Cantor, Blair Cut Aravive, Grappling With Trial Setback, Strategic Alternatives

Monday, Aravive Inc 

ARAV-23.6%+ Free Alerts

 filed its quarterly 10Q for the quarter ended 30 June with the SEC.

To preserve cash, the company terminated Phase 1b/P2 trials of batiraxcept in Clear Cell Renal Cell Carcinoma (ccRCC) and pancreatic adenocarcinoma. It will not continue either the ccRCC or the pancreatic adenocarcinoma programs unless it raises additional capital. 

Earlier this month, Aravive's Phase 3 AXLerate-OC trial evaluating batiraxcept in platinum-resistant ovarian cancer did not meet its primary endpoint of progression-free survival (PFS) in the pre-specified subset of patients naïve to prior bevacizumab treatment. 

Advancing ccRCC or pancreatic cancer program would require the company to raise significant additional capital or engage a strategic partner, which would be very difficult in light of recent PROC trial results and market conditions. 

Aravive estimated that a Phase 2 clinical trial of batiraxcept in renal cancer patients will require funding of between $30-$50 million and that a Phase 3 clinical trial of batiraxcept in ccRCC patients will require funding of between $80-$100 million. 

The company is exploring various strategic alternatives.

Suppose the company does not raise capital or successfully engage a strategic partner in the next several weeks. In that case, Aravive will be forced to cease operations, liquidate assets and possibly seek bankruptcy protection or engage in a similar process.

 In August, the company's Board of Directors approved a workforce reduction of approximately 70% of the current employee base. 

Cantor Fitzgerald downgraded the ARAV stock to Neutral from Overweight (OW) and lowered the price target to $0.25 from $18, driven by removing sales for batiraxcept.

Following the setback in platinum-resistant ovarian cancer, William Blair downgraded the stock to Market Perform.

The analysts Andy Hsieh and Alexandra Ramsey say that based on the minimal clinical activity of batiraxcept observed in the Phase III AXLerate-OC trial, confidence in its potential success in other indications is reduced.

Given the capital constraint, William Blair views the prospect of reinvigorating the batiraxcept program as unlikely, and it does not have sufficient visibility into management's plans to hold a favorable rating on the stock. 

https://www.benzinga.com/analyst-ratings/analyst-color/23/08/33989952/analyst-downgrades-aravive-grapples-with-trial-setback-strategic-alternatives

 Retailers with pharmacy businesses, including major players like Walmart Inc 

WMT-0.32%+ Free Alerts

, Kroger Company 

KR-0.80%+ Free Alerts

, and Rite Aid Corp 

RAD-3.31%+ Free Alerts

, are also seeing a boost in sales due to increased demand for prescription weight loss drugs. 

However, while this surge in popularity has the potential to drive foot traffic into stores, citing analysts CNBC points out that the profitability of these blockbuster treatments is rather minimal for retail pharmacies, and in some cases, they might even come with margin challenges.

Among the trending weight loss drugs are Novo Nordisk A/S's 

NVS-0.38%+ Free Alerts

 Wegovy, an obesity injection, and Ozempic, a diabetes treatment. 

Over the past year, their popularity has surged, with even high-profile figures like Elon Musk reportedly using them.

Considering that about 40% of U.S. adults are classified as obese, the weight loss drug market presents a substantial opportunity for pharmaceutical companies. 

This has led to significant interest from other drugmakers like Eli Lilly And Co 

LLY+0.66%+ Free Alerts

 and Pfizer Inc 

PFE-0.46%+ Free Alerts

, who are developing their versions of GLP-1s to capitalize on this potentially lucrative market. 

Analysts project that the weight loss drug market could reach a staggering worth of $200 billion by 2030.

However, the soaring demand for GLP-1s has a ripple effect throughout the entire drug supply chain, impacting drug manufacturers and pharmacies that dispense these prescription medications. 

Retailers like Walmart, Kroger, and Rite Aid are now discussing how these drugs contribute to their sales growth.

However, the impact of GLP-1 drugs extends beyond the pharmacy business of these retailers. 

Walmart and Kroger, for example, may indirectly benefit from the increased sales of these drugs, as they often lead to additional purchases in various categories. 

