Novavax Gains Over 50% In June: What’s Driving The Rally?

Novavax, Inc. NVAX 7.79% shares have been on a strong run since mid-May, with multiple catalysts driving the stock to stratospheric levels.

It’s a comeback for the company, which saw its stock plummet in February 2019 in the wake of a failed late-stage trial of its respiratory syncytial virus vaccine candidate ResVax.

Novavax’s Stock Trajectory: Novavax shares, which were trading mostly at sub-$5 levels since the start of 2020, began to pick up steam in late January when its influenza vaccine candidate NanoFlu was accorded Fast Track Designation.

After trading at single-digit levels, the stock made the next leg up in late February after the company published positive pre-clinical data for NanoFlu and an update on its COVID-19 vaccine program.

The company said Feb. 26 it is assessing multiple nanoparticle vaccine candidates in animal studies and expects to have an optimal candidate for human testing by the end of spring 2020, helping the stock breach the $10 level.

Although the stock came under pressure along with the broader market in the first half of March, slipping back below $10, it resumed the uptrend and continued to move higher through late April.

The stock hit a high of $26.34 on April 20. The rally was helped by a positive late-stage readout for NanoFlu in late March and Novavax’s early April announcement that it is zeroing in on a coronavirus vaccine candidate codenamed NVX-CoV2373.

Subsequently, the stock saw a loss of momentum, pulling back from the April 20 highs to a low of $16.41 in early May.

As the stock was looking for direction, a May 11 announcement concerning $388 million in funding from the CEPI for Novavax’s coronavirus vaccine development provided a shot in the arm.

In the interim, Novavax commenced a Phase 1/2 study of NVX-CoV2373 in late May and also announced acquisition of Czech CDMO Praha Vaccines in order to scale up manufacturing of the coronavirus vaccine to over 1 billion doses of antigen starting in 2021.

After hovering around $45 level for much of the first half of June, the rally accelerated amid a few company-specific developments.

Novavax announced that it raised about $200 million through a private placement with RA Capital.

The company also added a few key personnel to its board and executive team with vaccine-related experience.

“The senior management additions are value creating due to experience and “fresh thinking,” and as external validation of the company’s maturing pipeline and potential broad applicability of its platform recombinant nanoparticle/Matrix-M adjuvant platforms,” Cantor Fitzgerald analyst Charles Duncan said in a note last week.

Novavax: A Short Candidate? About 7.4 million shares of Novavax were shorted as of May 29, representing 12.66% of the float, according to the Yahoo database. The short interest has increased from 5.71 million shares as of April 29, reflecting investor bets on a pullback after the meteoric rise.

The short ratio is 0.57, given the robust trading volume.

With so many catalysts lined up, Novavax investors may have to trade with caution given the potential for a short squeeze.

Novavax’s Upcoming Catalysts: When the company announced enrollment of the first patient in the first part of the Phase 1/2 trial in late May, Novavax said it expects preliminary immunogenicity and safety results from the Phase 1 trial in July.

The Phase 1 trial is being conducted at two sites in Australia with 130 healthy volunteers, ages 18-59, with the trial assessing two doses —5mg and 25mg — with and without Matrix-M adjuvant.

The company is planning a Phase 2 trial in multiple countries, including in the U.S., that would evaluate a broader age group.

Following the positive NanoFlu readout, a BLA filing for licensure of the vaccine candidate is also imminent.

Cantor recently raised its price target for Novavax shares from $45 to $88, and the firm has an Overweight rating on the stock.

https://www.benzinga.com/general/biotech/20/06/16373936/novavax-gains-over-50-in-june-whats-driving-the-rally

$15 billion revenue loss projected for US primary care due to COVID-19 shutdowns

Primary care practices are projected to lose more than $65,000 in revenue per full-time physician in 2020, following drastic declines in office visits and fees for services from March to May during the COVID-19 pandemic, according to a study led by researchers in the Blavatnik Institute at Harvard Medical School.

The lost revenue adds up to a shortfall of $15 billion to primary care practices across the United States, according to the analysis to be published June 25 in Health Affairs.. The researchers also caution that losses would balloon substantially if there is a second viral peak later in the year or if the reimbursement rates for telehealth visits revert to pre-COVID levels.

The study was led by Sanjay Basu, director of research and population health at Collective Health and a faculty affiliate in the HMS Center for Primary Care, Russell Phillips, director of the center and professor of global health and social medicine at HMS, and Bruce Landon, HMS professor of health care policy.

“For many primary care practices, particularly those serving the most vulnerable populations, these losses could be catastrophic, with many practices being forced to close,” Basu said. “This could weaken the U.S. health system dramatically at a time when we need it to be at its strongest.”

