Key events in the biotech sector last week included encouraging data from Isis Pharmaceuticals (ISIS) and disappointing late-stage data from Onconova Therapeutics (ONTX). The week, however, ended on a positive note with Vertex Pharma (VRTX) gaining FDA approval for another indication for its cystic fibrosis (CF) drug, Kalydeco.

Isis Soars on Mid-Stage Data: Isis’ record of delivering encouraging data on pipeline candidates continues with the company presenting positive top-line results on its spinal muscular atrophy (SMA) candidate, ISIS-SMNRx. The study, conducted in children with SMA, showed that the 9 mg dosage led to an average increase of 3.7 points in muscle function score. An increase in SMN protein was also observed.

That’s not all – the company also presented interim data from a study in infants. All four infants in the 6 mg cohort remained in the study for more than six months and are now about nine and a half to 16 months old. All four are alive with none requiring permanent respiratory assistance.

Even though the data is on only four infants, the results are encouraging and support the advancement of ISIS-SMNRx into phase III studies for infants. With not too many treatments being available for SMA, the successful development of ISIS-SMNRx would translate into big money for Isis.

Shares were up 15.5% and Isis remains on track to move the experimental drug into phase III studies this year. The main question is will partner Biogen (BIIB) opt in and in-license the candidate.

Raptor Scores in Huntington’s Disease Study: Raptor’s shares jumped 14.9% with the company reporting encouraging top-line results on its Huntington’s disease experimental drug, RP103, from an ongoing phase II/III study. At 18 months, total motor score (:TMS) progression, the primary endpoint, was 32% slower in patients treated with RP103 compared to placebo. The significant slowdown of loss of muscle control in Huntington’s disease patients is a good sign.

Huntington's disease, a chronic and debilitating condition, is an area of high unmet medical need. If approved, the market for RP103 would be huge with more than 60,000 patients suffering from the disease across the world.

Onconova Falls on Late-Stage Data: A big loser last week was Onconova which saw its shares plunging 36.7% on disappointing phase III data. The company’s experimental cancer treatment, rigosertib, failed to achieve the primary endpoint in a study being conducted in treatment-experienced patients with higher risk myelodysplastic (:MDS) syndromes. The saving grace could be that a treatment benefit was seen in a subset of patients who had progressed on or failed hypomethylating agents (HMAs).

However, given the data, chances of rigosertib gaining approval for the higher risk MDS market are slim. The company has plans to conduct a phase III study in transfusion-dependent lower risk MDS patients.

Kalydeco Label Expanded: Vertex’s Kalydeco, which was earlier approved for CF patients with at least one copy of the G551D mutation, can now be used for eight more mutations. This expands the patient population for the drug. The company estimates that about 150 people in the U.S. have one of these additional eight mutations.

This approval is important as Vertex is already treating almost all G551D patients in the U.S. and EU. Kalydeco is under review in the EU for the additional eight mutations – approval would add an additional 200 patients to the patient population. Kalydeco is a key growth driver for Vertex and is expected to contribute $470 - $500 million to total revenues ($570 million - $600 million) in 2014.

Pricing Issues for Tecfidera in the EU? EU approval of Biogen’s oral multiple sclerosis treatment, Tecfidera, may be a major milestone for the company but the launch process in the EU depends on pricing and reimbursement in individual countries. The company may have hit the first roadblock in the U.K. with The National Institute for Health and Care Excellence (NICE) asking Biogen to submit additional information on Tecfidera.

According to the Appraisal Committee, there are still questions that need to be answered about the clinical and cost effectiveness of the drug for adults with relapsing-remitting multiple sclerosis. Biogen has time until Mar 12 to respond to NICE. The company may well have to come up with higher discounts to smoothen the pricing and reimbursement process.

Other Developments:

CHMP Supports BioMarin’s Vimizim: Last Friday, the CHMP voted in favor of approving BioMarin’s (BMRN) enzyme replacement therapy, Vimizim, for Morquio A syndrome that is estimated to affect 3,000 people in the developed world. This news came on the heels of the approval of the drug in the U.S. Shares were up almost 5% on the news. EU approval should follow shortly. With the U.S. accounting for only 15% of the 1,500 patients identified by BioMarin, EU approval remains key.

Amarin’s Vascepa Gets 3 Years Exclusivity: The FDA granted three years of marketing exclusivity to Amarin’s (AMRN) Vascepa last week. Amarin, however, was expecting five years of marketing exclusivity, not three years. The company is thinking of challenging the decision.

The Week So Far:

The week so far has turned out to be pretty eventful with InterMune (ITMN) being a clear winner.

InterMune Scores Huge Win in Phase III Study: InterMune’s shares skyrocketed 170.8% on impressive data from the company’s phase III study on its lung disease drug, Esbriet (pirfenidone). The company is now looking to resubmit an NDA in the U.S.

Another Orphan Drug Designation for Soliris: Alexion’s (ALXN) Soliris was granted orphan drug designation in the EU for the prevention of delayed graft function (:DGF) after solid organ transplantation.

Regeneron’s Eylea Under FDA Review: Regeneron (REGN) continues to make progress with its label expansion efforts for eye drug, Eylea. The FDA has granted standard review to Eylea for an additional indication – the treatment of macular edema following branch retinal vein occlusion (:BRVO).

A Closer Look at VIVUS’ Results: Licensing revenue helped VIVUS (VVUS) post a lower loss as well as significantly higher fourth quarter revenues. Despite this, shares fell 13.2% as investors remained focused on obesity drug Qsymia’s performance.

Other companies like Jazz (JAZZ) and United Therapeutics (UTHR) also reported fourth quarter results this week. Both companies missed consensus expectations for fourth quarter revenues.

Later this week, more earnings reports will filter in from companies like Halozyme Therapeutics, Inc. (HALO), Alkermes (ALKS), Medivation (MDVN), Arena (ARNA) and Auxilium (AUXL).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Read the Full Research Report on ALXN
Read the Full Research Report on VRTX
Read the Full Research Report on UTHR
Read the Full Research Report on REGN
Read the Full Research Report on ISIS
Read the Full Research Report on VVUS
Read the Full Research Report on BMRN
Read the Full Research Report on ITMN
Read the Full Research Report on AUXL
Read the Full Research Report on ALKS
Read the Full Research Report on MDVN
Read the Full Research Report on ARNA
Read the Full Research Report on BIIB


Zacks Investment Research