No one will be sad to see the back of a horrendous year, with the raging pandemic bringing the world to its knees, pushing global health care systems to their very limits and stalling economies. However, the potential end to this dire situation is now tantalizingly in sight with COVID-19 vaccines poised to quickly roll out during the next few months.
The collective sigh of relief was certainly demonstrated by investors, with the Dow Jones Industrial Average breaking the 30,000 mark for the first time in its history in November and pushing almost 12% higher by the close of the month. Blue chip biopharmaceutical companies also saw their share prices rally in the period after coming off a very turbulent October.
According to Cowen & Co. analysts, “the sector had its strongest rally since the Spring and the biotech indices kept pace with the broader markets. In fact, optimism for the COVID vaccines, fruits of the biopharma industry, played a major part in driving the markets higher.”
The BioWorld Biopharmaceutical index closed November up 2.5% and is tracking up 6% for the year. (See chart, below.)
Cowen analysts also attributed the rally to what they believe will be a relatively benign political environment going forward. “A divided federal government appears likely, so radical changes in the way that biopharmaceuticals are priced or reimbursed seem unlikely for the next couple of years,” they noted.
North Chicago-based Abbvie Inc. was among the leading gainers in the group with its shares (NADAQ:ABBV) growing 23%. The company has also continued to perform well in the first week of this month on the strength of a major partnership and the release of clinical trial results at the 62nd American Society of Hematology (ASH) annual meeting.
The company took a step into the world of precision medicines signing a global strategic collaboration with Frontier Medicines Corp. that will aim to discover, develop and commercialize a pipeline of innovative small-molecule therapeutics against high-interest, difficult-to-drug protein targets.
Under the multiyear collaboration, the companies will utilize Frontier's chemoproteomics platform to identify small molecules for programs directed to novel E3 ligases and certain oncology and immunology targets.
As part of the agreement, Abbvie will pay Frontier an up-front cash payment of $55 million, and it will be eligible to receive additional milestone payments going forward that could potentially be in the region of $1 billion. When defined stages of preclinical development are completed, Abbvie will assume full responsibility for global development and commercialization activities and costs for the programs. Frontier will retain an option to share development activities and expenses for certain oncology programs through the completion of phase II studies.
Shares of Novartis AG (NYSE:NVS) also gained 16% in November fueled by a significant exclusive global licensing deal inked with Australian biotech company Mesoblast Ltd. for the development, manufacture and commercialization of the company’s mesenchymal stromal cell (MSC) product, remestemcel-L, with an initial focus on acute respiratory distress syndrome (ARDS), including that associated with COVID-19.
The pharma company is paying Melbourne-based Mesoblast $50 million up front ($25 million in cash and a $25 million equity investment) with the potential for $505 million pre-commercialization milestones for ARDS indications and an additional $750 million post-commercialization via sales milestones and tiered double-digit royalties.
In October, Vertex Pharmaceuticals Inc.’s shares (NASDAQ:VRTX) closed down by more than 23%, mainly on a disappointing clinical trial outcome. The Boston-based company reported that, based on the safety and pharmacokinetic (PK) profile of VX-814 observed in a phase II trial in alpha-1 antitrypsin deficiency (AATD), it decided to discontinue the product’s development. Notably, elevated liver enzymes (AST/ALT) were observed in several patients. In four patients, across different doses studied, elevations greater than eight times the upper limit of normal were recorded.
The company’s shares did get back almost 10% of the loss in November. Cowen analyst Phil Nadeau is bullish on the company’s prospects, writing in a note that fears about the company's long-term growth prospects “are overblown,” and he believes “the CF franchise appears capable of driving a double-digit revenue growth CAGR through 2025.”
In the period, Vertex reported that the European Commission had granted approval of the label extension for Symkevi (tezacaftor/ivacaftor) with Kalydeco (ivacaftor), to include the treatment of cystic fibrosis (CF) in patients ages 6 and older who have two copies of the F508del mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene or one copy of the F508del mutation and one copy of one of 14 mutations in the CFTR gene that result in residual CFTR activity.
By the numbers
Overall, 82% of the index group members recorded a positive gain in their share values. Amgen Inc., of Thousand Oaks, Calif., the leading biopharma company by market cap, recorded a 2.4% gain. During the month, it reported that it had elected to terminate a collaboration and option agreement with Cytokinetics Inc., of South San Francisco, as of May 20, 2021. Amgen said it will transition development and commercialization rights for omecamtiv mecarbil and AMG-594 to Cytokinetics. Omecamtiv mecarbil is an investigational cardiac myosin activator in development for the potential treatment of heart failure with reduced ejection fraction (HFrEF), and was recently studied in Galactic-HF, a positive phase III cardiovascular outcomes trial. AMG-594, a novel mechanism cardiac troponin activator, is in phase I development for HFrEF and other types of heart failure.
Shares of Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY) closed November up about 6%. In the period, just four days after it received European approval, the FDA gave its green light for Oxlumo (lumasiran), the first treatment for primary hyperoxaluria type 1, an ultra-rare genetic disorder that contributes to kidney stones and deposits.
That was the third FDA approval for the company in successive years. In November last year, the FDA approved Givlaari (givosiran) for acute hepatic porphyria and, in August 2018, the agency approved Onpattro (patisiran) to treat hereditary transthyretin-mediated amyloidosis.
It appears that the company is on a roll. Wainwright analyst Patrick Trucchio agreed, writing in a note that “by 2025, Alnylam could have eight or more approved products on the market and 10 or more late-stage clinical development programs in four or more therapeutic areas.”