This Week in Biotech #27
Catch up on the latest biotech breakthroughs and upcoming trends (Nov 8-12).
Welcome to the Wednesday edition of This Week in Biotech by Biotech Blueprint.
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THIS WEEK’S KEY TAKEAWAYS 🔑
The biggest story this week so far has to be AbbVie’s rough 12% drop after the failure of their schizophrenia asset emraclidine. While the market panicked over a failed trial from their $8.7B Cerevel acquisition from this August, the big picture is more nuanced. Yes, the drug was a key asset, but Cerevel’s pipeline has more to offer than just one drug - they’ve got promising candidates in both Parkinson’s and Alzheimer’s that could still make this deal worthwhile for AbbVie. What’s interesting here is how quickly the market shifted in Bristol Myers Squibb’s favor (up 10%) now that their recently approved schizophrenia drug KarXT is facing even less competition.
However, the timing isn’t the greatest for AbbVie, which is already grappling with sharply declining revenue from Humira following its loss of exclusivity in 2023. While the company’s betting on Skyrizi to fill the gap, Humira’s 30%+ revenue drop this year raises serious questions about growth trajectory.
This has also been a tough beginning of the week for clinical trial readouts across the board. RAPT’s 41% plunge after terminating their zelnecirnon program, Neurogene’s 35% drop on mixed Rett syndrome data, and Syndax’s 24% decline despite positive leukemia drug data show just how unforgiving the biotech market can be. Compare this to Novavax’s FDA hold removal on its COVID-flu combo vaccines. Despite an initial 11% pop, the stock couldn’t maintain those gains. This tells something important about current market sentiment: investors are heavily discounting good news while punishing bad news severely. These kinds of sentiment imbalances often present opportunities for patient investors willing to look past the headlines.
Under the radar, Citius’s combination therapy results with Keytruda deserve attention. A 27% objective response rate in heavily pretreated patients could be very promising. The chemotherapy-free regimen’s strong safety profile and 57-week median progression-free survival for responders suggest significant potential that the market might be overlooking.
Lastly, Humacyte’s bioengineered tissue product updates suggest positive momentum in their FDA review. While their PDUFA date was initially set for Aug. 10, recent discussions about post-marketing and labeling matters hint at potential approval. Their product’s demonstrated lower rates of amputation and infection compared to synthetic grafts, combined with real-world evidence from Ukraine, make this a compelling story to watch. BTIG maintains a Buy rating on Humacyte and a $10 price target.
I hope you find this week’s edition interesting. Here’s to another interesting week in biotech!
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MARKET UPDATES
🔹 On Nov. 12, Syndax Pharmaceuticals announced positive topline results from the phase 2 portion of its AUGMENT-101 trial for revumenib, an oral therapy targeting relapsed or refractory mutant NPM1 acute myeloid leukemia. The trial met its primary endpoint with a complete remission of 23% and an overall response rate of 47% in a heavily pre-treated patient population. Revumenib also demonstrated a favorable safety and tolerability profile, with 5% of patients discontinuing due to treatment-related adverse events, which might be the reason why the company shares are down nearly 24%. Syndax plans to file a supplemental new drug application for revumenib in the first half of 2025, contingent on the anticipated FDA approval for revumenib in relapsed or refractory KMT2A-rearranged acute leukemia by Q4 2024.
🔹 On Nov. 11, Cigna confirmed that it is not pursuing an acquisition of Humana, ending months of speculation about a potential merger. Cigna’s statement emphasized its focus on acquisitions that align strategically, are financially attractive, and have a high likelihood of closing. This announcement led to a more than 7% drop in Humana’s stock, while Cigna’s shares rose 7%. While Cigna and Humana had explored merger talks last year, disagreements over pricing and investor concerns led to a halt.
🔹 Neurogene’s stock plummeted approximately 35% in after-hours trading on Nov. 11, following the release of interim phase 1/2 clinical trial data for NGN-401, a gene therapy aimed at treating Rett syndrome. While the low-dose cohort (ages 4-7) showed promising results, including significant improvements in key clinical measures like the Clinical Global Impression Scale and the Rett Syndrome Behavior Questionnaire, the market reacted negatively due to concerns over adverse effects. Neurogene reported treatment-related adverse events in some participants, including known risks associated with adeno-associated virus (AAV) therapies, though most were resolved or responding to treatment. The company has initiated an adolescent/adult cohort and plans to provide further trial updates in 2025.
🔹 On Nov. 11, RAPT Therapeutics (RAPT) announced the termination of its zelnecirnon (RPT193) program following a clinical hold by the FDA due to a serious adverse event (SAE) of severe liver injury in a patient. The program, which was evaluating zelnecirnon in phase 2 trials for asthma and atopic dermatitis, was placed on hold in Feb. 2024, and the trials were closed before completing enrollment. The company, based on recent FDA feedback, has decided there is no viable path forward for zelnecirnon. Despite this setback, RAPT remains focused on advancing its next-generation CCR4 compounds and expects to identify a new candidate by mid-2025. Following the news, RAPT’s stock dropped 41%.
