I like this part about CEO "Day" saying in the next few quarters, read on
"but CEO O'Day will likely take necessary steps in the next few quarters to restore investor confidence (read: acquisition instead of share buybacks)."
Biotech News Recap: Gilead Sciences' STELLAR Data Falls Short
Apr. 26, 2019 1:01 PM ET|1 comment | About: Gilead Sciences, Inc. (GILD), Includes: ALKS, LLY, MITO, MRK, SBBP
Jonathan Faison
Long only, biotech, event-driven
Marketplace
ROTY
(11,965 followers)
Summary
Failure of STELLAR-3 trial in NASH didn't come as surprise, given selonsertib's disappointing performance in the STELLAR-4 trial.
Gilead continues to pursue a combination approach in NASH with multiple collaborations inked recently. Recent wins with FINCH-1 and DISCOVER trials show it's not all bad news.
HIV business continues to look strong, but CEO O'Day will likely take necessary steps in the next few quarters to restore investor confidence (read: acquisition instead of share buybacks).
Stealth BioTherapeutics reported completion of an enrollment for MMPOWER-3 study with top-line results expected year-end.
Strongbridge Biopharma presented new secondary endpoint results from the phase 3 SONICS trial of Recorlev.
Looking for a community to discuss ideas with? ROTY features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »
Gilead Sciences (GILD) - The company announced that a phase 3 NASH study for key asset selonsertib failed to meet its primary endpoint. Dubbed STELLAR-3, the trial was investigating the oral inhibitor of ASK1 in patients with bridging fibrosis (F3) due to nonalcoholic steatohepatitis. The pre-specified endpoint was one-stage or greater of histologic improvement in fibrosis without worsening of NASH (by week 48). Not only was this an abject failure, but also the reverse dose response is alarming as well (9.3% of patients on 18mg dose and 12.1% on 6mg dose achieved primary endpoint). To top things off, the placebo arm performed even better than both active treatment arms (13.2% met primary endpoint). To be fair, the stock didn't react much as failure was already expected given that selonsertib flunked the STELLAR-4 study back in February.
Gilead seems hell-bent on continuing to pursue combination strategies in the NASH field, as seen with two recent collaborations inked in April (including a pact with Novo Nordisk (NYSE:NVO) to combine semaglutide, cilofexor and firsocostat in a clinical study). Another three-year pact with insitro involves discovering and developing NASH therapies utilizing the latter's human platform (applies machine learning, human genetics and functional genomics to generate and optimize unique in-vitro models).
Not all has been negative lately, as Gilead's partnership with Galapagos (NASDAQ:GLPG) notched a win with Week 24 results of the FINCH-1 study (both doses of selective JAK1 inhibitor filgotinib nailed the primary endpoint in adults with moderate to severely active rheumatoid arthritis). Filgotinib is thought capable of doing $4 billion or more in peak sales.
Also in March, positive results were announced concerning the DISCOVER phase 3 trial evaluating once-daily Descovy for HIV pre-exposure prophylaxis (as compared to Truvada) in men who have sex with men and transgender women at risk of sexually acquired HIV infection. Of 2,694 participants who received Descovy, seven HIV infections were reported, as compared to 15 HIV infections with Truvada (bone and renal safety profile was even more favorable).
Shares look like they've hit a bottom in the low $60s, and it's worth noting that the HIV business is showing signs of momentum (18% year-over-year increase in Q4). On the other hand, after an initially speedy launch, Yescarta sales growth looks flattish over the past couple quarters (Medicare proposal to increase payments for CAR T treatments could help). With over $30 billion in cash, many investors likely feel it's time for management to make a savvy acquisition as opposed to burning it on share repurchases (a few targets that come to mind include Viking Therapeutics (NASDAQ:VKTX), Galapagos and Madrigal Pharmaceuticals (NASDAQ:MDGL)).
Bottom line, the company's HIV business should continue to be a source of strength, which adds to its considerable cash stockpile. However, one would hope that instead of taking the easy route and buying back shares, management will truly put these resources to good use with a transformational takeout or at least a few logical bolt-on acquisitions. Roche's (OTCQX:RHHBY) Daniel O'Day (hired as CEO back in December) has his work cut out for him in regards to regaining investor confidence. My guess is in the next few quarters, he will start making the bold moves necessary to do just that.
