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Neurocrine target upped after positive prelims

Neurocrine price target raised to $95 from $85 at Oppenheimer. Oppenheimer analyst Jay Olson raised his price target for Neurocrine to $95 from $85 based on preliminary Q4 results increasing his revenue and earnings estimates. The analyst reiterates an Outperform rating on the shares.


Unitedhealth eyes premium cuts with tax reform

Says expects to invest $200M-$300M from tax cuts into the business. Sees $400M-$500M reduction in premiums from tax cut. Comments from Q4 earnings conference call.

Tesaro setback a plus for Heron: Cowen

Tesaro Varubi setback an incremental positive for Heron, says Cowen. Cowen analyst Boris Peaker said the setback for Tesaro’s (TSRO) Varubi regarding its label change is an incremental positive for Heron Therapeutics’ (HRTX) Cinvanti. The analyst noted Heron launched Cinvanti for a similar indication but without anaphylaxis risk in the label. Peaker reiterated his Outperform rating and $40 price target on Heron Therapeutics shares.

Imprimis warned by FDA on misleading claims

The FDA posted online a warning letter sent to Imprimis Pharmaceuticals on December 21, 2017. The FDA wrote, “Your firm’s website and twitter account make false or misleading claims regarding “Simple Drops” and “Klarity C-Drops” – specifically, they represent that these products are made with FDA approved components or are FDA-approved, when that is not the case.”

National Heath Trends guides below year-ago 1Q with prelim results

Natural Health Trends President Chris Sharng stated, “As discussed in the prior quarter, 1Q17 presented a challenging year-over-year comparison as our re-branded Ambassador Academy, which is traditionally held in January of each year, was held in March. In addition, we experienced a slight seasonal decline due to the Chinese New Year which was in-line with historical trends. Partially offsetting these factors was heightened activity in March following our successful Ambassador Academy in Macau which attracted over 6,000 members and guests as well as a productive three week product roadshow for Premium Noni Juice. We were thrilled to introduce various new products at the March event as well as to announce exciting incentive programs for the year.” The company estimates deferred revenue at March 31 was $4.3M vs. $4.9M at December 31, 2016. At March 31, 2016, deferred revenue was $6.5M vs. $4.0M at December 31, 2015.

5 biotechs that could be bought out this year

Biotechnology merger and acquisition activity could get a booster shot now that U.S. tax reform is cutting corporate tax rates and allowing companies to repatriate cash that’s been piling up overseas. We’ll have to wait and see if tax reform sparks biotech M&A in 2018, but if it does, then I think suitors could come knocking at Portola Pharmaceuticals(NASDAQ: PTLA)Tesaro Inc. (NASDAQ: TSRO)bluebird bio (NASDAQ: BLUE)Esperion Therapeutics (NASDAQ: ESPR), and GlycoMimetics (NASDAQ: GLYC).

Cashing in on coagulation

Seniors are at risk of developing blood clots after hospitalization, and preventing rehospitalization because of clots is a multibillion-dollar opportunity for Portola Pharmaceuticals.

Portola Pharmaceuticals won FDA approval of Bevyxxa in 2017, and commercial sales should commence soon. In clinical trials, Bevyxxa, a factor Xa anticoagulant, beat Lovenox, so it has a good shot at replacing it as a way to prevent venous thromboembolism in acute, medically ill patients. If sales of Bevyxxa are strong out of the gate, then it could make Portola Pharmaceuticals an attractive takeover target, because Lovenox was hauling in $3 billion annually before its patent expired.

An acquirer might also emerge if the FDA OK’s Portola Pharmaceuticals’ AndexXa this year. AndexXa has a shot at becoming the first FDA-approved drug specifically designed to reverse the anticoagulation effect of factor Xa drugs, including Bevyxxa, Johnson & Johnson‘s (NYSE: JNJ) Xarelto, and Bristol-Myers Squibb and Pfizer‘s (NYSE: PFE)Eliquis.