Analysts suggest that the margin challenges in the pharmacy division might be offset by increased foot traffic and subsequent purchases across other departments.

https://www.benzinga.com/general/biotech/23/08/33980022/gold-rush-in-weight-loss-industry-impacts-retailers-with-pharmacy-businesses

Medtronic raises forecast as demand for heart devices powers upbeat results

 Medtronic on Tuesday raised its annual profit forecast, after beating first-quarter estimates on higher demand for its medical devices used in heart and gastrointestinal surgeries.

A recovery in non-urgent procedures and easing staffing shortages following a decline in COVID-19 cases has boosted the demand for medical devices.

Medtronic, which makes pacemakers, catheters and other tools used in heart surgeries, now expects profit to be between $5.08 per share and $5.16 per share for the fiscal year 2024, compared with the range of $5 to $5.10 per share previously expected.

Analysts were estimating an annual profit of $5.05 per share, according to Refinitiv data.

The Dublin-based medical device maker, however, has previously warned that rising raw material prices and high wages due to inflation could hurt its full-year profit.

The company is looking to reduce costs with measures such as job cuts and offloading some of its smaller businesses to focus on heart and diabetes units.

Medtronic joins rivals, Abbott Laboratories, Stryker and Boston Scientific, that are benefiting from a rise in non-urgent surgeries.

Sales at Medtronic's heart devices unit, its biggest revenue driver, increased 5.5% to $2.85 billion for the first quarter, above analysts' estimates of $2.78 billion.

Medical surgical unit's revenue came in at $2.04 billion, compared with the estimates of $2.02 billion.

Revenue for the quarter rose 4.5% to $7.70 billion, topping analysts' average estimate of $7.57 billion.

Its adjusted profit of $1.20 per share for the quarter ended July 28 beat estimates of $1.11 per share.

https://finance.yahoo.com/news/1-medtronic-raises-annual-forecast-105338371.html

Vincerx: FDA Clears IND for VIP943

 Phase 1 trial expected to begin in early Q4 2023

VIP943 is Vincerx’ first candidate from next-generation ADC platform and its second IND clearance within 8 months, highlighting Vincerx’s development and regulatory expertise

Vincerx Pharma, Inc. (Nasdaq: VINC), a biopharmaceutical company aspiring to address the unmet medical needs of patients with cancer through paradigm-shifting therapeutics, today reported that it has received clearance for its Investigational New Drug (IND) application from the U.S. Food and Drug Administration (FDA) to initiate a Phase 1 clinical trial for VIP943. Vincerx expects to enroll the first patient in the study early in the fourth quarter of 2023.

https://finance.yahoo.com/news/vincerx-pharma-announces-fda-clearance-113000786.html

Apellis Updates on Injection Kits and Rare Safety Events with SYFOVRE® (pegcetacoplan injection)

 

• Internal structural variations were identified in the 19-gauge filter needle included in certain injection kits; Apellis recommends use of kits with the 18-gauge filter needle, which are already in distribution
  

• More than 100,000 vials have been distributed/administered between real world and clinical trials; since last update, confirmed one additional event of retinal vasculitis that occurred in May
  

Apellis Pharmaceuticals, Inc. (Nasdaq: APLS) (“the Company”) today provided an update on injection kits supplied by Apellis and an update on the rare events of retinal vasculitis reported in real-world treatment with SYFOVRE® (pegcetacoplan injection) for geographic atrophy (GA) secondary to age-related macular degeneration (AMD).

Recommended use of filter needles included in certain injection kits

As part of the comprehensive investigation into the real-world safety events, internal structural variations were identified in the specific 19-gauge x 1½ inch filter needle included in certain injection kits. Filter needles are used to withdraw treatment from the vial when preparing for an injection procedure. A causal relationship has not been established between the structural variations in this 19-gauge filter needle and the rare events of retinal vasculitis in the real world.

The Company recommends that practitioners immediately discontinue use of any injection kits that contain the 19-gauge filter needle and use injection kits with the 18-gauge filter needle, which are already in distribution. While injection kits previously contained one of two types of filter needles (either 18- or 19-gauge), Apellis is now exclusively distributing injection kits with the 18-gauge filter needle.

“Based on the findings from our investigation, we believe it is prudent that practitioners only use the kits with the 18-gauge filter needle, which are already in distribution. This recommendation is out of an abundance of caution as patient safety is our top priority,” said Caroline Baumal, M.D., chief medical officer of Apellis.

https://finance.yahoo.com/news/apellis-provides-updates-injection-kits-204300233.html