Other News of Note
Merck (MRK) - The company announced top-line findings from the final analysis of the pivotal phase 3 KEYNOTE-062 trial evaluating KEYTRUDA as a monotherapy and in combination with chemotherapy for the first-line treatment of advanced gastric or gastroesophageal junction adenocarcinoma. Noninferiority to chemotherapy was demonstrated by the monotherapy arm, but the combination failed to provide superior overall survival or progression-free survival as compared to chemo alone.
Stealth BioTherapeutics Corp. (MITO)- The company announced completion of enrollment for MMPOWER-3 study. The pivotal study is evaluating daily subcutaneous injections of lead product candidate elamipretide in patients with primary mitochondrial myopathy followed by open label extension (40,000 patients diagnosed in the US with no approved therapies). It looks like there's a decent shot at success here given promising phase 2 data (showed benefit across multiple endpoints that encompassed skeletal muscle function and quality of life).
Strongbridge Biopharma (SBBP) - The company announced presentation of new secondary endpoint results from the phase 3 SONICS trial of Recorlev at the 2019 American Association of Clinical Endocrinologists Congress. Six months of maintenance therapy in patients with Cushing's syndrome led to substantial improvements in clinical signs and symptoms of the disease, as well as increases in quality-of-life outcomes and symptoms of depression.
Alkermes (ALKS) - The company announced appointment of C. Todd Nichols as Senior Vice President of Sales and Marketing (served prior as VP of Marketing and Sales, Inflammation and Immunology at Celgene (NASDAQ:CELG)).
Eli Lilly (LLY) - The company is working to facilitate a withdrawal of Lartruvo from the market for the treatment of advanced soft tissue sarcoma after the failure of the phase 3 ANNOUNCE study (was not able to improve survival for patients). Interestingly enough, the company is trying to ensure current patients continue to have access to the drug after it is withdrawn. To be fair, this isn't the first time a drug that received accelerated approval has flopped its confirmatory study. Another lesson to learn here is to be reminded of the risks inherent in biotech, as phase 2 data for this drug was quite strong with very high statistical significance achieved.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
GLTA and hopefully they can buy CYDY
HCIT
"but CEO O'Day will likely take necessary steps in the next few quarters to restore investor confidence (read: acquisition instead of share buybacks)."
Biotech News Recap: Gilead Sciences' STELLAR Data Falls Short
Apr. 26, 2019 1:01 PM ET|1 comment | About: Gilead Sciences, Inc. (GILD), Includes: ALKS, LLY, MITO, MRK, SBBP
Jonathan Faison
Long only, biotech, event-driven
Marketplace
ROTY
(11,965 followers)
Summary
Failure of STELLAR-3 trial in NASH didn't come as surprise, given selonsertib's disappointing performance in the STELLAR-4 trial.
Gilead continues to pursue a combination approach in NASH with multiple collaborations inked recently. Recent wins with FINCH-1 and DISCOVER trials show it's not all bad news.
HIV business continues to look strong, but CEO O'Day will likely take necessary steps in the next few quarters to restore investor confidence (read: acquisition instead of share buybacks).
Stealth BioTherapeutics reported completion of an enrollment for MMPOWER-3 study with top-line results expected year-end.
Strongbridge Biopharma presented new secondary endpoint results from the phase 3 SONICS trial of Recorlev.
Looking for a community to discuss ideas with? ROTY features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »
Gilead Sciences (GILD) - The company announced that a phase 3 NASH study for key asset selonsertib failed to meet its primary endpoint. Dubbed STELLAR-3, the trial was investigating the oral inhibitor of ASK1 in patients with bridging fibrosis (F3) due to nonalcoholic steatohepatitis. The pre-specified endpoint was one-stage or greater of histologic improvement in fibrosis without worsening of NASH (by week 48). Not only was this an abject failure, but also the reverse dose response is alarming as well (9.3% of patients on 18mg dose and 12.1% on 6mg dose achieved primary endpoint). To top things off, the placebo arm performed even better than both active treatment arms (13.2% met primary endpoint). To be fair, the stock didn't react much as failure was already expected given that selonsertib flunked the STELLAR-4 study back in February.
Gilead seems hell-bent on continuing to pursue combination strategies in the NASH field, as seen with two recent collaborations inked in April (including a pact with Novo Nordisk (NYSE:NVO) to combine semaglutide, cilofexor and firsocostat in a clinical study). Another three-year pact with insitro involves discovering and developing NASH therapies utilizing the latter's human platform (applies machine learning, human genetics and functional genomics to generate and optimize unique in-vitro models).
