Wednesday, April 23, 2014

Biotech Acquisition Frenzy, One Week With Three Very Big Pharma Deals

Hello Friends today we take a look at a couple of high flying deals that have occurred in the biotech industry in one week. This in part has been one great week for biotech, and these deals should keep the momentum going for quite some time (not for eternity although that would be pretty cool haha). All these deals are big for the pharmaceutical industry because these companies needed to make these deals to stay afloat. We say that because a lot of these big pharmaceutical companies have been closing in on patent cliffs ready to fall off the edge, yes "cliff" sounds a little harsh to me as well. That is that these big pharma companies have expiring drug patent compounds in which generic companies can come in and mass produce the same compound at a lower price. So as you can see this takes away from the big pharmaceutical company's bottom line. Today we look at these deals more closely to evaluate why they are beneficial.
The First close call deal we are looking at today was where Pfizer (NYSE: PFE) attempted to purchase AstraZeneca PLC (NYSE:AZN) for $100 billion dollars in cash. Both companies have been watching declining sales as a lot of their drug compounds have hit the patent cliff. For instance once of Pfizer's best selling drug Lipitor has seen its sales decline by a huge margin this past year, and will continue to decline because of generic competition. For instance sales of Lipitor dropped as much as 54% in 2013 to only $432 million dollars. AstraZeneca is in a similar situation as it has generic competition launching a drug in May on its way against Nexium which is a heartburn and Ulcer drug. That will hit Astrazeneca in a big way! Also the company is expected to lose out on another big selling drug known as Crestor which is used for patients with Cholesterol which is a huge market. AstraZeneca lost $2.2 billion dollars this past quarter because of losing exclusivity for its drugs going off patent. They each have someone to gain from one another so we think this deal would have made sense especially since both are lacking in the innovation space. Astrazeneca wants a cancer pipeline that it truly lacks, and Pfizer wants to gain some cardiovascular compounds that it has exclusivity too. The deal was rejected by AstraZeneca, so now it leaves these companies with very little options. But what we think would help would be for these two big pharma companies to seek out smaller cap biotech stocks that are in the stages of innovation. Maybe they could even target well established biotech stocks like a Gilead Sciences (NASDAQ:GILD) or Celgene (NASDAQ:CELG).
The second deal that is being proposed to go through is the deal that Ackman and Valeant Pharmaceuticals (NYSE:VRX) are attempting to acquire Allergan (NYSE:AGN). Both Valeant and Ackman bid $45 billion dollars to take over the company together. Ackman was already a large shareholder of Allergan so it made sense to make a bid for Allergan with Valeant Pharmaceuticals. Allergan is the maker of dermatological botox treatments and has been very profitable in doing so. While I would agree that Allergan shareholders may be happy with the deal it leaves a significant problem in the eyes of Wall Street. The problem is that a lot of people are willing to consider what Ackman did as insider trading. Is it right for a large shareholder of a company to make a deal with another biotech company to buy said company? I mean Ackman knows with Valeant that the deal will go down soon, so can we say that it is insider trading? It all depends on who you ask but in our opinion this should be looked at more deeply, a lot of investors are already having trouble investing in the stock market, and seeing things like this go down doesn't add any more flavor into an already eroding investor base.
The final deal that took place this week deals with a bit of what we like to call a swap of assets (Sounds kind of bad , but it is really good lol). Novartis has agreed to buy Glaxosmithkline's cancer drug business for $14.5 billion dollars, and an additional $1.5 billion dollars if other milestones are met at a later time. In exchange for this deal Glaxosmithkline received most of Novartis' Vaccine business for $7.1 billion dollars plus some royalty fees included. Novartis wasn't gonna let go of everything, they kept the flu vaccine portion of the vaccine business. We think this is a good deal for both companies as they realign their businesses to become profitable in the future.
We think that these deals are just the beginning for M&A (Merger and Acquisitions) in the pharmaceutical industry. Look to additional buying/merging of other stocks in the coming months as these companies deal with their declining pipelines. We think that these big pharmaceutical companies should seek out small-cap biotech stocks that are innovating in the industry. For instance cancer biotechs creating immunotherapy, or the big popping of RNAi biotechs with new technologies and treatments. These are gonna be the real future game changers in the biotechnology industry. Let me know what you think about this article? Any comments you may want to add will be appreciated. Invest Wisely and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Monday, April 21, 2014