” Our prior work shows that primary care saves lives, and loss of primary care practices will translate to lives lost across the United States,” Phillips said.

To calculate the projected financial losses on operating expenses and revenues, the researchers simulated the impact of the pandemic on a variety of practices analyzing both visit volume and visit type, among other variables. They then compared the anticipated revenues, expenses and losses under several scenarios, including a second shelter-in-place order in November and December as well as reverting back to the significantly lower pre-pandemic levels of provider reimbursement for telemedicine visits.

Once the most acute threat of COVID-19 subsides and the pandemic winds down, primary care in the United States will have to absorb the brunt of long-term COVID-19 care and management, testing and vaccination, the team said. The primary care system must also be equipped to meet the piled-up needs of the population and return its attention to the major chronic medical conditions that collectively will determine the health of Americans for many years to come, they said.

“The coronavirus pandemic highlights the fragility of the primary care system,” said Landon, noting that “over half of primary care practices remain small and physician-owned and these independent practices have limited access to capital and other support that could help them weather the pandemic.”

The researchers said their findings and the looming growth in primary care use underscores the need for a financial boost to the primary care system.

“The coronavirus pandemic is a pointed reminder of the importance of primary care to our society. Primary care is critical to limiting the spread of the virus, in treating the comorbidities that can make COVID-19 so deadly and in helping people navigate the social and psychological challenges of social distancing and of living with the pandemic,” Phillips said.

While legislation proposing financial aid to hospitals has already been introduced in Congress, independent primary care practices have yet to receive significant financial help, the researchers said.

---

Explore further

Anesthesiologists shift practice from OR to ICU during pandemic

---

More information: Health Affairs (2020). DOI: 10.1377/hlthaff.2020.00794

https://medicalxpress.com/news/2020-06-billion-revenue-loss-primary-due.html

FDA OKs Masimo wearable patient sensor

Masimo (NASDAQ:MASI) announces that the FDA has granted 510(k) clearance to Centroid, a wireless wearable sensor that monitors patient orientation, activity and respiration rate.

The device, paired with the Root Patient Monitoring and Connectivity Platform via Bluetooth, helps clinicians monitor patient position to avoid preventable pressure ulcers and can alert them to sudden movements such as falls.

https://seekingalpha.com/news/3586338-fda-oks-masimo-wearable-patient-sensor

Scientists test if gargling salt water helps treat coronavirus

Scientists are testing to see if gargling and flushing out your nose with salty water could be a simple treatment to help fight the coronavirus.

A team at the University of Edinburgh previously discovered that using saline solutions noticeably reduced common colds by two or more days.

They are now starting fresh tests to see if it does the same for COVID-19, and are recruiting volunteers for the trial dubbed COVID-19 ELVIS, for Edinburgh and Lothians Viral Intervention Study.

“As COVID-19 is a new strain of coronavirus we do not know if nasal washout and gargling salty water will have the same effect as previously seen in other strains,” the Scottish team said.

The study hopes to see if it will “reduce the duration of symptoms and transmission to others in the same household.”

The team’s previous study, published last year, suggested that using salt water reduced common colds by an average of two-and-a-half days.

It suggests that certain human cells were able to use chloride ions — a component of sea salt — to create hypochlorous acid, which is the active ingredient in bleach and has antiviral properties.

Researchers want to test people as soon as they fall sick, only requesting people showing any of the key symptoms in the last 48 hours. Only half will use salt water to make comparisons.

They can then do everything from home, just filling out online diaries — and need nothing more than a supply of salt, the study says.

Professor Aziz Sheikh, director of the university’s Usher Institute, said they “hope it will prove to be a useful measure to reduce the impact and spread of the infection.”

“It only requires salt, water and some understanding of procedure so should — if found to be effective — be easy and inexpensive to implement widely,” he said, according to Science Focus.

https://nypost.com/2020/06/25/scientists-test-if-gargling-salt-water-helps-treat-coronavirus/

Fed to cap bank dividend payments following pandemic analysis

The U.S. Federal Reserve announced on Thursday it will cap big bank dividend payments and bar share repurchases until at least the fourth quarter after testing bank finances against a potential severe economic slump from the coronavirus pandemic.

In its analysis, the Fed found that the country’s largest lenders have struggled to model the unprecedented downturn and ensuing rescue programs, adding to already unprecedented uncertainty about how banks and the economy overall would perform in the coming months.

The Fed did not say how each bank fared under the pandemic analysis, but found the 34 tested firms could suffer as much as $700 billion in loan losses under the most severe “W-shaped” pandemic recovery.

