Week’s opening stock salvo: Esperion, Nektar, CytomX soar; Aevi Genomic thrashed

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Esperion Therapeutics Inc. (Nasdaq: ESPR) stock recently recovered big time from last Amgen-induced beat down to touch an 18-month high after the company outlined its path to FDA approval for its cholesterol-busting drug, bempedoic acid.

I had  previously reported that Esperion plummeted 24% for the week, being dragged down by Amgen’s poor results from a cholesterol drug it’s testing. The reason for the across-the-board biotech bashing was that results for Amgen’s Repatha didn’t meet Wall Street’s expectations. One analyst, however, said the bite to Experion stock was unwarranted, arguing that the company’s drug will likely be priced much lower.

Needham analyst Chad Messer said in a note to clients that Ann Arbor, MI-based Esperion’s drug has a different method of reducing “bad” LDL cholesterol. And it will be offered at a much cheaper price than Amgen’s Repatha, at $14,100 per year.

“We see a negative read through to Esperion as counterintuitive,” Messer added.

Messer was right as was our prediction for a swift upward correction as Esperion an­nounced that the FDA is will­ing to sign off on an ap­proval for its lead drug–pro­vided it clears LDL low­er­ing goals in a piv­otal study–with­out a car­dio study as a pre­req­ui­site.

According to EndPoints, Es­pe­rion’s wild ride began last sum­mer when shares tanked as the com­pany raised the pos­si­bil­ity that the FDA might de­mand it com­plete a car­dio out­comes trial be­fore mak­ing a de­ci­sion on mar­ket­ing. Esperion management noted that the FDA is ready to use its LDL low­er­ing data as suf­fi­cient to sup­port an ap­proval. Es­pe­rion be­lieves it will be ready to disseminate top-line re­sults in mid-2018.

Steve’s Take:

No doubt there will be some profit-taking the next few days, but the prospects of FDA approval for Esperion’s PCSK9 drug are promising and I’d add this issue to your high-risk, medium-term collection. (Update: Mild profit taking did ensue Tuesday (March 14, 2017) with shares slipping 4% to $39.40.)

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Elsewhere, Nektar Therapeutics Inc. (Nasdaq: NKTR) rocketed $6.61, or 43%, to $22.11. The South San Francisco-based company, announced positive results from its Phase 3 trial of NKTR-181, a first-in-class opioid analgesic.

NKTR-181 is a new chemical entity (NCE). It is the first full mu-opioid agonist that is designed to relieve pain without the euphoria associated with abuse and addiction. The U.S. Food and Drug Administration (FDA) has given the drug “Fast Track” designation.

The trial compared twice-daily doses of NKTR-181 tablets to placebo in more than 600 patients with moderate to severe chronic low back pain who had no previous opioid therapy. The trial met the primary efficacy endpoint of significantly improved chronic back pain relief. Secondary endpoints were also met.

“The data from this efficacy study are extremely important because they demonstrate that NKTR-181 produces strong analgesia in patients suffering from chronic pain while NKTR-181 has also demonstrated significantly lower abuse potential than oxycodone in a human abuse potential study,” said Martin Hale, a clinical investigator and medical director of Gold Coast Research, in a statement.

Hale added, “The data for NKTR-181 suggest that it is a transformational pain medicine that could fundamentally change how we treat patients with chronic pain conditions.”

In a meeting with analysts several weeks ago, Howard Robin, the company’s CEO, said,

“Assuming positive Phase 3 efficacy results from the current SUMMIT-07 trial, we plan to out-license NKTR-181 to a company that has a strong presence and long-term commitment in the pain market.”

Steve’s Take:

Mr. Robin got his positive results, so off to market he goes for a big payday; which is why investors swooped in to get an early piece of a hoped-for healthy upside. The stock is probably priced to perfection right now. I’d wait to see if it drifts downward approx 5% to the $20-$21 range before adding to an existing position. (Update: Shares were virtually unchanged Tuesday (March 14, 2017) at $22.15.)

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And CytomX Therapeutics Inc. (Nasdaq: CTMX) rocketed 24% to $18.89 after Bristol-Myers agreed to pay the cancer-drug specialist $200 million upfront to expand a drug development deal. FirstWord Pharma reported that Bristol-Myers and San Francisco-based CytomX expanded a deal signed in 2014 to discover novel cancer therapies that will now include up to eight additional targets using the latter’s proprietary Probody platform.

Under the terms, Bristol-Myers will also provide research funding over the course of the research agreement. The companies added that CytomX will also be eligible to receive up to $448 million in future development, regulatory and sales milestone payments for each collaboration target, as well as tiered royalties from the mid-single digits to low-double digits on net sales of each product marketed by Bristol-Myers Squibb.

“CytomX’s Probody platform has enhanced our discovery research as we seek to direct the therapeutic effects of immunotherapy in a more targeted approach against tumors,” remarked Carl Decicco, head of discovery at Bristol-Myers Squibb, adding “we look forward to working more extensively with CytomX on this innovative and potentially disruptive approach in oncology as well as other disease areas.”

Steve’s Take:

Nothing like having a partner at the highest commercial ranks as an enthusiastic backer, I always say. CytomX has that with BMS and their agreement is expanding, not contracting. All positives. I’d add CytomX as a new high-risk, long-term issue with good upside potential, and add to an existing position. (Update: Shares slipped 3% on normal profit-taking Tuesday (March 14, 2017).)

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But thinly traded nano cap Aevi Genomic Medicine Inc. (Nasdaq:GNMX) plunged 59% to $2.21 on more than a 5x surge in volume in response its announcement  that lead product candidate AEVI-001 failed to beat placebo in its SAGA clinical trial in adolescents with mGluR mutation-positive attention deficit hyperactivity disorder (ADHD). The study didn’t achieve its primary endpoint of a statistically valid reduction in a rating scale called ADHD-RS.

SAGA tested AEVI-001 in adolescents 12 to 17 years old with ADHD who have a mutation in mGluR. The mGluR mutation causes a glutamate imbalance in patients, which Aevi hopes can be treated with AEVI-001, an oral selective activator/modulator of mGluRs.

Unfortunately, the drug didn’t meet the primary endpoint of reducing patients’ ADHD rating scale (ADHD-RS) scores more than the placebo.

It wasn’t entirely bad news, however. Wayne, PA-based Aevi Genomic (which Motley Fool says was once called Medgenics) pointed out some potentially encouraging signs including an improvement on the inattention subscale that had a p-value of 0.0515, and isn’t giving up on AEVI-001. The company said it plans to study a higher dose of AEVI-001, redefine the genomic biomarker, and study the drug in younger patients, which management believes will make it easier to demonstrate an effect.

Steve’s Take:

While those are all good signs and swell ideas for AEVI-001, and might lead to a pathway toward eventual FDA approval, Aevi is on a slippery slope like so many other one-drug wonders with just $39.84 million in cash at the end of 2016. There’s always a secondary offering, but with this latest shellacking, current shareholders would get creamed. I’d say pass on this one for now. (Update: Sure enough, investors are bailing in droves with shares down another 16% Tuesday (Monday 14, 2017).)

Steve Walker has no position in any stocks mentioned. MedContent Inc. has no position in any stocks mentioned. MondayMorning.com has a disclosure policy.