. Zymeworks is entitled to an upfront payment of $50 million plus up to $282 million in development milestones and up to $1.12 billion in commercial milestone payments, as well as tiered royalties on potential sales.

Janssen also has the option to add two more bispecific programs to the deal which would mean additional money for Zymeworks.

Johnson & Johnson is a Zacks Rank #2 (Buy) stock - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CHMP Positive on Merck Drug: Merck MRK got a positive opinion from the CHMP for Prevymis, which recently gained approval in the United States. Merck is seeking EU approval for Prevymis for the prevention of cytomegalovirus (“CMV”) reactivation and disease in adult CMV-seropositive recipients of an allogeneic hematopoietic stem cell transplant (“HSCT”). With the CHMP giving a positive opinion, chances of gaining approval look high. A decision regarding EU approval is expected within two months (Read more: Merck Gets CHMP Nod for Infection Candidate Prevymis).

Updated Data on Bristol-Myers’ Immuno-Oncology Combination: Bristol-Myers Squibb BMY announced updated results on a combination of Opdivo and BMS-986205, a selective, once-daily oral IDO1 inhibitor, from an ongoing phase I/IIa dose escalation and expansion study. While the study showed that the maximum tolerated dose of the combination was 200 mg, the 100 mg dose was determined to be the recommended dose based on safety and pharmacodynamic data. Moreover, the company said that encouraging response was observed in heavily pre-treated patients with advanced cancers.

The objective response rate (“ORR”) and disease control rate (“DCR”) was 32% and 44%, respectively, for the bladder cancer cohort. The ORR and DCR were 14% and 64%, respectively, in the cervical cancer cohort.

Bristol-Myers also announced the expansion of the label of its blockbuster drug, Sprycel, which can now be used for the treatment of children with Ph+ chronic phase (“CP”) chronic myeloid leukemia (“CML”).

Bristol-Myers has gained 4.5% year to date, compared to the 14.4% rally of the industry it belongs to.

Performance

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

The NYSE ARCA Pharmaceutical Index declined 0.8% over the last four trading sessions. Among major stocks, AstraZeneca was up 0.9% while Merck declined 2.5%. Over the last six months, Bristol-Myers was up 12.3% while Glaxo declined 17.5% (See the last pharma stock roundup here: AstraZeneca's Q3 Earnings, Roche & Merck Drugs Get FDA Nod).

What's Next in the Pharma World?

Watch out for regulatory and pipeline news from pharma stocks.

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Astrazeneca PLC (AZN) : Free Stock Analysis Report
 
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