The findings, added to the Fed’s annual stress test of the nation’s biggest banks including JPMorgan Chase & Co (JPM.N) and Goldman Sachs Group Inc (GS.N), showed that banks could weather a severe, tumultuous and prolonged economic downturn, but several firms would cut close to their minimum capital requirements.

With that in mind, the Fed announced it was setting a cap on how much firms could pay to investors in dividends in the third quarter. Banks cannot pay more than they did in the second quarter, and their maximum cannot be more than each firm’s average net income over the last four quarters.

The Fed also said it was barring share repurchases for the banks for at least the third quarter – a move the nation’s largest lenders had already voluntarily taken for the second quarter as the pandemic took hold.

https://www.reuters.com/article/us-usa-fed-stresstests/federal-reserve-to-cap-bank-dividend-payments-following-pandemic-analysis-idUSKBN23W3AA

Diabetes prevention signal emerges for Farxiga

SGLT2 inhibitors primarily treat diabetes, with benefits also seen in heart and kidney diseases. Might they also help prevent diabetes in the first place?

An intriguing diabetes prevention signal was reported in a cut of Farxiga’s heart failure study, Dapa-HF, at the Annual Diabetes Association annual meeting this month. Investigators found that over the course of the study Astrazeneca’s SGLT2 inhibitor reduced the risk of participants developing type 2 diabetes by almost a third.

Farxiga is effectively already available in this setting; its recently-granted heart failure indication is not limited to diabetics. But cardiologists represent a nascent market for SGLT2 inhibitors, and comments made at ADA suggest that this finding will help drive sales in Farxiga’s new use; the data might also spur endocrinologists to consider using these agents earlier in diabetes management.

“Prevention of diabetes resonates with all of us, whether you are an endocrinologist, a cardiologist, or a general physician,” said Dr Subodh Verma, a cardiologist at Michael’s Hospital in Toronto, at a session to discuss the Dapa-HF study. “These are really exciting new data.”

The diabetes prevention analysis was pre-specified in the study protocol, but the finding can only be considered exploratory. Dapa-HF was primarily a heart failure trial, which recruited 4,774 patients with reduced ejection fraction (HFrEF); around half the subjects did not have diabetes when they entered the study, and these were split evenly between active and control cohorts.

Of these non-diabetics, 4.9% of 1,298 in the dapagliflozin arm went on to develop type 2 diabetes over 18 months, versus 7.1% of 1,307 in the placebo group. This equated to a 32% risk reduction (p=0.019).

There are limitations to this analysis, Dr Silvio Inzucchi, lead investigator of Dapa-HF and professor of medicine at the Yale University School of Medicine, pointed out in his presentation at ADA, including relatively short follow-up, and the fact the study was not designed as a pure diabetes reduction trial.

However, he said that in the cohort of patients without diabetes at baseline Farxiga had a minimal effect on HbA1c or body weight. This suggests that SGLT2 inhibition is not merely masking the development of diabetes, Dr Inzucchi said, a concern that has been raised in the wake of other diabetes prevention studies with other glucose lowering agents.

Dr Inzucchi & ADA

Nothing is specifically approved to prevent diabetes, although metformin is used in certain patients with pre-diabetes, and indeed many countries’ treatment guidelines recommend it. The prevention signal in Dapa-HF was primarily seen in patients on their way to becoming diabetics.

Metformin, which has long been generic, is considered to have the most evidence backing its use in prevention, largely based on a 20-year-old trial called the Diabetes Prevention Programme. This found that it reduced risk of patients with impaired glucose tolerance developing diabetes by 31%.

Dapa-HF finding a 32% risk reduction “suggest that in the HFrEF population perhaps consideration should be given to tweaking those guidelines to include the possibility of a SGLT2 inhibitor as baseline therapy, even before metformin”, Dr Inzucchi said.

He appeared to go even further, when asked whether endocrinologists should start rethinking the mantra that metformin is the first drug reached for to treat diabetes.

“Is there a mandate to use metformin outside of diabetes guidelines over and above a SGLT2, particularly in patients with established cardiovascular disease? I’d have to say no,” he stated. “It’s mostly tradition that we use metformin. And many patients will require at least two drugs, so why not use metformin along with an SGLT2?”

All this will be music to the ears of makers of SGLT2 inhibitors, of course. As well as Astrazeneca, Lilly and Boehringer Ingelheim, which jointly sell Jardiance, and Johnson & Johnson, with Invokana, have invested in huge clinical programmes to extend the reach of these drugs into cardiac and renal settings. And, as evidence of these agents’ broadly protective benefits has mounted, sales forecasts have surged.

