To say Biogen (BIIB) disappointed in a
big way on Friday would be an understatement.
With its second quarter earnings release on Friday morning the company lowered its full-year revenue guidance from growth of 14-16% over 2014 to growth of just 6-8%. Analysts had already expected revenue to come in below the company’s prior guidance, making the adjustment on already low expectations even more profound for investors. The stock slipped 20% in the session. Fortunately, our collective2 BioRunUp fund anticipated this move for a big portfolio gain.
Biogen cited slowing demand for Tecfidera, the company’s blockbuster treatment for multiple sclerosis launched just two years ago, as cause for the revision. Sales of the company’s other two mainstay MS drugs, Tysabri and Avonex, came in below estimates as well. The company assumes “limited” U.S. growth for Tecfidera during the rest of the year.
Biogen makes up over 7% of NASDAQ’s Biotech Index (NBI), which ended the Friday session down by 4%.
The first, long-awaited label for the class of cholesterol-lowering drugs known as PCSK9 inhibitors emerged on Friday with the approval of Regeneron’s (REGN) Praluent (alirocumab). The label includes a fairly broad swathe of hypercholesterolemia patients, though it fell short of a best case scenario for the drug developer - and its investors.
Regeneron and partner Sanofi (SNY) had hoped the label would include any patient with high cholesterol. Not so. The label limits the drug’s use to patients with familial forms of hypercholesterolemia (HeFH) or established heart disease whose risk of a heart attack or stroke is not adequately controlled on existing drugs, like the ubiquitous statins.
More profound for small- and mid-cap biotech investors was the label’s effect on Esperion Therapeutics (ESPR), which develops an oral cholesterol-lowering drug that’s a few years behind the PCSK9s. Investors were watching Praluent’s label for any indication of what the FDA might want from Esperion’s forthcoming phase III program, and whether the drug could be approved in a broad range of patients before the company finishes a multi-year cardiovascular outcomes study. It looks like that may be the case given Praluent’s label on Friday, given that Regeneron has yet to complete a CVOT study of their own. But, the market took a dim view of ESPR in late-day trading on Friday, sending the stock lower by 20%. We’ve written about Esperion in the past, and our take on what the Praluent label means for ETC-1002 can be read if you are a subscriber to the collective2 BioRunUp fund.
Affimed Therapeutics (AFMD) has been on an absolute tear all 2Q as investors put money to work in the few publicly traded multivalent antibody developers, like Macrogenics (MGXN) and Xencor (XNCR). With AFMD up over 150% since our initiation in the collective2 BioRunUp fund, we suggested peeling some off this Monday. Curious about the long thesis? Learn more by becoming a subscriber to the collective2 BioRunUp fund.
Tekmira Pharmaceuticals (TKMR) announced a name change and reprioritization of the pipeline this week. Soon to be known as Arbutus Biopharma (ABUS), the company will focus on its early Hepatitis B drug candidates, which came as part of a merger with OnCore Pharmaceuticals earlier in 2015. The company isn’t scrapping entirely its legacy platform – Lipid Nanoparticles – but will create a new business unit in which the existing clinical and preclinical assets will be housed. You can get a full run-down of the new Tekmira (or Arbutus), in our private forum for BioRunUp fund subscribers.
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