Xarelto and Eliquis have already become multibillion-dollar drugs by displacing warfarin’s use in patients with atrial fibrillation or following hip or knee surgery. If AndexXa is approved, these drugs could become even more widely used because they’re not as often prescribed in elderly patients at risk of bleeding events or surgery.

Bristol-Myers Squibb and Pfizer have already licensed AndexXa in Japan, so it’s conceivable they might be interested in owning Portola Pharmaceuticals lock, stock, and barrel. Of course, that could depend on how smoothly Bevyxxa’s launch goes and if AndexXa gets a green light.

Profiting from PARP

Tesaro’s markets Varubi, a medicine used to prevent nausea in chemotherapy patients, and Zejula, an ovarian-cancer drug, and sales could climb significantly this year and attract the attention of a bigger company.

The recent FDA approval of an IV formulation of Varubi gives Tesaro an opportunity to win market share from Merck & Co.‘s (NYSE: MRK) Emend, a competing antinausea drug with $550 million in annualized sales.

Zejula’s market opportunity could be even bigger, though. In less than a year, it’s already become the most widely prescribed PARP inhibitor used to prevent cancer cells from using the PARP enzyme to repair themselves. As a result, Tesaro expects to report sales of between $40 million and $50 million for Q4 2017. However, that could only be scratching the surface. Use in the post-treatment maintenance setting is increasing, and studies could expand its use into early-line ovarian cancer and non-small-cell lung cancer treatment. Those markets are worth about $8 billion.

Tesaro also has three monoclonal antibodies in trials targeting various tumor types. One of those drugs is TSR-042, a PD-1 drug that’s being evaluated as a treatment for MSI-H positive tumors that occur in about 20,000 people per year.

Admittedly, Tesaro isn’t the only PARP player, but Zejula’s success so far and the potential for its use in many more people could be enough of an incentive for an acquirer to step up.

A massive advance in multiple myeloma

The multiple myeloma market is worth billions of dollars in sales annually, and bluebird bio’s chimeric antigen receptor T-cell therapy, bb2121, is delivering data that suggests it could reshape the indication someday.

In early-stage trials, bb2121 delivered a 94% objective response rate and 56% complete response rate in 21 patients who had previously received a median seven treatments. If those results are duplicated in an ongoing pivotal trial, then an approval for its use in the fourth-line setting could come as soon as 2019.

If bb2121 wins approval, then it has a very good shot at becoming a blockbuster because it’s licensed to Celgene, the market-share leader in first-, second-, and third-line multiple myeloma treatment. Its long-standing dominance in the indication should make marketing bb2121 easy. Assuming everything goes OK, bluebird bio will split U.S. profit on bb2121 with Celgene, and it will collect milestones and royalties on ex-U.S. sales.

An acquirer could find that co-commercialization opportunity in the U.S. very attractive, especially since acquiring bluebird bio would also net a buyer two other gene therapies that are approaching the finish line. LentiGlobin, a beta-thalassemia treatment, and Lenti-D, a treatment for cerebral adrenoleukodystrophy, could be filed for FDA approval in the coming year or so. A trial evaluating LentiGlobin in sickle-cell disease could make bluebird bio even more enticing.

It’s anyone’s guess who might step up to buy it, but I could argue the deal makes sense for any company that currently markets multiple myeloma drugs, including Celgene, J&J, Merck & Co., Amgen (NASDAQ: AMGN), and Bristol-Myers Squibb.

Crushing cholesterol

Before losing patent protection, cholesterol-busting drug Lipitor was the world’s best-selling drug, with $13 billion in annual sales. Today, generic Lipitor remains one of the most prescribed medicines on the planet. However, millions of patients still fail to hit their cholesterol-lowering target.

In a bid to change that, Esperion Therapeutics is developing bempedoic acid, a clinical-stage cholesterol drug that can be used alongside Lipitor. In phase 2 trials, combining bempedoic acid and Lipitor reduced bad cholesterol by an additional 20%. Results from phase 3 trials are expected this year, and if they’re good, then an FDA application could be filed soon thereafter.

