Healthcare stocks forge ahead despite trade-wars jitters; but that makes sense if you think about it.

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Currently considered a “hedge” against the US-China trade clashes, which don’t bear directly on the provision of healthcare here in the US, here are the three top winners and a couple of sad sacks for the post-holiday follow-on week:

  1. Kodiak Sciences Inc.(Nasdaq:KOD)led advancing issues, rocketing 118% over the week to $64.47 after announcing the specific pricing of a public stock offering. Palo Alto, CA-based Kodiak plans to sell 6 million shares at a price of $46 per share–well below its closing price the day prior to news of the offering. Most biotech stocks fall when public stock offerings are announced at a lower share price. However, investors remain enthusiastic about an announcement Kodiak made last week about a royalty deal with Baker Brothers Advisors for experimental eye-disease drug KSI-301. Kodiak’s lead product candidate, KSI-301, is a novel anti-VEGF antibody biopolymer conjugate being developed for the treatment of retinal vascular diseases including age-related macular degeneration and diabetic eye diseases. Kodiak’s pricing for its public stock offering reflected the strong position the company is in. The sale of 6 million new shares represents more than 16% of outstanding shares. However, Kodiak’s offering price of $46 per share was only 6.5% lower than its closing price last Tuesday. Investors are clearly optimistic that buying the stock at $46 per share will lead to significant returns.

 

  1. Elsewhere, Aurinia Pharmaceuticals Inc. (Nasdaq:AUPH) soared 94% to $15.44 after the company announced positive efficacy and safety results from a Phase 3 trial for a drug that treats a common complication of lupus, an autoimmune disease. The Edmonton, Alberta-based company announced positive efficacy and safety results from its pivotal AURORA Phase 3 trial of voclosporin, in combination with mycophenolate and low-dose corticosteroids, in the treatment of lupus nephritis. Lupus nephritis is an inflammation of the kidney caused by Systemic Lupus Erythematosus. “This extraordinary pivotal data confirms voclosporin’s ability to achieve statistically significant improvements in clinically meaningful endpoints for this complex disease, with a comparable safety profile to the current standard of care,” CMO Neil Solomons said. “This data represents a significant advance for people living with LN, which can lead to irreversible kidney damage, eventual kidney failure and death.” Voclosporin was granted Fast Track designation by the FDA in 2016. Aurinia plans to submit an NDA to the FDA in the first half of 2020.

 

  1. And Proteostasis Therapeutics Inc. (Nasdaq:PTI) surged 45% to $3.55. The clinical stage biopharmaceutical company, developing therapies to treat cystic fibrosis (CF) and other diseases caused by dysfunctional protein processing, announced that it has regained compliance with the requirement of the Nasdaq Global Market to maintain a minimum bid price of $1.00 per share. The letter noted that as of November 26, 2019, the Boston, MA-based company evidenced a closing bid price of its common stock in excess of the $1.00 minimum requirement for at least ten consecutive trading days. Accordingly, Proteostasis has regained compliance with Nasdaq Listing Rule 5450(a)(1) and “Nasdaq considers the matter closed.”

 

  1. But thinly traded micro-cap Aldeyra Therapeutics Inc. (Nasdaq:ALDX) plummeted 41% to $4.73 in response to results from the first phase of a two-part Phase 3 clinical trial, RENEW, evaluating topical ophthalmic solution reproxalap, an aldehyde trap, in patients with moderate-to-severe dry eye disease. The Lexington, MA-based company says the objective of Part 1 was confirming the dosing regimen, endpoints and sample size for Part 2, expected to start in H1 2020. Part 1 data showed activity compared to vehicle (placebo) for the induction-maintenance dosing regimen, apparently more robust than the constant dosing group (induction-maintenance regimen will be advanced to Part 2). In the induction-maintenance dosing arm, RENEW met one primary endpoint, patient-reported ocular dryness score from weeks 2-12, but failed to achieve the other, fluorescein nasal region staining score from weeks 2-12 (cherry-picked data showed a statistically valid effect during weeks 1-4 and at week 2).

 

  1. And Cara Therapeutics Inc. (Nasdaq:CARA)skidded 36% to $16.75 after the drugmaker announced results from a Phase 2 clinical study evaluating Oral Korsuva in treating chronic kidney disease (CKD) patients with moderate to severe pruritis (itching). Stamford, CT-based Cara said that Oral Korsuva met the primary endpoint of the study–a statistically significant reduction in mean worst itching intensity numeric rating scale (WI-NRS) score after a 12-week treatment period. However, the drug didn’t meet two secondary endpoints. With Cara’s shares tanking, it’s obvious that investors are focused more on the failure of Oral Korsuva to achieve the secondary endpoints of the Phase 2 study than on the drug’s success in meeting the primary endpoint. But there was good news and bad news with those secondary endpoints. The bad news was that Oral Korsuva didn’t achieve statistically significant improvement in the proportion of patients taking a 1 mg dose who posted a 3-point or greater increase from the baseline in the weekly mean of the daily WI-NRS scores after 12 weeks of treatment.
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