- Regeneron Pharmaceuticals (REGN +8.2%) is up on more than a 5x surge volume in apparent response to the use of its COVID-19 antibody cocktail, REGN-COV2, to treat President Trump who apparently plans to leave the hospital today.
- The President also received Gilead Sciences' (GILD +2.9%) Veklury (remdesivir) and dexamethasone as part his treatment.
- https://seekingalpha.com/news/3619913-regeneron-up-8-after-trump-treated-covidminus-19-antibody-cocktail
Monday, October 5, 2020
Regeneron up 8% after Trump treated with COVID-19 antibody cocktail
Crispr Therapeutics started with Buy at BofA
- Bank of America initiates coverage on Crispr Therapeutics (NASDAQ:CRSP) with a Buy rating and assigns a price target of $110.
- Analyst Geoff Meacham says "the company's technology platform has generated a de-risked and a potentially best-in-class curative therapy for transfusion-dependent beta-thalassemia and sickle cell disease, as well as a trio of next-gen allogeneic CAR-T therapies for both liquid and solid tumors"
- "These advancements could have superior safety and convenience benefits over the current generation of autologous CAR-Ts," Meacham writes.
- The company has recently gained accelerated review for CTX001 in Europe. Being co developed with Vertex, CTX001 is an autologous, ex vivo CRISPR/Cas9 gene-edited therapy for the treatment of severe sickle cell disease.
- https://seekingalpha.com/news/3619936-crispr-therapeutics-started-buy-bofa
Trump says will leave hospital on Monday, "Don't be afraid of Covid."
U.S. President Donald Trump said he will leave the U.S. military hospital where he was being treated for COVID-19 later on Monday, adding that he felt "really good."
"I will be leaving the great Walter Reed Medical Center today at 6:30 P.M. Feeling really good! Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!" he said on Twitter.
FDA to yank approval for Amag Pharma's Makena
- In a not-unexpected move, the FDA is proposing that AMAG Pharmaceuticals' (AMAG -6.0%) Makena (hydroxyprogesterone caproate injection), approved in the U.S. in February 2011 to reduce the risk of preterm birth in at-risk pregnant women, be removed from the market due to lack of efficacy.
- About a year ago, an FDA advisory group voted 13-3 that clinical data submitted by the company seeking full approval failed to demonstrate substantial evidence of effectiveness. Nine committee members backed withdrawal from the market while seven voted to leave it on the market under accelerated approval status with the proviso that a new confirmatory trial be conducted.
- Several weeks before the meeting, a customer advocacy group petitioned the FDA to withdraw the product.
- Makena accounted for over 42% of the company's Q2 revenue ($22.3M/52.8M).
- https://seekingalpha.com/news/3619898-fda-to-yank-approval-for-amag-pharmas-makena-shares-down-6
Concern About China's Coronavirus Vaccine Rush
China is set to expand its experimental coronavirus vaccine program to large portions of the population to distribute and test products before hitting global markets, the Financial Times reports.
What Happened: The Chinese government's experimental coronavirus vaccine program began in July to administer drugs for limited use. The vaccines were administered even though the final stage or phase 3 trials that confirm the overall efficacy and effectiveness had not been completed.
In an unexpected statement last month, state-owned Sinopharm Group SHTDY 0.61% revealed that thousands of people in China had already been administered the company's two leading experimental coronavirus vaccines, FT noted.
The statements from the government earlier this year suggested that the experimental program was restricted to frontline workers and state employees traveling overseas to high-risk areas. The details of the full program are still unclear.
In a bizarre move, the experimental vaccine program is being expanded to the general population, a move that is highly risky, according to health experts.
Health authorities in one of China's provinces have sought details of government employees willing to receive emergency use vaccines ahead of winter, as per FT.
The document accessed by FT had a long list of "target suggested recipients" that includes transport workers, overseas travelers to high-infection countries, frozen food logistics workers, staff in supermarkets or other enclosed spaces, and employees of schools, orphanages, jails, and elderly care homes.
Why It's Important: The scale and opacity of the program have raised safety and ethical concerns from medical experts.
