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Thursday, November 7, 2019

Analysts Remain Upbeat On GW Pharma’s Optionality With Epidiolex

GW Pharmaceuticals PLC- ADR GWPH 1.21% reported better-than-expected third-quarter revenues, thanks to strong sales of its cannabinoid epilepsy drug Epidiolex.

The Analyst

Bank of America analyst Tazeen Ahmad reiterated a Buy rating and $218 price target. (See track record here)
Cantor Fitzgerald analyst Charles Duncan reiterated an Overweight rating and lowered the price target from $229 to $174. (See track record here)

BofA Delves On Added Growth Drivers In 2020

GW Pharma’s U.S. Epidiolex sales climbed 26% from the previous quarter and came in ahead of estimates, Ahmad said in a note. Continued patient adds and new doctor prescriptions were behind the strength.
After having penetrated the high patient concentration centers of demand during early launch, Ahmad said the company is likely to turn its focus on an additional tier of 1,000 prescribers, which present a meaningful growth opportunity going forward.
The company is planning sNDA filing for a third indication – seizures associated with tuberous sclerosis complex – in January. This, according to the analyst represented a large addressable patient opportunity.
Ahmad expects GW Pharma to launch in EU countries throughout 2020. As such, BofA raised its sales penetration estimate to $289 million in 2019 and $381 million in 2020.

Cantor Impressed With Adoption, Expansion Opportunities

GW Pharma’s decision to deploy resources in 2020 to target long-term care segment could be a capital-efficient growth driver for Epidiolex adoption, Duncan said.
The $554.7 million in cash/equivalents at the end of the third quarter and the net loss of $13.8 million reported for the quarter signal a solid financial position to fund ongoing commercial launches and pipeline expansion efforts, the analyst added.
Duncan expects multiple catalysts by year’s end beyond Epidiolex, such as P3 initiation of Sativex in MS spasticity in the fourth quarter and advancement of the Neonatal hypoxic-ischemic encephalopathy intravenous CBD program.
Duncan also discussed the company’s Epidyolex commercialization efforts underway in Europe and the label expansion efforts in the U.S. for additional indications such as TSC and Rett syndrome.
Cantor attributed the reduction in the price target for shares to the removal of cash and most value attributable to the platform from its model following the third-quarter results.
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iPad app could screen entire UK population for Alzheimer’s symptoms

Health technology Medopad has announced a strategic collaboration with Johnson & Johnson’s pharma unit, Janssen, to research and potentially market a nationwide digital screening tool that looks for tell-tale symptoms of Alzheimer’s.
The novel digital biomarker for Alzheimer’s disease known as ReVeRe, developed and clinically validated by Janssen, is a tool allowing for remote and automated assessment and monitoring of verbal memory in individuals at risk of Alzheimer’s.
Using an iPad, ReVeRe provides an automated version of the Rey Auditory Verbal Learning Test (RAVLT) used in Alzheimer’s, along with other tests of attention and executive function that can detect signs of early disease.
MedoPad will work with the UK’s National Health Service (NHS) and other international health systems to allow the technology to be deployed across patient populations, with an initial focus on the UK and China.
The goal is to create a home-based tool that could allow for an unsupervised and reliable longitudinal assessment of early cognitive decline due to Alzheimer’s within a “real-world” setting.
Diagnosing and treating the disease in its early stages is an important goal for pharma, as stopping or reversing it before symptoms become more severe will produce the greatest benefit for patients in terms of their quality of life.
Dan Vahdat, Medopad’s CEO and founder, said: “We are excited to further expand the validation for potential commercialisation of this technology. Once we have concluded implementation and final testing, we aim to be able to screen an entire nation for Alzheimer’s disease at low cost.”
The news from Janssen follows the surprise announcement from China’s Green Valley pharmaceuticals that its Alzheimer’s drug has been approved by the Chinese drugs regulator.
Oligomannate, a drug derived from seaweed, is the first drug approved by any regulator for Alzheimer’s since 2003, and works by regulating the bacteria that inhabit the gut.
The theory is that this could reduce the production of toxins that lead to the deterioration of the brain seen in Alzheimer’s.
Biogen has also filed its amyloid-targeting aducanumab with the FDA, saying that despite several trial disappointments it has supportive data from a fresh analysis of results.
A Slovakian bioteh, Axon, is another company that thinks early diagnosis will be useful as it is working on a vaccine-based approach against the pathological tau protein tangles also linked with Alzheimer’s.
Despite the differing approaches both companies are targeting the early stages of the disease, and improved diagnosis can only help development of new treatments in the future.
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Apollo Medical EPS misses by $0.04, misses on revenue

