Biotech has been in a funk for over a week now, though Friday finished strong. iShares’ NASDAQ Biotechnology ETF (IBB) has been stuck hovering just below a key resistance level. That 366/67 level matters because the security has already twice before been rejected here. Traders will stand up and take note if a third rejection sends us lower, as the chart takes on the familiar look of a triple top. The equity’s next move could be quite telling of near-term sentiment – a breakout and everyone breathes a sigh of relief; a dip lower and unease about a more meaningful correction starts to set in.
ASCO came to a close early this week, and Oncothyreon Inc (USA) (NASDAQ:ONTY) was this year’s undisputed winner among biotech stocks, gaining 185% between May 13 (when abstracts from the conference were released) and the end of this week. Now, the company is planning a blinded and placebo-controlled phase 2 trial of ONT-380 in combination with Herceptin and Xeloda in HER2-positive metastatic breast cancer patients who have failed both Perjeta and Kadcyla. Given that ONT-380 had been used only as part of two- and three-drug combinations in the current phase 1 trials, this is exactly the kind of trial that needs to be run to understand the HER2 inhibitor’s true effect.
Though Innate Pharma SA (EPA:IPH) has a compelling approach to cancer treatment in harnessing the innate immune system, and a compelling asset in lirilumab, the latest data out of ASCO prompted us to suggest taking profits this week at a 60% gain from Mr. Fink’s deep dive in 2014. On top of what we see as ho-hum data out of ASCO, the timeline of events for Innate isn’t clear. Bristol-Myers’ Opdivo- combination study is still an unknown, and the company’s own phase 2 EffiKIR trial won’t be complete until the spring of 2016. You can read more about our rationale, here, along with further discussion of another emerging immunotherapy player, Affimed.
One event to which we’ll be paying close attention next week: a meeting of the Endocrinologic and Metabolic Drugs Advisory Committee on Tuesday, at which the panel will discuss the marketing application for Praluent (alirocumab), Regeneron Pharmaceuticals Inc (NASDAQ:REGN) and Sanofi’s PCSK9 inhibitor for the treatment of high cholesterol. The panel meeting is the first time in years that the high-profile group will discuss the relationship between lowering cholesterol (considered a biomarker) and reducing the risk of cardiovascular events (like heart attack and stroke). The companies hope to market Praluent to patients that can’t tolerate statins or aren’t able to control their cholesterol on statins alone. On Friday, the FDA released briefing documents for the meeting.
The publication of Merck & Co., Inc. (NYSE:MRK)’s IMPROVE-IT results this week in the NEJM (here) couldn’t be more timely. IMPROVE-IT tested the ability of Zetia (ezetimibe) plus a statin vs a statin alone to lower the risk of cardiovascular events in 18,000 patients over 7 years. The benefit of increased LDL-C lowering using ezetimibe on top of a statin was apparent in IMPROVE-IT, if only marginal. Regardless, the results support the common assumption that lowering cholesterol lowers a patient’s risk of a heart attack. The question for new assets like Praluent is whether they should have to prove a CV benefit prior to approval.