The mechanisms behind the wide benefits seen with SGLT2 inhibitors are not fully understood, although most agree that many different pathways are likely to be in play.

Dr Jeffrey Testani, head of heart failure research at Yale, described the SGLT2 inhibitors as “smart diuretics”. He also predicted big uptake in the HFrEF setting, pointing out that existing medications were hard to use, required careful titration and carried safety concerns.

SGLT2s’ “big advantage is that they are easy to use, and at the end of the day make people feel better,” he said at an ADA presentation. He also pointed out that patients with both heart failure and type 2 diabetes had a very bad prognosis; another exploratory analysis of Dapa-HF found that patients who did develop diabetes during the trial experienced a 70% increase in mortality.

SGLT2 inhibitors promote the loss of salt and glucose through the urine, and a cascade of physiological adaptations to this process could be providing a preventative benefit, speculated Joris Silon, senior vice-president of Astrazeneca’s cardiovascular, renal and metabolism unit. “You get this metabolic flexibility, which restores normal functions in the body.”

Growing evidence

Astrazeneca is unlikely to start any specific diabetes prevention studies with Farxiga, Mr Silon said, or seek a diabetes prevention indication. Real-world evidence might be gathered to add to this finding, however.

This might be just around the corner: the Dapa-CKD study, testing Farxiga in patients with chronic kidney disease, also includes an exploratory diabetes prevention analysis. The trial was stopped early for efficacy in March. The Credence study of J&J’s Invokana won that drug approval in diabetics with CKD, but it did not enrol non-diabetics.

As in Dapa-HF, the big question is whether non-type 2, CKD patients will benefit to the same extent as those with diabetes. Mr Silon said he had not seen the Dapa-CKD result, but hoped for a strong outcome. “Because we stopped the trial for overwhelming success, it means that the cardio-renal protection is there … whether you are type 2 diabetic or not.”

Reducing the risk of end-stage renal disease or death in all CDK patients will be the big win here, in much the same way that reducing heart failure hospitalisations and deaths for all patients was the goal in Dapa-HF. A second diabetes prevention signal could be considered the icing on the cake for this drug class, which continues to demonstrate benefits in an ever wider pool of patients.

https://www.evaluate.com/vantage/articles/analysis/vantage-points/diabetes-prevention-signal-emerges-farxiga

Important catalysts approach for smaller biotechs

Crucial clinical data are expected in the third quarter for small to mid-sized players including Beigene, Turning Point, Intra-cellular and Immunovant.

With the third quarter nearly upon us Evaluate Vantage has looked at important events approaching for the smaller players – those with a market cap between $1.5bn and $14bn. While the filing for Biogen’s controversial Alzheimer’s project dominated the catalysts for the larger drug makers, here nearly half of upcoming data reveals are oncology-related.
One such event is Beigene’s Sequoia trial of Brukinsa, a BTK inhibitor, in treatment-naive chronic or small lymphocytic lymphoma. The expected data are from cohort one, made up of 420 subjects without the difficult-to-treat 17p deletion. Here Brukinsa is up against Treanda plus Rituxan, and the primary endpoint is progression-free survival.
Data released at Ash on 109 patients with the 17p deletion showed that Brukinsa monotherapy, at a median follow-up of 10 months, yielded an overall response rate of 93%, including a complete remission rate of 1.9%. 36.7% of patients experienced a serious adverse event, the most common being neutropenia, pneumonia and hypertension. There was also one treatment-related death.
Brukinsa is approved for relapsed/refractory mantle cell lymphoma, but CLL is a bigger opportunity. However, the market is dominated by Abbvie and J&J’s BTK inhibitor Imbruvica. Leerink analysts reckon that, if Brukinsa can confirm better safety than Imbruvica on atrial fibrilliation and major haemorrhage, Beigene could start to take market share.
Notably Alpine, a head-to-head study against Imbruvica, should read out next year, this time in relapsed/refractory CLL.
Sticking with oncology, Turning Point’s selective kinase inhibitor repotrectinib is in a registrational phase II study, Trident-1, in advanced solid tumours harbouring Ros1, NTRK or ALK rearrangements, including subjects who have failed prior therapies. The third quarter will see preliminary data from 30-40 patients across multiple cohorts.
In the trial’s phase I portion there was a 91% overall response rate in tyrosine kinase inhibitor-naive Ros1-positive NSCLC. The ORR was 36% for pretreated patients.
Treatments are needed for patients failing front-line drugs like Pfizer’s Xalkori. However, repotrectinib has exhibited some worrying toxicities, the earlier data showing that around half of patients experienced dizziness. A case of sudden death has also been judged possibly related to treatment.
Other therapy areas
Elsewhere, Study 402 tests Intra-cellular’s Caplyta as an adjunctive treatment in depressive episodes associated with bipolar-I or bipolar-II disorder. 520 patients are enrolled and are taking the mood stabilisers lithium or valproate.
The drug already has one positive global trial, study 404, in the bag, but a US trial, study 401, failed. Both tested Caplyta monotherapy; the 401 failure was said to be due to a high placebo response.
Intra-cellular hopes to file on a single positive trial, possibly with supportive data, so even if the latest study, 402, misses statistical significance the idea is that it could still provide the support. Caplyta is approved in schizophrenia, but bipolar is a bigger opportunity; if the label only permits adjunct use this would limit its market.
Immunovant’s IMVT-1401 is an anti-FcRn MAb being tested in myasthenia gravis, an IgG-driven autoimmune condition. Immunovant could have the edge over competitors as its project is subcutaneous and so far other groups have only released data from intravenous therapies.
Immunovant’s phase II Ascend-MG trial has given 21 patients once-weekly 340mg or 680mg IMVT-1401 versus placebo for six weeks. The primary outcome measure includes safety and changes in baseline IgG levels. MG-ADL, a change on symptom scale, is a secondary endpoint.
Competing trials have shown placebo-adjusted response rates on MG-ADL of 40% for Argenx’s efgartigimod, and 36.5% for Momenta’s nipocalimab. Both have subcutaneous versions in earlier development, while UCB’s own version, rozanolixizumab, has phase III data due next year.
The following table notes additional third-quarter events for mid-sized groups. Evaluate Vantage has separately assessed expected catalysts for larger drug makers, and a further analysis covering companies with a market cap below $1.5bn will follow.