Sarepta Pushes Back, Getting The Go Ahead To File An NDA For Eteplirsen By The End of 2014

Hello friends I hope you all had a great Easter Weekend! Today we look at one of our top picks known as Sarepta Therapeutics (NASDAQ:SRPT). The company reported today that it has received the go ahead from the FDA to file an NDA for Eteplirsen by the end of 2014. The stock has bounced as much as 84% this morning in pre-market trading this morning, and we expect the move to continue in the coming days as people become privy to the FDA news. This news is good for both DMD patients who desperately need some type of treatment, and for investors who have been waiting patiently for some time to push back on a declining share price.

Let us dig in ( yes digging in like to some good food over the Easter Weekend mmmm, back to reality heh)  to see how this news will affect Sarepta's stock in the coming months. We are not going to sugar coat it because this is good news, but as with all good news there are some possible setbacks. The possible set back could be that the Eteplirsen drug may still be denied at the time of the FDA panel. This is because the go ahead Sarepta got today are not the same members of the FDA who will actually be at the panel to review the approval of Sarepta's drug compound. The company is filing the NDA for Eteplirsen on the new FDA rule known as " Accelerated Approval " in which the company can attempt to receive approval without having to run a confirmatory phase 3 trial for approval. The flip side though is that Sarepta will still have to run a trial to prove the benefit of Eteplirsen on patients with DMD. Therefore even after accelerated approval the drug can be yanked off the market if the trial results don't pan out.

Think of this news as good for now, but as an investor I would take some profit off the table before the FDA panel review, and after the panel review if it is successful. This is because the additional study could possibly not produce the required efficacy results needed to keep Eteplirsen on the market. At which point investor's profits would be wiped out completely. When we say to take profits we don't mean to take everything off the table, but you should at least take 25% to 50% of the profit off the table and then probably let the rest ride if you believe in the future fundamentals for Sarepta.

DMD is a rare disease that is greatly needed among patients, more specifically young boys that live with this debilitating disease. This disease involves the patient's muscles to weaken or get worse, and at some point the patient dies because they are unable to move or function properly. Back in November Sarepta had trouble convincing the FDA to allow them to file early for Eteplirsen, and these last few months have looked so dire and dark (okay I'm not describing a horror movie here lol). But today we have seen hope, but this type of hope did not come easy. This is because parents and lobbyists had to keep applying pressure on the FDA to consider the possibility for Accelerated Approval.

The first meeting with the FDA back on November did not go very well and the stock tanked as much as 62% on the news that the FDA would not consider early approval for Eteplirsen. This early approval ,as mentioned above, could possibly backfire if later trials reveal no benefit for these patients. So we remain optimistic for patients that desperately need this type of treatment, but on the other hand it could always end up going the other way. Keep in mind that sometimes things don't always turn out the way we like, so we say just remain somewhat cautious over the coming months. More can be read about this story on the Forbes Website here. We hope that you consider all these key points and continue to make money on some very well positioned biotech stocks. Invest Wisely and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Monday, April 14, 2014

Arena Pharmaceuticals Launches TV Ad To Boost Belviq Sales, Will It Be Enough?

