The S&P Select Biotech Index continued to trade around the 50-day moving average as macro considerations remain dominant.
Jefferies published a note highlighting biotech is still cheap at 2x EV/Cash (well below historical 3x ratio) as valuation came down, but cash and access to capital went up with an improved financing landscape in 1Q 2024. PPI, CPI, retail sales and housing market data this week may provide traders further clues as to when the backdrop might improve for biotech to generally trade back up toward historical averages
M&A:
Sanofi (SNY) agreed to pay $500 million upfront and a further $700 million in near term additional payments to license Novavax's (NVAX) COVID-19 vaccine. NVAX may receive up to an additional $200 million and mid-double digit royalties. NVAX also lowered 2024 revenue guidance from $800-1,000 million to $400-$600 million. NVAX was trading at $340 million enterprise value and had an accumulated deficit of $4.8 billion before the announcement
Takeda Pharmaceuticals (TAK) paid $100 million to AC Immune (ACIU) for an option to license global rights to AC-24.060, an anti-Abeta active immunotherapy vaccine candidate to treat Alzheimer's disease. If exercised, payments under the license can reach $2.1 billion and tiered double digit royalties will also be paid
Clinical:
Macrogenics (MGNX) fell >60% after reporting the mid stage trial in prostate cancer showed 5 patient deaths. The stock had rallied >300% since last October before completely retracing the move
Rapt therapeutics (RAPT) fell ~40% on announcing it intended to close and unblind its P2b trial of CCR therapy zelnecirnon in AD and asthma following a clinical hold issued by FDA based on a SAE of liver failure
CytomX (CTMX) was under pressure after announcing initial tumor response data from EGFR-CD3 probody received mixed reviews as CX-904 only showed two partial responses in pancreatic cancer patients, but no other tumor types showed responses
Pfizer (PFE) paused a study of an experimental gene therapy for muscular dystrophy after a child who received it died suddenly ~ 1 year after being dosed. Most analysts do not count any revenues for this program in PFE financial models
Capital Markets:
Karyopharm therapeutics (KPTI) announced a refinancing transaction that exchanged existing convertible notes that were due in 2025 for notes due in 2029, amended a royalty agreement and issued a new $100 million term loan due in 2028. These transactions allow the company to comfortable operate beyond the planned phase 3 data updates in 2025
Corporate Updates & Earnings:
Argenx (ARGX) reported a modest topline beat, but missed whisper expectations of a $400m+ revenue number, expenses were ahead
Embecta (EMBC) reported a quarterly top ($287 vs street $264 million) and bottom line (aEPS $0.67 vs street $0.40) beat. The bottom end of the 2024 guidance range was raised
Viatris (VTRS) reported a generally inline 1Q, but lowered 2024 revenue and EPS guidance due to divestitures and acquires IPR&D
Amicus Therapeutics (FOLD) announced in line 1Q revenue, lower expenses and increased 2024 Galafold growth expectations
Acadia Pharmaceuticals (ACAD) reported 1Q revenue ~1% below and bottom line well ahead of the street ($0.10 vs street $0.06). 2024 guidance was maintained
Dynavax (DVAX) reported a 1Q revenue miss (revenue $50.8 vs street $55 million) due to seasonality, but reaffirmed 2024 Heplisav-B revenue of $265-280 million
Exact Sciences (EXAS) reported 1Q revenue ahead ($637 vs $629 million street), but a bottom line miss (-$0.60 vs -$0.47 street). 2024 guidance was reiterated
Revance (RVNC) reported 1Q revenue `7% light, but reiterated 2024 revenue guidance of at least $280 million
Beigene (BGNE) reported a 1Q revenue beat of $715 vs street $676 million, an 85% increase from the prior year
Pacira BioSciences (PCRX) reported a 1Q revenue beat ($167 vs street $163 million) and a new $150 million share repurchase program
Intra-Cellular therapies (ITCI) reported 1Q Caplyta revenue ahead by 2.4% and reiterated 2024 FY guidance for >40% growth
Apellis Pharmaceuticals (APLS) reported 1Q revenue ahead by ~%, but expenses were higher by ~4%
Culling the Herd:
Acelyrin (SLRN) announced founder and CEO Shao-Lee Lin stepped down and the Chief Legal Officer will be taking over the role. SLRN completed one of the largest biotech IPOs in recent years raising >$625 million, but has since suffered operational mis-steps and has been trading below cash value
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