Q3 clinical catalysts (excludes Covid-19 data) for companies with market cap $1.5-14bn*
Project	Company	Therapy area	2026e indication sales ($m)	Q3 clinical catalyst	Vantage note/story link
Trodelvy	Immunomedics	Breast cancer	2,154	Topline from confirmatory Ascent trial	Ascent terminated early for efficacy; Trodelvy gained accelerated approval
LN-144 (lifileucel)	Iovance	Melanoma	1,473	Pivotal phase II NCT02360579	Primary endpoint disclosure from cohort 4, which Iovance expects to support US filing
Caplyta (lumateperone)	Intra-Cellular Therapies	Bipolar depression adjunct	1,086	Phase III study 402	See text
Brukinsa (zanubrutinib)	Beigene	1L CLL	1,018	Topline results from cohort 1 of Sequoia	See text
Sage-217 (zuranolone)	Sage	Major depressive disorder	1,012	Topline from phase III Shoreline study	Mountain study failed; Shoreline studies zuranolone as needed retreatment
Transcon PTH	Ascendis	Hypoparathyroidism	815	6mth data from open-label extension of Path forward trial	Positive data from four-week fixed-dose portion; ph3 starts in Q4
Repotrectinib	Turning Point	Solid tumours	795	Phase II portion of pivotal Trident-1 study in ROS1+ NSCLC	See text
Nuplazid (pimavanserin)	Acadia	Major depressive disorder adjunct	766	Combination of Clarity-2 and Clarity-3, with pre-specified analyses	If positive company will submit sNDA with phase II Clarity-1 study, if negative another ph3 starts in H2
Zepzelca (lurbinectedin)	Jazz/ Pharmamar	2L SCLC	399	Confirmatory ph3 Atlantis (doxorubicin combo)	Accelerated approval as monotherapy based on a single-arm  study
Ublituximab	TG	Relapsing-remitting MS	239	Phase III Ultimate I and II trials, data H2	Pivotal data
Voclosporin Ophthalmic Solution	Aurinia	Dry eye syndrome	223	Phase II/III Audrey, dose ranging trial	Previous phase II showed superiority vs Restasis
IMVT-1401	Immunovant	Myasthenia gravis	222	Phase IIa Ascend-MG	See text
Vynpenta (avacopan)	Chemocentryx/ Vifor	Hidradenitis suppurativa	72	Phase IIb Aurora	Filing expected mid-year; Inflarx’s similarly acting IFX-1 failed last year
Cabometyx	Exelixis	Thyroid cancer	–	Pivotal phase III Cosmic-311 trial, H2	Interim ORR and PFS data due for first 100 subjects
*Market cap date June 22, 2020. Sources: EvaluatePharma sales by indication data, company releases, analyst notes & clinicaltrials.gov. https://www.evaluate.com/vantage/articles/events/company-events/important-catalysts-approach-smaller-biotechs