🔹❗ On Nov. 11, AbbVie’s (ABBV) stock fell over 12% following the disappointing results from its phase 2 EMPOWER trials for emraclidine, a drug being tested for schizophrenia. The trials did not meet their primary endpoint, showing no significant improvement in the PANSS score compared to the placebo. Despite the setback, AbbVie stated that emraclidine was well-tolerated, with adverse events similar to earlier trials. This asset was acquired from Cerevel for $8.7B. Meanwhile, the stock of AbbVie’s rival Bristol Myers Squibb (BMY), whose schizophrenia drug KarXT was approved by the FDA earlier this year, jumped over 10%.
🔹 On Nov. 11, Novavax (NVAX) announced that the FDA has lifted the clinical hold on its COVID-19-Influenza Combination (CIC) and stand-alone influenza vaccine candidates, clearing the way to resume its phase 3 trials. The hold was due to a serious adverse event in a phase 2 trial, which was later determined to be unrelated to the vaccine. Initially, the stock surged by 11%, but by 10:30 AM on Nov. 11, it had returned to pre-announcement levels.
🔹 On Nov. 8, Ardelyx (ARDX) saw its stock plunge ~20% after a U.S. District Court dismissed its lawsuit against the Centers for Medicare and Medicaid Services (CMS). The lawsuit, filed in July, sought to prevent CMS from including Xphozah (tenapanor) and other oral-only phosphate-lowering therapies in the Medicare End-Stage Renal Disease Prospective Payment System, a bundled payment system for dialysis services. The court ruled in favor of CMS. Ardelyx argued that this move could severely limit dialysis patients’ access to Xphozah. The company emphasized that Xphozah, being an oral-only therapy, is not administered by dialysis providers, and therefore, if included in the system, it could lose its Medicare Part D coverage, potentially leading to delays in patient access. The company was also downgraded by Wainwright due to Xphozah sales drop expected in Q1 2025.
BIOTECH NEWS
🔹 Vesalius Therapeutics has entered a strategic alliance with GSK to develop treatments for Parkinson’s and another neurodegenerative condition. Vesalius will use its proprietary platform, incorporating genetics, genomics, stem cell models, and AI, to identify novel therapeutic targets for GSK to advance. As part of the deal, GSK gains global rights to a preclinical small molecule program focused on Parkinson's disease, with options to further develop other targets identified by Vesalius. The agreement includes $80M upfront to Vesalius, with potential milestone payments totaling up to $570M, as well as tiered royalties on future products.
🔹 Formation Bio, in partnership with Sanofi and OpenAI, introduced Muse, an AI tool designed to streamline patient recruitment in drug development. By leveraging AI, Muse shortens the typically lengthy recruitment process from months to minutes, addressing a major bottleneck in clinical trials. The tool analyzes scientific literature and real-world data to generate recruitment strategies, identify optimal patient profiles, and create tailored recruitment materials in multiple formats and languages. Muse aims to improve patient representation in trials, enhancing inclusiveness and generating more diverse data. It includes a compliance feature for regulatory guidelines and emphasizes AI safety and data privacy. Sanofi will pilot Muse in phase 3 multiple sclerosis trials.
🔹❗On Nov. 11, 23andMe announced a restructuring plan to streamline operations, reduce costs, and focus on its core consumer and research partnership business. The restructuring involves a 40% workforce reduction (over 200 employees) and is projected to save $35M annually. Additionally, 23andMe is discontinuing its therapeutics division and exploring strategic alternatives for its clinical and preclinical therapeutic programs, including potential sales or licensing deals. Key programs affected include 23ME-00610, an antibody designed to help the immune system target cancer, and 23ME-01473, aimed at restoring anti-tumor immunity. Both programs, showing preliminary efficacy, will have their clinical trials wound down while 23andMe seeks external partnerships.
🔹 On Nov. 11, Arcturus Therapeutics received FDA clearance to begin a phase 1 clinical trial for its H5N1 pandemic flu vaccine candidate, ARCT-2304. This self-amplifying mRNA vaccine aims to prevent H5N1 influenza. The trial, which will enroll approximately 200 healthy adults, will assess the vaccine’s safety, reactogenicity, and immunogenicity. ARCT-2304 is designed to achieve enhanced antigen expression with lower doses than conventional vaccines, offering quicker availability and simplified cold-chain storage.
🔹 On Nov. 8, Autolus Therapeutics announced that the FDA approved Aucatzyl (obecabtagene autoleucel or obe-cel) for the treatment of adult patients with B-cell acute lymphoblastic leukemia. This approval follows promising results from the FELIX clinical trial, where 63% of efficacy-evaluable patients achieved complete remission, and 42% reached complete remission within three months, with a median duration of remission of 14.1 months. Aucatzyl demonstrated a favorable safety profile with low rates of cytokine release syndrome and immune effector cell-associated neurotoxicity syndrome. The therapy will be manufactured at Autolus’ facility in the UK and distributed in the U.S. by Cardinal Health. Aucatzyl is also under review in the EU and UK.
