Investors warmed to biopharma company equities, particularly in the final quarter of the year, with the BioWorld Biopharmaceutical Index increasing 23% in value during this period, helping the group climb to a respectable 14% for the year after being underwater from April through to September. The general markets also closed on a great year, with the Dow Jones Industrial Average and the Nasdaq Composite index recording increases of 20% and 31%, respectively. Both bellwether indices achieved major milestones, with the Dow breaking through the 28,000 threshold and the Nasdaq hitting the 9,000 level.
BioWorld conducted an analysis of 318 public companies whose shares were trading above $2 at the beginning of 2019, and found the group recorded an impressive average 42% gain in valuation for the year. The dramatic swing in sentiment late in the year certainly helped improve stock prices significantly, with 51% of the public biopharmas companies registering an increase in their share price. Biopharma’s impressive overall gains, despite the mixed year for the sector, saw 57 companies recording a doubling or greater of their share prices.
It was a lights out performance by Axsome Therapeutics Inc. that ensured its top spot among the best-performing stocks in 2019, with a share value (NASDAQ:AXSM) skyrocketing 3,565%. (See Biopharma stock performance in 2019, below.)
The New York-based biopharmaceutical company, which is focused on developing therapies for the management of pain and other central nervous system disorders, has enjoyed its meteoric rise on the back of favorable clinical data throughout the year. One example is its product AXS-07 for the acute treatment of migraine. The compound employs Axsome's molecular solubility enhanced inclusion complex, or MoSEIC, platform to pair meloxicam and rizatriptan. It is thought to act by inhibiting CGRP release, reversing CGRP-mediated vasodilation, and inhibiting neuro-inflammation, pain signal transmission and central sensitization. AXS-07 met the two regulatory co-primary endpoints and significantly improved migraine pain and most bothersome symptoms as compared to placebo in the Momentum phase III trial. It also met the key secondary endpoint, demonstrating statistically significant superiority to the active comparator rizatriptan on sustained freedom from migraine pain.
Earlier in December, the company announced it was planning to seek approval during the second half of this year for its dextromethorphan/bupropion modulated delivery tablet, AXS-05, an oral NMDA receptor antagonist to treat major depressive disorder (MDD) after the compound met the primary endpoint, rapidly and significantly improving symptoms of MDD in the Gemini phase III trial, a randomized, double-blind, placebo-controlled, multicenter experiment in the U.S. that enrolled 327 adult patients with confirmed moderate to severe MDD.
Also, in December the company was able to confidently conduct an underwritten public offering of 2.3 million shares that generated $200.1 million.
Second-ranked share mover, Constellation Pharmaceuticals Inc., of Cambridge, Mass., which is levering epigenetics to discover and develop therapeutics, closed an underwritten public offering for total gross proceeds of $257.9 million. The company’s shares (NASDAQ:CNST) jumped a whopping 1,074% in 2019. The increase was supported by preliminary data from the Manifest clinical trial presented at the annual meeting of the American Society of Hematology. The open-label phase II trial is testing the company’s bromodomain and extra-terminal domain protein inhibitor, CPI-0610, in patients with myelofibrosis (MF). Arm 3 is evaluating CPI-0610 in combination with ruxolitinib in JAK-inhibitor-naïve MF patients. Arms 1 and 2 are studying CPI-0610 as a monotherapy or in combination with ruxolitinib in ruxolitinib-resistant or -intolerant MF patients. In combination with Jakafi (ruxolitinib, Incyte Corp.) in JAK inhibitor-naïve patients, 12 of 15 in the first-line treatment arm achieved at least a 35% spleen volume response at 12 weeks.
H.C. Wainwright analyst Andrew Fein liked the presentations, noting that “Constellation's ASH abstracts lend strong support to our bullish view on CPI-0610’s potential in MF. We think the data is as good as it gets at this stage.”
Palo Alto, Calif.-based Kodiak Sciences Inc. also returned an impressive 913% boost to its share value (NASDAQ:KOD). Toward the end of the year the company presented promising safety, efficacy and durability data from a clinical study of its anti-VEGF antibody biopolymer conjugate, KSI-301, in retinal diseases, stating that “it showed for the first time it is possible for many patients to go for as long as four to six months before retreatment with an intravitreally injected biologic."
The company also started enrollment in DAZZLE, a pivotal study of KSI-301 in patients with treatment-naïve wet age-related macular degeneration.
Unfortunately, not all clinical trials turn out to be successful and, when they are not, public companies see their shares hit hard. Many of the companies in the “Bottom Performers” table suffered this fate. For example, in September, shares of San Diego-based Tocagen Inc. (NASDAQ:TOCA) fell 77.7% to 93 cents, and further since, after its two-part immunotherapy for people with recurrent brain cancer failed to surpass standard of care on overall survival (OS), the primary endpoint of the company's phase III Toca 5 trial. Secondary endpoints in the registrational study were also missed, showing no meaningful difference between study arms.
Shares of Jerusalem-based Intec Pharma Ltd. (NASDAQ:NTEC) plunged 81.6% in July on the disappointing outcome of the phase III study called Accordance testing its Accordion Pill (AP, carbidopa/levodopa [CD/LD]) against immediate-release CD/LD in Parkinson's disease.
Although not included in BioWorld’s performance analysis of public biopharma companies, a separate study of the IPOs completed on U.S. exchanges this year showed a mixed performance since their initial listing. (See Biopharma IPO performance 2019, below.)
Taking top honors was Boston-based Karuna Therapeutics Inc., with a 371% increase in stock price since its June debut on U.S. markets. The stock took off in November following positive top-line phase II data of Karxt in acute psychosis in patients with schizophrenia, providing a potential read-through to larger indications such as Alzheimer’s disease and pain.
On the other side of the coin, Cambridge, Mass.-based Anchiano Therapeutics Inc., which raised $30.5 million in its IPO in February, offering 2.65 million American depositary shares at $11.50, has seen its stock (NASDAQ:ANCN) fall steadily over the past nine months by 88%.
In its third quarter, the company discontinued its phase II Codex study of gene therapy inodiftagene vixteplasmid for patients with BCG-unresponsive non-muscle-invasive bladder cancer due to the unlikelihood of reaching the futility threshold of 10 complete responses in 35 patients. It also entered a licensing agreement with ADT Pharmaceuticals LLC to develop small-molecule pan-RAS inhibitors and PDE10/β-catenin inhibitors to treat genetically defined cancers.
Editor's note: Next week, we will be providing an in-depth analysis on the capital raised and deals completed during 2019 and looking ahead at the industry's prospects for the next 12 months.