BPC December 21 update

Merus (MRUS) secures deal with Incyte – shares surge 43%

Price and Volume Movers

Good news on the biotech partnership front continued on Wednesday as Merus NV (NASDAQ:MRUS) secured a license agreement with Incyte Corporation, while Calithera Biosciences Inc (NASDAQ:CALA) announced a collaboration with Bristol-Myers.

Merus shares surged 43% to $20.22 on 345x average volume following news of its collaboration with Incyte Corporation (NASDAQ:INCY). Merus will receive an upfront payment of $120m from Incyte. In addition, Incyte has agreed to purchase 3.2m shares of Merus for $80m. The company will also be eligible to receive milestone payments of up to $350 million per program, which could result in an aggregate milestone opportunity of approximately $2.8 billion if everything goes well.

Merus will retain all rights to develop and commercialize approved products in the United States, and Incyte will develop and commercialize approved products arising from the program outside the United States. It will retain rights to its two clinical candidates. Interim data from its Phase 1/2 clinical trial of MCLA-128 in breast cancer are due in 1Q 2017.

Calithera Biosciences, Inc. (Nasdaq:CALA) shares also rose on the back of its announcement of its clinical trial collaboration of evaluate Bristol-Myers Squibb’s Opdivo in combination with Calithera’s CB-839 in patients with clear cell renal cell carcinoma (ccRCC). Shares of Calithera closed up 20% to $3.65 on 29x average volume.

Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) dropped 18% to $4.38 on 4x average volume following news it has decided to stop the Phase 2 HERMIONE study of MM-302 in HER2-positive metastatic breast cancer patients due to insufficient efficacy. Merrimack now expects to provide further details about MM-302, as well as the results of its full pipeline review, in January 2017.

Advanced Accelerator Applications S.A. (NASDAQ:AAAP) announced that it was issued a Complete Response Letter (CRL) regarding the New Drug Application (NDA) for Lutathera for the treatment of gastroenteropancreatic neuroendocrine tumors (GEP-NETs) in adults. The company noted that the CRL refers to;

“issues with the format, traceability, uniformity, and completeness relating to the NETTER-1 and Erasmus clinical datasets, which are precluding FDA reviewers from performing the required independent analysis of these clinical studies. In addition, the CRL requests subgroup analyses for gender, age and racial subgroups, as well as other stratification factors and important disease characteristics. A safety update on clinical and non-clinical studies, which is already in process, was also requested in the CRL. Finally, the CRL noted that any observations made during inspections of manufacturing facilities supporting the NDA need to be resolved prior to approval of the NDA. No additional clinical studies were requested in the CRL and there were no comments at this time on other sections of the NDA submission.”

Shares of the company dropped 6% to $24.68 on 2x average volume.


Other major price movers (10%+):

ADVANCERS:                                                                     

Lpath Inc (NASDAQ:LPTN): $3.65; +64%; 4x average volume.

Imprimis Pharmaceuticals Inc (NASDAQ:IMMY): $2.01; +21%; 4x average volume.

Heat Biologics Inc (NASDAQ:HTBX): $$1.01; +32%; 1.5x average volume.

DECLINERS:

ContraVir Pharmaceuticals Inc (NASDAQ:CTRV): $1.35; -20%; 2.5x average volume.

Cerecor Inc (NASDAQ:CERC): $0.94; -13%; 1.5x average volume.

GTx, Inc. (NASDAQ:GTXI): $5.68; -12%; 1.5x average volume.

RedHill Biopharma Ltd – ADR (NASDAQ:RDHL): $9.69; -10%; 12x average volume.


Full pipeline updates below:

Pipeline Database Updates

Drug Stage Catalyst

MACK
MM-302 HERMIONE
Cancer - HER2-positive locally advanced or metastatic breast cancer

Phase 2 Phase 2 trial discontinued December 21, 2016 due to poor efficacy.

AAAP
Lutathera
Inoperable progressive midgut NETs

CRL PDUFA date under priority review was December 28, 2016. CRL issued December 21, 2016.

ATRS
VIBEX QuickShot
Testosterone deficiency

NDA Filing NDA submission announced December 21, 2016.

LXRX
Sotagliflozin
Type 1 Diabetes

Phase 3 Phase 3 data released September 9, 2016 met primary endpoint. Data from second trial released December 21, 2016 - primary endpoint met.

CNCE
CTP-656
Cystic fibrosis

Phase 2 Phase 2 trial initiation announced December 21, 2016. Data due by end of 2017.

AZRX
MS1819-SD
Exocrine pancreatic insufficiency (EPI) caused by chronic pancreatitis (CP)

Phase 2 Announced December 21, 2016 that Phase 2 enrollment has commenced. Initial data due 1H 2017.