Hello friends I hope you all had a great weekend and are ready to gain some more money or lose money depending on how the biotech index reacts this week . So far this morning the stock market seems to be rebounding with the stock market indexes recovering some losses. We will have to wait and see how it pans out the rest of the day but so far so good. Today we have excellent news from a small-cap biotechnology stock that we like that is known as Arena Pharmaceuticals (NASDAQ:ARNA).  Arena Pharmaceuticals is a biotechnology company focused in many areas but has a drug out on the market known as Belviq.
Today's news comes from Arena stating that their partner Eisai launched a national television campaign ad for Belviq.  Belviq had been approved by the FDA back on June 27, 2012 to treat patients that are obese or overweight. We believe that Arena should be able to obtain increased sales for Belviq because of this new tv campaign ad for one main reason. That main reason is exposure of the product, and we state this because a lot of people don't even know that new anti-obesity drugs have even been approved. This can be done by simply going around to asking your friends and family what Belviq is and I'm willing to bet most won't even know what you are talking about ( you will be the odd man out at that dinner table rofl).
Belviq has been approved to treat obese adults that meet certain requirements. Yes we can't all have the honor of popping Belviq to stay trim, but on the other hand these obese patients need it more. We are not cold hearted it's just that obese patients are in greater risk of other known diseases like Diabetes, Cholesterol, heart disease and other known systemic diseases. We believe that it is great that Belviq offers an option to these patients to be able to control their hunger, and turn their lives around for the better. The requirements for taking the obesity drug Belviq are for patients who have a BMI 30 kg/m or greater (obese) level ! That previous requirement is one requirement patients can also qualify with less BMI of 27 kg/m but have to have an additional medical condition that I have mentioned above like diabetes, cholesterol, or other morbid medical condition.
What we will say about Arena and Eisai that we like is that they are not just marketing Belviq as a "miracle drug" (that would be cool if such a drug did exist lol) , but the fact that both companies are telling patients they will have to accompany diet and exercise along with Belviq is reassuring. The main essence of Belviq is the "stomach is full effect"! We have all been through that where we eat something we like despite being full, well at least I have a few times hehe. The point is that this drug acts as an assistant to diet and exercise in that it can help patients lose weight slowly over time, and we believe that Arena will be able to obtain a lot in sales because of this new television ad. This new television ad campaign should give Belviq more exposure to a huge audience, and then patients can then fully understand the true power of the weight loss product.
We think it is good for patients to at least try out Belviq to see if they can turn their life around. Obesity is a growing epidemic that will not stop any time soon! Nearly 1/3 of the U.S. population is obese, and that means Arena Pharmaceuticals will excel with Belviq sales for years to come upon each success story. More of today's news can be found at this article here (PRNEWSWIRE, 2014)! Eventually sales for Belviq could lead to billions of dollars for Arena's bottom line. The good news about all this ( not just that the stock market recovered today heh) is that Arena Pharmaceuticals has a pipeline to fall back on, it is not just a one hit kid wonder. The company can take the compound and eventually incorporate it for diabetes patients as well. All in all we believe Arena is a good long term name to own, and we think this biotech will have a successful future. Don't forget to leave any comments you want to add to this story that you feel is necessary for people to know. Hope you enjoyed this article today, and have recovered a lot of your losses after this stock market correction (I like to call it that it makes me sleep better at night ^^). Stay strong with your biotech picks that you bought based off the due diligence you have done, and I will be seeing your quite shortly with some more biotech news. Invest Wisely, and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Tuesday, April 8, 2014