🔹 Humacyte announced that the FDA is still reviewing its biologics license application for its Acellular Tissue Engineered Vessel (ATEV), aimed at treating vascular trauma. While the FDA has not provided a timeline for completing the review, Humacyte remains confident in the product’s approval based on ongoing discussions and inspections. The application, submitted in Dec. 2023, received a priority review designation, and the FDA has engaged in talks regarding post-marketing and labeling matters. Humacyte also made progress in other areas, including presenting positive data from its V007 phase 3 trial for hemodialysis access, and it secured an additional Regenerative Medicine Advanced Therapy (RMAT) designation for ATEV in advanced peripheral artery disease. The company continues to focus on advancing ATEV in multiple vascular indications while awaiting regulatory decisions.
🔹 Nkarta reported its Q3 2024 results, announcing a shift in its strategic focus away from NKX019 development for non-Hodgkin lymphoma. Despite promising results in a cohort of patients with large B-cell lymphoma, including partial and complete responses, the company has decided to forgo further non-Hodgkin lymphoma drug development. Instead, Nkarta will prioritize advancing NKX019 for autoimmune diseases, including lupus nephritis, systemic sclerosis, and myositis, with ongoing trials like Ntrust-1 and an investigator-sponsored trial for systemic lupus erythematosus. The company remains well-funded, with $405.3M in cash, expected to sustain operations into late 2027.
🔹 In its Q3 2024 report, Charles River Laboratories highlighted challenges in maintaining revenue growth, largely due to reduced spending by biopharma clients facing their own restructuring and prioritization shifts. CEO James C. Foster noted that although demand indicators remained relatively stable, the company is operating in a difficult environment as clients navigate tighter budgets and shifting priorities. Foster emphasized the company’s strategy of “aggressively managing” costs, improving client relationships, and focusing on becoming a leaner and more efficient organization. A key part of this strategy includes restructuring initiatives such as site consolidations and closures aimed at reducing overhead.
CLINICAL TRIAL UPDATES
🔹 On Nov. 12, Syros Pharmaceuticals announced that its phase 3 SELECT-MDS-1 trial, testing tamibarotene with azacitidine for myelodysplastic syndrome patients with RARA gene overexpression, did not meet its primary endpoint. The complete response rate in the treatment group was 23.8% compared to 18.8% in the control group, but the difference was not statistically significant. Due to this outcome, Syros will discontinue the study, review the data, and determine next steps. This failure also triggers a default under its loan with Oxford Finance LLC.
🔹 On Nov. 11, Citius Pharmaceuticals and Citius Oncology announced promising preliminary results from an ongoing phase 1 clinical trial investigating the combination of Keytruda and Lymphir (denileukin diftitox-cxdl) in patients with recurrent solid tumors, particularly gynecological cancers like ovarian, endometrial, and cervical cancer. The trial, which is nearing completion with only three patients left to enroll, showed a 27% objective response rate and a 33% clinical benefit rate. The median progression-free survival for those who achieved clinical benefit was 57 weeks. The chemotherapy-free regimen was well-tolerated, with no serious immune-related adverse events reported. The combination therapy showed promise, especially in patients who had previously failed anti-PD-1 therapy. The phase 1 trial will continue to explore the impact of this combination across a broader range of solid tumor types, with plans to expand research in a phase 2 study.
🔹 On Nov. 9, Ultragenyx Pharmaceutical presented phase 1/2 data for GTX-102, an investigational antisense oligonucleotide, at the 2024 Foundation for Angelman Syndrome Therapeutics (FAST) Global Science Summit. The data demonstrated improvements in cognition and other domains in pediatric patients with Angelman syndrome. The ongoing phase 3 Aspire study, which will enroll about 120 patients, is set to begin by the end of 2024, aiming to assess GTX-102’s efficacy, with a primary focus on cognition. Results from the phase 1/2 study show significant improvement in cognitive scores, suggesting the phase 3 study is well-powered to detect treatment effects. GTX-102 showed a favorable safety profile and has received multiple designations from the FDA and EMA.
🔹 On Nov. 8, Amgen and AstraZeneca reported that Tezspire (tezepelumab-ekko) successfully met both co-primary endpoints in treating chronic rhinosinusitis with nasal polyps in a recent phase 3 trial (WAYPOINT). The study showed that Tezspire significantly reduced nasal polyp size and congestion in patients compared to a placebo, marking a potential new treatment for this inflammatory condition, which often requires corticosteroids or surgery. TEZSPIRE is a monoclonal antibody targeting TSLP, a cytokine involved in airway inflammation, and is already approved for severe asthma. The collaboration between the companies splits costs and revenues, with Amgen handling manufacturing and both sharing commercialization duties in North America.
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