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Wednesday, February 6, 2019

Aphria’s (APHA) Board Rejects Green Growth Brand’s Hostile Takeover Bid

Aphria Inc (NYSE: APHA) today announced that its Board of Directors has rejected the hostile bid by Green Growth Brands Inc. (CSE:GGB) to acquire all of the outstanding common shares of the Company including any Common Shares that may become issued and outstanding after January 22, 2019, but prior to the expiry of the hostile bid upon the exercise, conversion or exchange of options, warrants, debentures or other securities of the Company exercisable or convertible into Common Shares, other than Common Shares owned by GGB or its affiliates, in exchange for 1.5714 shares of GGB.
Based on the 20-day volume-weighted average price of GGB shares immediately before GGB’s announcement of an intention to acquire the Common Shares of the Company, the Hostile Bid reflects a 23% discount to the Company’s share price over the same period. The Board made its recommendation after careful consideration and receipt of the recommendation of a committee of its independent directors (the “Independent Committee“), who were advised by financial and legal advisors.
The Board unanimously recommends that Aphria shareholders REJECT the Hostile Bid and DO NOT TENDER their shares.

Alzheimer’s Cognitive Dysfunction Linked to Clotting Factor

Researchers at the Gladstone Institutes report that fibrinogen is responsible for a series of molecular and cellular events that can destroy connections between neurons in the brain and result in cognitive decline. Senior investigator Katerina Akassoglou, PhD, and her team used imaging technology to study both mouse brains and human brains from patients with Alzheimer’s disease. They also produced the first three-dimensional volume imaging showing that blood-brain barrier leaks occur in Alzheimer’s disease.
In their study (“Fibrinogen Induces Microglia-Mediated Spine Elimination and Cognitive Impairment in an Alzheimer’s Disease Model“), published in Neuron, the scientists found that fibrinogen, after leaking from the blood into the brain, activates the brain’s immune cells and triggers them to destroy synapses between neurons.
Alzheimer's Fibrinogen Graphical Abstract
Source: Neuron
“Cerebrovascular alterations are a key feature of Alzheimer’s disease (AD) pathogenesis. However, whether vascular damage contributes to synaptic dysfunction and how it synergizes with amyloid pathology to cause neuroinflammation and cognitive decline remain poorly understood. Here, we show that the blood protein fibrinogen induces spine elimination and promotes cognitive deficits mediated by CD11b-CD18 microglia activation. 3D molecular labeling in cleared mouse and human AD brains combined with repetitive in vivo two-photon imaging showed focal fibrinogen deposits associated with loss of dendritic spines independent of amyloid plaques,” wrote the investigators.
“Fibrinogen-induced spine elimination was prevented by inhibiting reactive oxygen species (ROS) generation or genetic ablation of CD11b. Genetic elimination of the fibrinogen binding motif to CD11b reduced neuroinflammation, synaptic deficits, and cognitive decline in the 5XFAD mouse model of AD. Thus, fibrinogen-induced spine elimination and cognitive decline via CD11b link cerebrovascular damage with immune-mediated neurodegeneration and may have important implications in AD and related conditions.”
Previous studies have shown that elimination of synapses causes memory loss, a common feature in Alzheimer’s disease and other dementias. The researchers demonstrated that preventing fibrinogen from activating the brain’s immune cells protected mouse models of Alzheimer’s disease from memory loss.
“We found that blood leaks in the brain can cause elimination of neuronal connections that are important for memory functions,” explained Akassoglou, who is also a professor of neurology at University of California, San Francisco (UCSF). “This could change the way we think about the cause and possible cure of cognitive decline in Alzheimer’s disease and other neurological diseases.”
The team showed that fibrinogen can have this effect even in brains that lack amyloid plaques, which are the focus of diverse treatment strategies that have failed in large clinical trials. They demonstrated that injecting even extremely small quantities of fibrinogen into a healthy brain caused the same kind of immune cell activation and loss of synapses they saw in Alzheimer’s disease.
“Traditionally, the build-up of amyloid plaques in the brain has been seen as the root of memory loss and cognitive decline in Alzheimer’s disease,” said Mario Merlini, PhD, first author of the study and a staff research scientist in Akassoglou’s laboratory at Gladstone. “Our work identifies an alternative culprit that could be responsible for the destruction of synapses.”
The scientists’ data could help explain findings from recent human studies in which elderly people with vascular pathology showed similar rates of cognitive decline as age-matched people with amyloid pathology. However, patients with both types of pathology had much worse and more rapid cognitive decline. Other studies also identified vascular pathology as a strong predictor of cognitive decline that can act independently of amyloid pathology.
“Given the human data showing that vascular changes are early and additive to amyloid, a conclusion from those studies is that vascular changes may have to be targeted with separate therapies if we want to ensure maximum protection against the destruction of neuronal connections that leads to cognitive decline,” said Akassoglou.
Akassoglou and her colleagues recently developed an antibody that blocks the interaction between fibrinogen and a molecule on the brain’s immune cells. In a previous study, they showed this antibody protected mouse models of Alzheimer’s disease from brain inflammation and neuronal damage.
“These exciting findings greatly advance our understanding of the contributions that vascular pathology and brain inflammation make to the progression of Alzheimer’s disease,” said Lennart Mucke, MD, co-author of the study and director of the Gladstone Institute of Neurological Disease. “The mechanisms our study identified may also be at work in a range of other diseases that combine leaks in the blood-brain barrier with neurological decline, including multiple sclerosis, traumatic brain injury, and chronic traumatic encephalopathy. It has far-reaching therapeutic implications.”

