Shira Gonen

About the Author Shira Gonen

Shira Gonen holds a Bachelor's degree in International Business from the Temple University in Philadelphia. Ms. Gonen joined the editorial team at TipRanks in November of 2015.

Analyst’s Wrap Up Digestive Disease Week: Synergy Pharmaceuticals Inc (SGYP), EXACT Sciences Corporation (EXAS), and Celgene Corporation (CELG)

Digestive Disease Week, an annual gathering of physicians and researchers in the fields of gastrointestinal surgery, hepatology, endoscopy, and gastroenterology, took place last week in San Diego. Among the many biotech companies at the conference were Synergy Pharmaceuticals Inc (NASDAQ:SGYP), EXACT Sciences Corporation (NASDAQ:EXAS), and Celgene Corporation (NASDAQ:CELG), which all presented data from various studies on pipeline and approved drugs related to digestive illnesses. Let’s take a closer look:

Synergy Pharmaceuticals Inc

Synergy presented data from two phase 3 clinical trials evaluating placanatide, the company’s pipeline treatment of chronic idiopathic constipation, or CIC. In both trials, the drug met its primary endpoint of improvement in complete spontaneous bowel movement improvements compared to a placebo, which is also the primary endpoint required for U.S. FDA regulatory approval. The results also indicated no worsening of bowel or abdominal symptoms after treatment, a low discontinuation rate, a statistically significant improvement in stool consistency, and a statistically significant improvement in constipation severity scores over the 12-week period.

Analysts were quick to weigh in on the new data. On May 25, 2016, analyst Michael Higgins of Roth Capital reiterated a Buy rating on the company with a $6.50 price target, commenting on the early success of the drug as positive results were measured after only a few weeks into the 12-week trial, which should “contribute to its commercial success.” The analyst believes this positive data should result in FDA approval of its New Drug Application in January.

The analyst compares plecanatide with competitor drug Linzess, manufactured by Allergan, stating that the former was more effective at reducing spontaneous bowel movements than its competitor. According to the analyst, plecanatide sales will not be as high as Linzess due to the latter’s first mover-advantage. However, that analyst believes that plecanatide will result in a “higher ROI in the first five years’ launches given the lower SG&A spending required of [the drug].”

Analyst Ram Selvaraju of Rodman & Renshaw also weighed in on the positive data, reiterating a Buy rating on the company with a $15 price target on May 23, 2016. The analyst believes in a high likelihood of FDA approval for plecanatide in January. He explains, “From our perspective, this additional data on various secondary endpoints underscores the potentially best-in-class risk/benefit profile of plecanatide in the CIC indication and emphasizes what we view as the drug’s strong likelihood of approval early next year for this indication in the U.S.”

According to TipRanks’ statistics, all 4 analysts who have rated the company in the past 3 months gave a Buy rating. The average 12-month price target for the stock is $11.38, marking a 216% upside from where shares last closed.

EXACT Sciences Corporation

At Digestive Disease Week, Exact Sciences presented various clinical data regarding its stool DNA screening platform for colorectal cancer and other techniques to detect gastrointestinal cancer and diseases. In 2014, the FDA approved the company’s noninvasive at-home screening test, Colonguard, which uses sDNA technology to detect colorectal cancer and precancer.

Data from the Mayo Clinic presented at DDW demonstrated that doctors who had knowledge that their patients had used a Cologuard test improved the colonoscopy performance compared to blinded doctors who were unaware of the Cologuard result.

CEO Kevin Conroy stated, “Building on the publication of strong clinical data supporting sDNA technology, followed by the FDA approval of Cologuard, we are pleased to see new clinical evidence backing this important screening option at this year’s DDW conference.” He continued, “Studies like these will continue to drive awareness and adoption of Cologuard and provides Exact Sciences with the preliminary data needed to advance our product pipeline.”

Following the presentations, analyst Sean Lavin of BTIG offered his commentary on the company, reiterating a Buy rating on the company with a $9 price target on May 23, 2016. The analyst believes the various studies served as “a guidepost to driving more successful colonoscopies.” Although a past Mayo Clinic study indicated that doctors spent less time performing colonoscopies on patients who had previously taken the Colonguard test, benefiting both the doctor and the patient. He explains, “One drawback for colonoscopies has been the variability of tests results, sometimes depending on endoscopist’s skill. We think incremental data showing the correlation of prior knowledge of a positive result and diagnostic yields enhances Cologuard’s value proposition to physicians.” As a result, the analyst believes Colonguard sets a new industry standard for colonoscopies.

According to TipRanks, out of the 4 analysts who have rated the company in the past 3 months, 3 are bullish and 1 remains on the sidelines. The average 12-month price target for the stock is $9.38, marking a 44% upside from where shares last closed.

Celgene Corporation

Celgene presented data from a clinical phase trial of an investigational oral antisense therapy, GED-0301, used to treat Crohn’s disease. The trial examined levels of the Smad7 protein in 166 adults who have moderate to severe Crohn’s disease. Patients with high levels of Smat7 cause anti-inflammatory pathways to function abnormally, which worsen inflammation.

Professor Giovanna Monteleone from the University of Rome Tor Vergata explained more on the study. He stated, “For patients with Crohn’s, disease severity and duration can influence the therapeutic effect of certain medicines.” He continued, “This subgroup analysis of data from the phase II study explored the effects of these factors on clinical response and clinical remission rates with GED-0301 — being investigated as an orally administered antisense therapy with a novel mechanism of action designed to act locally.”

Patients with Crohn’s Disease Activity Indexes of 220-400 received three doses of GED-0301 for 2 weeks and were examined for 10 weeks following. The results indicated that patients with more severe Crohn’s displayed a clinical remission with the 160 mg dose of GED-0301. Those treated with GED-0301 displayed a clinical response rate of 87.5% compared to 22.7% for those treated with the placebo in both week 2 and week 4. Similarly, remission rates ranged from 62.5% to 75% for the FED-0301 160 mg group compared to 5-24% for the placebo group.

Based on these positive findings, the company plans to move on to a phase 3 study.

Analyst John Sonnier of William Blair weighed in on the company on May 23, 2016, reiterating an Outperform rating on the company without a price target. While the analyst mainly commented on the potential success of Revlimid, its non-Hodgkin’s lymphoma treatment, the analyst also has a positive outlook on Celgene’s pipeline, specifically highlighting GED-0301 in Crohn’s disease. He states, “Celgene has the broadest pipeline in the biotech industry,” resulting in “increased investor interest.”

According to TipRanks’ statistics, out of the 14 analysts who have rated the company in the past 3 months, 13 gave a Buy rating while 1 remains neutral. The average 12-month price target for the stock is $142.30, marking a 34% upside from where shares last closed.

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