Apollo Medical (NASDAQ:AMEH): Q3 GAAP EPS of $0.10 misses by $0.04.
Revenue of $156.06M (-6.4% Y/Y) misses by $9.26M.
Press Release
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China to study ‘regional’ approach to animal disease outbreaks

China will trial in France a new approach to responding to animal disease outbreaks that is less disruptive to trade, and which could be extended across the European Union, European commissioner Phil Hogan said on Thursday.
Hogan, Commissioner for Agriculture and Rural Development and incoming Trade Commissioner, told Reuters that China’s customs authorities had accepted the principle of ‘regionalization’ for the first time during a meeting on Thursday.
Under the regionalization concept, only a certain area inside the country where an outbreak has occurred is restricted from exporting the livestock products.
China, the world’s top importer of pork and fastest growing buyer of beef, typically bans imports of animal products from entire countries, even if they have only reported a single outbreak of disease. The bans can take years to be lifted, causing significant damage to trade.
“This is progress, and they’re prepared to do a pilot program with France in relation to putting this into effect in 2020,” Hogan said.
The EU and member states including France have lobbied China for years to recognize regionalization as a way of reducing the impact on trade of disease outbreaks in livestock.
The principle is applied in the EU for outbreaks of contagious diseases like African swine fever and avian influenza but has never been recognized by China.

“What the program will say is, if there’s a small outbreak of a particular disease in France, it won’t mean that the entire country is banned from sending those products into China,” added Hogan.
A list of agreements reached by France and China during President Emmanuel Macron’s visit to China this week included a plan for the two countries to carry out technical exchanges with a view to reaching an agreement in 2020 on zoning to combat African swine fever.
The deadly pig disease, currently ravaging herds across Asia, was also reported in Belgium last year, coming very close to the French border.
Fresh outbreaks in new countries threaten a booming trade in pork exports to China, where meat imports are expected to rise by around 2 million tonnes, or about 35%, this year because of a huge shortfall in production.

If the project with France goes well, it could be rolled out to all member states, said Hogan.
“It sets the scene for the concept of regionalization to be applicable all over the European Union for any future disease problems,” he said.
Asked if the EU would recognize the concept in China too, Hogan said: “We’re open to the concept of reciprocity on everything, including on animal disease.”
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China’s Bio-Thera gets approval for Humira biosimilar

China’s Bio-Thera Solutions Ltd has won a regulatory approval for its version of AbbVie Inc’s blockbuster rheumatoid arthritis treatment Humira, paving the way for the first such biosimilar to enter the world’s second-largest drug market.
Humira is the world’s top-selling drug, with sales of $20 billion last year, but now faces competition from cheaper versions in Europe and a 2023 expiration of its patents in the United States, by far the most profitable market.

The National Medical Products Administration (NMPA), in a statement on its website on Thursday, said Bio-Thera’s Qletli “was highly similar to the approved reference drug in terms of quality, safety and effectiveness.”
The drug has been approved for the treatment of three autoimmune diseases, including rheumatoid arthritis, ankylosing spondylitis, and plaque psoriasis, Bio-Thera said in separate a statement here
“The NMPA approval of Qletli is a very important milestone for our biosimilar portfolio, providing an new affordable treatment option for patients in China with several types of autoimmune diseases,” Bio-Thera CEO Shengfeng Li said.
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Clovis Oncology EPS beats by $0.17, beats on revenue

Clovis Oncology (NASDAQ:CLVS): Q3 GAAP EPS of -$1.72 beats by $0.17.
Revenue of $37.6M (+65.2% Y/Y) beats by $1.76M.
Shares +10.7% PM.
Press Release
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Feds sue Gilead over patents in HIV pre-exposure prophylaxis

The U.S. government, on behalf of the Department of Health and Human Services (HHS), has filed a complaint claiming that Gilead Sciences’ (NASDAQ:GILD) Truvada and Descovy infringe on HHS patents related to pre-exposure prophylaxis (PrEP).
HHS Secretary Alex Azar says, “HHS recognizes Gilead’s role in selling Truvada and Descovy to patients for prevention of HIV. Communities have put these drugs to use in saving lives and reducing the spread of HIV. However, Gilead must respect the U.S. patent system, the groundbreaking work by CDC researchers, and the substantial taxpayer contributions to the development of these drugs. The complaint filed today seeks to ensure that they do.”
The FDA initially approved the drugs to treat HIV infection, followed by the PrEP indication, based on work done by the CDC, according to HHS.
The company has yet to comment on the matter.
Shares are down a fraction premarket.
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