Sangamo to host conference call

Conference call to review interim results from the Phase 1/2 CHAMPIONS and EMPOWERS studies for MPS II and MPS I will be held on February 7 at 12:30 pm.

Lannett Record Sales In FQ2 2019; Raises Guidance

– Recent 17 Product Launches Contributed $40 Million of Net Sales in Fiscal 2019 YTD
– Five New Product Launches in the Quarter
– Successful Credit Agreement Amendment Provides Financial Flexibility
– $33 Million Net Cost Reduction Plan Well Underway
– Levothyroxine Transaction Improved Liquidity; Cash Balance of $164 Million at December 31 Continues to Grow
“Stellar sales across our product offering drove our strong fiscal 2019 second quarter financial results,” said Tim Crew, chief executive officer of Lannett.  “The 17 products launched during calendar year 2018 were key contributors to the growth in the quarter and are expected to contribute approximately $75 million in fiscal 2019 net sales with at least 35% of gross margin.  Complementing our second quarter performance was a well-executed plan associated with the transition of Levothyroxine.
“We are increasingly confident about our future.  With approximately 60 products in various stages of operational readiness and development, of which we plan to launch 10 over the next several months, we expect to regularly bring new products to market for the foreseeable future at a similar pace and value as we have in the recent past.  With regard to our cost reduction plan, virtually all main actions have been completed or are in-process to achieve the $33 million of targeted net annualized savings.  In addition, we executed an amendment to our credit agreement, which further enhances our financial flexibility and better positions us to capitalize on more growth opportunities.  As a result of our progress, we have raised our financial guidance for fiscal 2019.”
Crew went on to say that by the end of fiscal 2020 the company is on track to replace a substantial majority of normalized gross profit from Levothyroxine, which approximates $100 million and excludes the impact of recent market disruptions and associated share gains.
For the fiscal 2019 second quarter, on a GAAP basis, net sales were $193.7 million compared with $184.3 million for the second quarter of fiscal 2018.  Gross profit was $69.8 million, or 36% of total net sales, compared with $87.5 million, or 47% of total net sales.  Research and development (R&D) expenses were $9.7 million compared with $10.7 million for the fiscal 2018 second quarter.  Selling, general and administrative (SG&A) expenses decreased to $23.2 million from $28.5 million.  Restructuring expenses were $0.2 million compared with $1.0 million.  Operating income was $36.7 millioncompared with $47.1 million.  Interest expense was $21.5 million compared with $20.7 million for the second quarter of fiscal 2018.  Net income was $12.4 million, or $0.32 per share, compared with $14.0 million, or $0.37 per diluted share, for the fiscal 2018 second quarter.
For the fiscal 2019 second quarter reported on a Non-GAAP basis, adjusted net sales were $193.7 million compared with $184.3 million for the second quarter of fiscal 2018.  Adjusted gross profit was $86.0 million, or 44% of adjusted net sales, compared with $96.7 million, or 52% of adjusted net sales, for the prior-year second quarter.  Adjusted R&D expenses were $8.7 million compared with $10.7 million.  Adjusted SG&A expenses were $17.4 million compared with $20.9 million.  Adjusted operating income was $59.9 million compared with $65.1 million for the prior-year second quarter.  Adjusted interest expense was $17.1 million compared with $16.2 million for the second quarter of fiscal 2018.  Adjusted net income was $33.6 million, or $0.86 per diluted share, compared with $40.6 million, or $1.06 per diluted share, for the fiscal 2018 second quarter.
Guidance for Fiscal 2019Based on its current outlook, the company has revised its estimates, as follows:
GAAP
Adjusted
Net sales
$615 million to $635 million, up from $585 million to $615 million
$615 million to $635 million, up from $585 million to $615 million
Gross margin %
37% to 38%, down from 38% to 39%
44% to 45%, unchanged
R&D expense
$35 million to $37 million, up from $32 million to $36 million
$33 million to $35 million, up from $30 million to $34 million
SG&A expense
$78 million to $81 million, up from $75 million to $78 million
$66 million to $69 million, up from $63 million to $66 million
Restructuring expense
$3 million to $4 million, unchanged
$ —
Asset impairment charges
$369 million, unchanged
$ —
Interest and other
$84 million to $86 million, up from $81 million to $83 million
$66 million to $68 million, up from $63 million to $65 million
Effective tax rate
22% to 23%, unchanged
22% to 23%, unchanged
Capital expenditures
$30 million to $35 million, unchanged
$30 million to $35 million, unchanged
Conference Call Information and Forward-Looking StatementsLater today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for its fiscal 2019 second quarter ended December 31, 2018.  The conference call will be available to interested parties by dialing 866-436-9172 from the U.S. or Canada, or 630-691-2760 from international locations, passcode 48172671.  The call will be broadcast via the Internet at www.lannett.com.  Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software.  A playback of the call will be archived and accessible on the same website for at least three months.