"It is reckless and dangerous to distribute a minimally tested vaccine about which nothing has been published," said Arthur Caplan, professor of Bioethics at New York University Langone Medical Center told VOA news in an email. "Puts too many people at risk without opportunity to study safety and efficacy in a large group," he added.
"This practice can backfire if the rushed process causes a widespread distrust of the vaccine when fewer people are willing to take the vaccine. Or it can cause severe damages when vaccine complications were warned, due to the rushed trials," epidemiologist Dr. Jennifer Huang Bouey told VOA news.
China's health officials have defended the move by saying it is sanctioned by the World Health Organization, reports FT.
Bridgebio U-turn shows how money can be made twice over
The company becomes the third in two months to buy back a division it had spun out just a few years earlier.
It is clear that biotech investor exuberance has already turned 2020 into an outstanding year for flotations and share price performance. Perhaps less well appreciated is the scope that this has provided for financial engineering, affording companies – and their investment banking advisors – two shots at making money.
The latest example came courtesy of Bridgebio Pharma, which today decided to buy back the 36% of Eidos it did not already own; it had floated off the minority interest just two years ago. This follows Illumina’s move to spend $8bn reacquiring Grail and Ionis buying back Akcea, both of which had been spun out five years previously.
Of course, these moves are often driven by U-turns in management thinking. Ionis, for instance, had been buying back stakes in Akcea over several years, and the subsidiary was bought back fully only after a boardroom clearout (Ionis gives a lesson in financial engineering, March 16, 2018).
If at first
Today’s move by Bridgebio comes after an earlier attempt to reaquire Eidos was terminated last year. That initially comprised 1.3 Bridgebio shares for each Eidos share, but despite being sweetened twice – the final offer was 1.5 Bridgebio shares plus an option to receive part of this in cash – the parties could not agree on a suitable price.
They now seem to have found one: 1.85 Bridgebio shares, equivalent today to about $70, or alternatively $73.26 in cash up to a maximum total of $175m. Eidos ended last week at $51.92 per share, and today shot up 32% to just under the Bridgebio offer price.
How did Eidos get to this stage? The company, primarily focused on the transthyretin amyloid cardiomyopathy project AG10, had raised $106m in its June 2018 IPO at a valuation of about $625m. Before Bridgebio’s move today it had reached a market cap of $2bn, largely on the promise of AG10.
At the time the minority stake was floated Bridgebio was still privately held, but a year later it too listed its stock, becoming the biggest biotech IPO of 2019 when it brought in $349m.
Independent valuation
One way to understand Bridgebio’s actions over Eidos is to see the stock markets as a vehicle that the parent company has used to have an asset it owned independently valued. It seems highly unlikely that Bridgebio would have achieved such recognition for AG10 had this asset been internally held, and it might have struggled to close such a big IPO.
True, it can be criticised for letting go for $106m a stake that it is now having to pay $980m to reacquire. But, crucially, the whole time that Eidos stock was surging so was the implied value of the 64% majority stake that Bridgebio still owned – without Bridgebio having to lift a finger.
The added cost of investment banking fees pales into insignificance at a time when cash can be raised cheaply, and when an asset you already mostly own has tripled in value. The parent company, investors in it and in the subsidiary, and advisors all win.
In the meantime Bridgebio has had two bites at the valuation cherry: once for an independent Eidos and a second time for itself as Eidos’s majority owner. The risk around AG10, its pivotal study design and the need to compete against Pfizer all become problems for another day.
Bristol-Myers takeout of MyoKardia lifts Cytokinetics
- Cytokinetics (NASDAQ:CYTK) is enjoying a modest upsurge in premarket buying, +14% on modest volume, in apparent reaction to Bristol-Myers Squibb's $13.1B bid for MyoKardia, gaining access to its cardiovascular drug pipeline including lead candidate mavacamten, a modulator of cardiac myosin, a protein that drives heart muscle contraction.
- CYTK's pipeline includes a lineup of candidates for cardiac disorders including lead drug omecamtiv mecarbil for heart failure.
- https://seekingalpha.com/news/3619791-bristol-myers-takeout-of-myokardia-lifts-cytokinetics-up-14
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