Biotech Stock Roundup: Gilead's Sovaldi Shines, Biogen & Alexion Up Outlook - Analyst Blog

Last week, several major biotech companies -- Celgene CELG, Gilead GILD, Amgen AMGN, Biogen BIIB and Alexion ALXN -- reported first quarter results.

The clear winner was Gilead with its hepatitis C virus (HCV) treatment, Sovaldi bringing in sales of $2.3 billion in its first full quarter on the market. Although a lot has been said about the drug's high price, the sales figures show the high acceptance level thanks to its strong efficacy profile. Earnings were way above expectations. The only disappointing part was the company not raising its guidance or providing specific guidance for Sovaldi sales.

Biogen also came out with impressive sales on its oral multiple sclerosis drug, Tecfidera, and raised its guidance for 2014. Alexion topped expectations thanks to Soliris and upped its earnings guidance for 2014.

Meanwhile, Celgene's earnings were slightly better-than-expected but revenues fell short of expectations. The company maintained its guidance and announced an acquisition deal which will add a late-stage Crohn's disease experimental drug to its portfolio.

Amgen's first quarter results were disappointing with the company reporting a decline in earnings. Although revenues increased from the year-ago period, they were well short of expectations. Revenues also fell on a sequential basis with most products recording a sequential decline.

Cytokinetics CYTK Sinks on Disappointing Data: Cytokinetics shares were severely punished with the company reporting disappointing data on one of its lead pipeline candidates, tirasemtiv. Tirasemtiv failed to achieve the primary endpoint in a mid-stage study for amyotrophic lateral sclerosis, often referred to as Lou Gehrig's disease. Moreover, results were mixed where secondary endpoints were concerned. Investors expressed their disappointment sending the shares down 64.7%.

With tirasemtiv failing in the phase IIb BENEFIT-ALS study, the road ahead looks difficult and we expect investor focus to shift to the company's other lead pipeline candidate -- omecamtiv mecarbil for acute heart failure.

But here, too, the company has faced some disappointment as last September, Cytokinetics and partner Amgen had reported that omecamtiv failed to achieve the primary endpoint in a mid-stage study. However, omecamtiv is currently in other studies and positive results from these would provide a ray of hope to investors.

Hyperion Boosts Orphan Drug Pipeline: Hyperion, a company that specializes in orphan drug diseases, is looking to boost its orphan drug portfolio by acquiring Israel-based Andromeda Biotech Ltd. The lead candidate, DiaPep277, is in late-stage development for new onset type I diabetes, an orphan indication diagnosed in about 35,000 adults every year across the U.S. and Europe. The acquisition could see Hyperion paying up to $570.35 million in cash and stock apart from royalties.

Spectrum Set to File NDA: Spectrum looks set to file for FDA approval of its Captisol-enabled melphalan which met the primary endpoint in a pivotal phase II study conducted in the multiple myeloma transplant setting. Shares were up 4% on the news. Approval could lead to the product launch next year.

Sarepta SRPT Soars on Regulatory Update: Sarepta's shares soared 39.3% on news that the company will file for accelerated approval of eteplirsen, for Duchenne muscular dystrophy DMD, by year end. This is good news for the company which had earlier been informed by the FDA (in Nov 2013) that its NDA filing for eteplirsen would be premature.

Of course, conditions for a filing this year exist -- Sarepta will have to conduct additional studies on the drug and gather more data. DMD is a devastating and incurable muscle-wasting disease that affects about one in every 3,500 boys born worldwide.
 

The Week So Far:

OncoGenex Slumps on Late-Stage Data: OncoGenex saw its shares losing more than half their value (down 60.3%) on news that the company's experimental prostate cancer drug, custirsen, failed to meet the primary endpoint in a late-stage study.

Auxilium AUXL Cuts Guidance: Less than a week before reporting first quarter results, Auxilium announced a guidance cut mainly due to lower-than-expected Testim revenues. The company cut its revenue guidance for 2014 by $70 million and now expects to break-even or report a loss of up to $15 million this year instead of reporting net income of $45 million - $50 million.

Testim revenues are expected to decline to $11 million to 13 million in the first quarter from $45.5 million in the year-ago period. Full year Testim sales are expected to be less than $85 million due to several factors like a shrinking testosterone replacement therapy TRT gel market, lower Testim market share, downward pressure on TRT gel scrips due to concerns regarding safety, inventory destocking, and higher rebates.

Although Auxilium has been working on diversifying its revenue base, Testim sales came in at $211.2 million in 2013, accounting for 52.7% of the company's revenues in 2013.

EU Approves BioMarin's Vimizim:  Vimizim gained EU approval for Morquio A syndrome that is estimated to affect 3,000 people in the developed world.

Amicus Up on Fabry Disease Data: Amicus' experimental Fabry disease drug was found to be effective in a late-stage study. Shares were up 20.7% on the news.

Athersys Plunges on Disappointing Data: Athersys' shares plunged 51.3% on disappointing interim data from mid-stage study on the administration of its MultiStem cell therapy for the treatment of refractory ulcerative colitis (UC).

Later this week, companies like Vertex VRTX and BioMarin will be reporting results. The FDA will also issue a response regarding The Medicines Co.'s MDCO antiplatelet agent, Cangrelor.

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