Not all has been negative lately, as Gilead's partnership with Galapagos (NASDAQ:GLPG) notched a win with Week 24 results of the FINCH-1 study (both doses of selective JAK1 inhibitor filgotinib nailed the primary endpoint in adults with moderate to severely active rheumatoid arthritis). Filgotinib is thought capable of doing $4 billion or more in peak sales.
Also in March, positive results were announced concerning the DISCOVER phase 3 trial evaluating once-daily Descovy for HIV pre-exposure prophylaxis (as compared to Truvada) in men who have sex with men and transgender women at risk of sexually acquired HIV infection. Of 2,694 participants who received Descovy, seven HIV infections were reported, as compared to 15 HIV infections with Truvada (bone and renal safety profile was even more favorable).
Shares look like they've hit a bottom in the low $60s, and it's worth noting that the HIV business is showing signs of momentum (18% year-over-year increase in Q4). On the other hand, after an initially speedy launch, Yescarta sales growth looks flattish over the past couple quarters (Medicare proposal to increase payments for CAR T treatments could help). With over $30 billion in cash, many investors likely feel it's time for management to make a savvy acquisition as opposed to burning it on share repurchases (a few targets that come to mind include Viking Therapeutics (NASDAQ:VKTX), Galapagos and Madrigal Pharmaceuticals (NASDAQ:MDGL)).
Bottom line, the company's HIV business should continue to be a source of strength, which adds to its considerable cash stockpile. However, one would hope that instead of taking the easy route and buying back shares, management will truly put these resources to good use with a transformational takeout or at least a few logical bolt-on acquisitions. Roche's (OTCQX:RHHBY) Daniel O'Day (hired as CEO back in December) has his work cut out for him in regards to regaining investor confidence. My guess is in the next few quarters, he will start making the bold moves necessary to do just that.
Other News of Note
Merck (MRK) - The company announced top-line findings from the final analysis of the pivotal phase 3 KEYNOTE-062 trial evaluating KEYTRUDA as a monotherapy and in combination with chemotherapy for the first-line treatment of advanced gastric or gastroesophageal junction adenocarcinoma. Noninferiority to chemotherapy was demonstrated by the monotherapy arm, but the combination failed to provide superior overall survival or progression-free survival as compared to chemo alone.
Stealth BioTherapeutics Corp. (MITO)- The company announced completion of enrollment for MMPOWER-3 study. The pivotal study is evaluating daily subcutaneous injections of lead product candidate elamipretide in patients with primary mitochondrial myopathy followed by open label extension (40,000 patients diagnosed in the US with no approved therapies). It looks like there's a decent shot at success here given promising phase 2 data (showed benefit across multiple endpoints that encompassed skeletal muscle function and quality of life).
Strongbridge Biopharma (SBBP) - The company announced presentation of new secondary endpoint results from the phase 3 SONICS trial of Recorlev at the 2019 American Association of Clinical Endocrinologists Congress. Six months of maintenance therapy in patients with Cushing's syndrome led to substantial improvements in clinical signs and symptoms of the disease, as well as increases in quality-of-life outcomes and symptoms of depression.
Alkermes (ALKS) - The company announced appointment of C. Todd Nichols as Senior Vice President of Sales and Marketing (served prior as VP of Marketing and Sales, Inflammation and Immunology at Celgene (NASDAQ:CELG)).
Eli Lilly (LLY) - The company is working to facilitate a withdrawal of Lartruvo from the market for the treatment of advanced soft tissue sarcoma after the failure of the phase 3 ANNOUNCE study (was not able to improve survival for patients). Interestingly enough, the company is trying to ensure current patients continue to have access to the drug after it is withdrawn. To be fair, this isn't the first time a drug that received accelerated approval has flopped its confirmatory study. Another lesson to learn here is to be reminded of the risks inherent in biotech, as phase 2 data for this drug was quite strong with very high statistical significance achieved.
Join over 500 members in our unique biotech community, ROTY (Runners of the Year), and find high % gainers in the sector while forming good habits to encourage long term success.
Receive 2+ exclusive articles per month on setups/stocks that meet my criteria (near- to medium-term upside, several factors in our favor, etc.).
Get access to regular editions of ROTY (includes updates for stocks in our market-beating 10 stock model account, actionable trades, time-saving features such as Cheat Sheet & Much More!).
Gain access to one of the best Biotech Chat Rooms out there, full of experienced traders, investors & industry veterans. See reviews.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
GLTA and hopefully they can buy CYDY
HCIT
