It has proved to be a lackluster summer for the biopharmaceutical sector, with the BioWorld Biopharmaceutical index dropping about 2% in value during the past two months, in contrast to the general markets that have enjoyed a much stronger period, with the Dow Jones Industrial Average (DJIA) increasing almost 8% – a performance that has moved the index close to positive territory for the first time this year. (See BioWorld Biopharmaceutical index, below.)

Changing places

Two index members traded places on the bellwether Dow Jones Industry Average Aug. 31. New York-based Pfizer Inc., which was added to the DJIA in late 2004, was removed and replaced by Thousand Oaks, Calif.-based Amgen Inc. The leading biopharmaceutical company was joined by Salesforce.com (NYSE:CRM), which has replaced Exxon Mobil Corp., and Honeywell International Inc., which replaced Raytheon Technologies Corp. on the 30-member index.

According to S&P, the moves were made in order to offset the index's reduction in weight in the Global Industry Classification Standard Information Technology sector following Apple Inc.'s decision to split its stock 4-to-1. The adjustments, S&P said, also help diversify the index by removing overlap between companies of similar scope and add new types of businesses that better reflect the American economy. Prior to the changes, big pharma was represented on the index by both Merck & Co. Inc. and Pfizer. The addition of Amgen to the Dow acknowledges the importance of the biopharmaceutical sector, which has now grown to an over $1 trillion market cap industry, with Amgen’s current market cap valuation at $148 billion.

Amgen, in fact, was among just a handful of index members that closed August with a gain in its share price (NASDAQ:AMGN), up 3.5% at $253.32. It did have some positive news for investors to digest, including the FDA approving the expansion of the Kyprolis (carfilzomib) U.S. prescribing information to include its use in combination with Darzalex (daratumumab) plus dexamethasone in weekly and twice-weekly dosing regimens for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three previous lines of therapy.

In addition, it announced positive data from the Hauser-RCT phase IIIb study evaluating the safety and efficacy of Repatha (evolocumab) in pediatric patients, ages 10 to 17, with heterozygous familial hypercholesterolemia (HeFH). The study showed that Repatha, in combination with statins and other lipid-lowering therapies, significantly reduced low-density lipoprotein cholesterol (LDL-C) compared to placebo.

Results from the 24-week study show that in pediatric patients with HeFH, monthly treatment with Repatha reduced LDL-C by a mean 38.3% from baseline compared to placebo, and absolute reduction in LDL-C was 68.6 mg/dL (mean absolute reduction), meeting the primary endpoint and showing superiority of evolocumab administered on top of statins.

Setback for gene therapy

Weighing on the Biopharmaceutical index value was the 35% dive in Biomarin Pharmaceutical Inc.’s shares (NASDAQ:BMRN) after it received a complete response letter (CRL) for its potential blockbuster, Roctavian (valoctocogene roxaparvovec; Valrox) gene therapy for severe hemophilia A.

According to Biomarin, the decision came as a surprise as the one-and-done therapy appeared to be poised to reshape the treatment landscape for hemophilia A after the FDA had accepted for priority review the BLA for its investigational AAV5 gene therapy. The company said it had an agreement with the FDA on the extent of the data needed to support the BLA but said the FDA added a new recommendation for two years of data from the company's ongoing phase III study to provide “substantial evidence of a durable effect” using an annualized bleeding rate as the primary endpoint.

The CRL recommended completing the phase III and then submitting a two-year follow-up safety and efficacy data report on all participants. Now an approval and launch have likely been pushed back roughly two years.

In anticipation of an approval, the San Rafael, Calif.-based company reported earlier this year that it had constructed, commissioned and validated a gene therapy manufacturing facility located in Novato, Calif., that will produce the therapy.

In a presentation at the annual J.P. Morgan Healthcare Conference in January, Biomarin Chairman and CEO Jean-Jacques Bienaime revealed the company was ramping up productivity at the plant, more than doubling its capacity to 10,000 doses annually.

Commenting on the CRL, Canaccord Genuity analyst Michele Gilson wrote in a note to investors that, "while a delayed launch could allow competitors to enroll their pivotal studies and progress their programs, weakening Roctavian's lead, these competitors have still been stalled by COVID-19 and will have less data accrued and shorter follow-up than Roctavian. Given the nearest competitors have not differentiated themselves at this point in time as significantly better than Roctavian, the lead should still be relevant. Meanwhile, Roctavian's more robust data package with longer-term phase I/II data and additional phase III data by launch may increase demand for those who would not typically be the earliest adopter population."

Momentum

Dublin-based Jazz Pharmaceuticals plc was able to carry the momentum of its July FDA approval of Xywav (calcium, magnesium, potassium and sodium oxybate), a GABA B receptor agonist, for cataplexy and excessive daytime sleepiness in narcolepsy patients ages 7 and older, into August, with its shares (NASDAQ:JAZZ) closing the month up 24%.

It is the first approved new treatment option for the indications in more than 15 years, and the company plans Xywav’s launch by year-end. In the meantime, Jazz will implement a risk evaluation and mitigation strategy for the treatment.

The company followed up the approval news with strong second-quarter financial results. It reported total revenue of $562.4 million, up 5% from the same period for 2019. Despite the impact from the pandemic, Jazz increased its full-year 2020 total revenue guidance to a range of $2.225 billion to $2.325 billion and said it is on track to execute five drug launches through 2020 and 2021, including Xywav and Zepzelca (lurbinectedin), cleared by the FDA in mid-June to treat relapsed metastatic small-cell lung cancer.

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