A study that’s evaluating bempedoic acid alongside Zetia, another common cholesterol drug, reduced bad cholesterol by 48%, too. Phase 3 results for that combination are on deck this year as well, so a win for that combination could make Esperion Therapeutics an even better company to buy.

Management estimates that up to 12 million people in the U.S. alone could benefit from new cholesterol-lowering options like bempedoic acid, so clearly, the market opportunity here is big.

In my opinion, at least three companies could be intrigued enough to buy Esperion Therapeutics: Pfizer, Regeneron (NASDAQ: REGN), and Amgen. Pfizer commercialized Lipitor, and it’s familiar with Esperion’s management because Esperion Therapeutics’ founder, Roger Newton, spearheaded Lipitor’s development. Regeneron and Amgen could also be interested because each of them already markets another class of cholesterol-lowering drug called a PCSK9 inhibitor. Because they’ve already invested a lot of money building out their PCSK9 sales teams, bolting on bempedoic acid could make sense.

A long-shot pick

Chemotherapy remains a backbone in treating acute myeloid leukemia, and recently, GlycoMimetics reported mid-stage trial results suggesting its GMI-1271 can help chemotherapy work better.

In heavily pre-treated AML patients, adding GMI-1271 to MEC chemotherapy generated a 43% clinical remission rate and median overall survival of 9.4 months. Comparatively, in a historical, matched control group of patients receiving the chemotherapy cocktail MEC, overall survival was only 5.4 months.

GMI-1271 also showed intriguing efficacy in older, newly diagnosed AML patients. In trials, adding GMI-1271 to 7+3 chemotherapy resulted in a 68% response rate and overall survival of 15.8 months. For comparison, the overall survival of a matched control group was 12 months for 7+3 on its own.

What could make GMI-1271 more intriguing, though, is it may make it easier for patients to tolerate chemotherapy. Usually, adding drugs to chemotherapy increases toxicity, but that doesn’t appear the case for GMI-1271. There weren’t any obvious signs of incremental toxicity in its trials, and there was a lower-than-expected rate of grade 3-4 mucositis in MEC chemotherapy patients. Historically, severe mucositis occurs in 20% to 25% of MEC patients, but it happened in only about 4% of patients receiving MEC and GMI-1271.

Phase 3 studies are planned to begin next year, and there’s no telling how those trials will read out. Nevertheless, GM-1271 could be intriguing to a cancer company already marketing AML drugs. One possibility is Jazz Therapeutics (NASDAQ: JAZZ). In 2017, Jazz Pharmaceuticals paid $1.5 billion to acquire Celator so that it could land Vyxeos, an optimized combination of the two chemotherapies that comprise the 7+3 therapy that’s used in relapsing AML.

One more thing to consider

There’s no way of knowing if these companies are on anyone’s radar, so investing in them because of their acquisition potential isn’t wise. Fortunately, all five of these names have a shot at success as a standalone company, and that makes them intriguing buys regardless of whether an acquirer materializes. Obviously, anything can (and often does!) happen in biotech, so remember, these stocks are risky.

Eiger hypertension med fails in Phase 2 of trial

Eiger BioPharmaceuticals Inc. EIGR, -47.41% shares dropped more than 40% in premarket trade Tuesday after the company said its pulmonary arterial hypertension drug failed to meet a primary and secondary endpoint both overall and in key subgroups. The company will stop developing the therapy, ubenimex, in pulmonary arterial hypertension based on the phase 2 trial results, but will continue to develop it in lymphedema, or swelling in the arms or legs. Pulmonary arterial hypertension is a life-threatening condition characterized by high blood pressure in the heart and lungs. Eiger President David Cory said that the results were disappointing but that the company “has a deep pipeline of products focused on rare diseases that was built to reduce risk against a single binary event,” with other clinical trial results expected in the second half of the year. Eiger shares have surged 35% over the last three months to $16.00, compared with a nearly 9% rise in the S&P 500 SPX, +0.61% and a 12.4% rise in the Dow Jones Industrial AverageDJIA, +0.98%