Avrobio posts encouraging update for Fabry gene therapy phase 1, 2 trials

When we caught up with Avrobio at the J.P. Morgan Healthcare Conference, the company was three months out from its last Fabry disease update. Despite signs of efficacy—and one patient being weaned off enzyme replacement therapy—the company’s shares halved, thanks to a decrease in vector copy number across the three patients for whom it had data.
“What we hope to see in the future is more of a stabilization, more of a plateauing effect,” CEO Geoff MacKay said at the time. “What investors were asking [at the data release] was we’re not seeing plateauing yet—are we going to see it?”
The data, MacKay said, point to yes.
The Cambridge, Massachusetts-based biotech announced updated data on Wednesday for two trials of its lentiviral-based, ex vivo gene therapy, AVR-RD-01. The phase 1 trial is testing the safety of AVR-RD-01 in up to six patients who have received enzyme replacement therapy, and the phase 2 trial is an open-label, single-arm study assessing the efficacy and safety of the treatment in eight to 12 Fabry patients who have never received ERT. So far, the studies have dosed three patients apiece.

AVR-RD-01 is based on CD34+ stem cells that have been modified using a lentiviral vector to carry and express the GLA gene coding for alpha-galactosidase A (AGA), the enzyme that is missing in Fabry disease.
The updated data shows that all three patients in the phase 1 trial had AGA plasma enzyme activity (AGA) above the diagnostic range for males with classic Fabry disease, Avrobio said. Patient 1 had AGA of 1.6 nmol/hr/ml at 22 months; patient 2 had AGA of 3.4 nmol/hr/ml at 12 months; and patient 3 had AGA of 5.4 nmol/hr/ml at six months. All three patients showed a spike in AGA activity in the two to three months after dosing, followed by a drop in enzyme levels. But patient 1’s data show that the slope of the curve is decreasing, indicating the beginning of a plateau, MacKay said. And patient 2 looks to have reached plateau earlier with AGA levels stable between the 6- and 12-month marks.
“The other half of the story is that, for the first time, we can begin to look at substrate and metabolite,” MacKay said. “The nice thing about Fabry is it’s such a well-studied disease with 40 years of research behind it due to ERT. It’s pretty clear that when the enzyme, AGA goes up, it will drive the substrate, Gb3, down.”
Looking at levels of Gb3 and the metabolite, lyso-Gb3, allows Avrobio to compare how its gene therapy is faring compared to ERT. One patient in the phase 2 study—the one assessing ERT-naïve patients—had an 85% reduction in lyso-Gb3. As for the phase 1 study, patient one, who had chosen to discontinue ERT, had lower lyso-Gb3 levels after gene therapy alone than while receiving ERT.
“We believe these results are significant because the data reported show sustained AGA enzyme levels with associated reductions in substrate and metabolite levels,” said Birgitte Volck, M.D., Ph.D., Avrobio’s president of research and development, in a release. “This suggests that our gene therapy exerts its effects as intended in patients previously treated with ERT, as well as in treatment-naïve patients. Taken together, these clinical data represent a growing body of evidence of the therapeutic potential of AVR-RD-01 as a gene therapy for patients with Fabry disease.”
As for the vector copy number (VCN) that gave investors pause in the fall, it serves as a marker for integration of the gene into cells and the activity of the therapy. A decline sparked concerns that the gene therapy’s benefits may not last. In October, patient 1 started with a VCN of 0.7 that dropped to 0.1 after 17 months. But now, that patient’s VCN “has in fact reached a plateau,” MacKay said.
“The same 0.1 at month 17 did plateau going out 22 months. It’s just another measure of what we are hoping to demonstrate over time: a consistent pattern of robust enzyme with that stabilization. We will be reviewing the VCN of all patients. Of the most interest to people is, for the patient that is furthest out, VCN is completely flat and stable,” he said.

MacroGenics upped to Market Perform from Underperform at Raymond James

https://thefly.com/landingPageNews.php?id=2860283

MacroGenics price target raised to $39 from $34 at H.C. Wainwright

H.C. Wainwright analyst Chattopadhyay maintained a Buy rating on MacroGenics and raised his price target on shares to $39 from $34. The analyst said he anticipates FDA Biologic License Application approval during the second half of 2020, with the progression-free survival, or PFS, win and OS trending positive in the SOPHIA study, and noted that the SOPHIA data showed that patients treated with margetuximab plus chemotherapy experienced a 24% risk reduction in PFS compared to patients in the trastuzumab plus chemotherapy. Shares of MacroGenics are trading over 129% higher to $25.48 in late morning trading after this morning’s release of the results from the Phase 3 SOPHIA study of margetuximab.