Pharmacyclics Files For NDA on IMBRUVICA, Stock Still Flat

Hello friends I know it has been awhile but today's article entails two key components (No the article won't be like an essay 2,000 words + lol). I assure you my intention is to post the news, and make your stock market day full of entertainment at least I hope so! The first component to be discussed will be Pharmacyclics (NASDAQ:PCYC) posting great news today, and the second part has to do why Pharmacyclics is flat despite posting good news. I didn't add in the second part to torture my readers, at least not intentionally. I'm adding the second part to understand why Pharmacyclics and other biotech stocks have remained flat despite their good news. This will help you all as investors understand what is occurring in your portfolios.
Let us start off with the good news for Pharmacyclics! Today Pharmacyclics posted news that they have submitted an sNDA (which stands for supplemental New Drug Application). What this means is that Pharmacyclics is adding more data from its phase 3 trial for IMBRUVICA . In an sNDA the company is submitting, or supplementing more data that can be used to approve the drug for additional conditions. In this case Pharmacyclics is looking for full approval of IMBRUVICA on all indications for CLL patients. It can also mean to expand upon the current approval conditions, in either case this news is good for Pharmacyclics and should help the company in the long run. IMBRUVICA added data is from the phase 3 trial known as the RESONATE study which was explored as a single agent therapy for treating patients with CLL that had at least done one prior therapy. IMBRUVICA was being compared to a placebo drug known as ofatumumab in a study with 391 patients (yes no kidding on the amount of patients suffering from cancer) and was conducted for an initial period of 26 weeks. Patients who showed to be responding to the treatment were considered for additional treatment if they met the criteria. 
So why the big deal for Pharmacyclics and subsequent approval ( sorry I don't mean to confuse you with the questions I'm just pondering out loud rofl)? The big deal behind Pharmacyclics approval has to deal with the fact that the company's Data Monitoring Committee (DMC) had stopped the trial early due to the fact that IMBRUVICA met its primary endpoint in the trial of Progression-Free Survival (PFS) and the key secondary endpoint of Overall Survival. This approval was made possible by the FDA's new form of approval known as Accelerated Approval (AA) in which a company can get approval early for a compound without having to run a confirmatory phase 3 trial. 
To understand the severity of this approval we have to understand what CLL is. CLL is Chronic Myeloid Leukemia and is a B-cell malignancy in which the white blood cells turn into cancer. There are around 16,000 patients in the U.S. that are diagnosed with CLL each year, and the estimated market opportunity for this indication can be up to $1.5 billion dollars. The article discussing the DMC halting the trial due to good results can be seen here.
This brings me to the second part of this article with all this news what is up with Pharmacyclics, and most importantly what the heck is up with all the biotech stocks lately? As I discussed in one of my other articles "Gilead's Punch To The Stock Market" part of the problem with biotech started with Gilead wanting to charge $84,000 for one course of treatment for Hepatitis C. A lot of investors and doctors are hung up on this and it all depends on your belief on whether the cost is justified or not. Personally I don't see the problem with it because Gilead's drug is not a treatment it is a full cure. That means patients who take Gilead's drug Sovaldi will be cured of the Hepatitis C virus. 
This type of drug compound can make up to an estimated $20 billion dollars or more in the future. In my opinion cancer biotechnology stocks charge more touting prices similar or higher yet receive no scrutiny whatsoever. Is that right just because cancer is more rare the cancer companies can charge high prices and everyone is okay with it? Yet Sovaldi which cures Hepatitis C and is below the average cancer drug causes biotech stocks to sell off? Regardless these biotech stocks have sold off over the last few days and it creates an excellent opportunity to get in for the long term on the names you love.
This brings me to my last point that I would like to make for today. This biotech selloff can also be attributed to what everyone has been beating to death the gimp horse lol, Wall street calling for a big correction. What Wall Street is establishing is somewhat true, because of lot of tech stocks and other stocks have soared higher on valuation yet earning estimates aren't meeting those valuations. Biotech is just speculative on drug compounds so investors dumped anything risky out of their portfolios just for the sake of playing "Follow the Investment leader" lol. That means they just saw what other investors were doing on Wall Street and sold off as well. I am going to tell you "NO" not because I'm angry at you hehe. You are my reader I want to tell you that you should take advantage of this sell off and average down on biotech stocks you believe in. 
Yes biotech stocks are risky but they eventually rise as they pass clinical trials. Always keep that in mind when you see your favorite stock down 10%, 20% etc or more! Stay strong and understand that instant gratifications does not make an intelligent investor. Eventually Pharmacyclics will trade at a higher price those who are patient will be rewarded, those who sell out do so because they lack faith in their investment decision. I hope you all have a great day and continue to do well in the stock market, and continue to find the biotech stocks that will shape your future into a bright one. Invest Wisely and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Tuesday, April 1, 2014

Opko Launches 4Kscore, Time For A New Testament

Hello friends I hope all is well with you , and no I'm not going to do a corny April Fools joke lol you probably would have seen it coming miles away in the distance........haha. I hope you all have been trading and investing well lately I have been focusing on building up the website some more for you all. So instead of the April Fools joke I'm plugging my own website lol, don't forget to check out all the pages on each biotechnology stock with tons and tons of resources. Anyways I could probably drown you with my endless plugging ( I won't do that lol) , but time to move on to some news for this week that is good for Opko Health Inc. (NASDAQ:OPK).
Opko Health announced yesterday on March 31st 2014 that it had launched its 4Kscore Test . This 4Kscore Test is used to test patients to determine if they have prostate cancer. Normal measures to test patients now for prostate cancer would be to perform tissue biopsies. So why is this test important? No not to test the knowledge of the patients (although you have to admit that would be pretty cool), but to test the likelihood that a patient has prostate cancer. This would allow patients the ability to get tested for prostate cancer without having to do an invasive prostate cancer tissue biopsy test.
The 4Kscore Test was well established as a highly probable test to determine the possibility of whether the patient has prostate cancer or not. This was tested in a momentous (big word for the week I hope I didn't break any brain cells....haha jk) study, because the test was tested at 26 Urology centers across the United States. The results of the study showed that 4Kscore Test was highly accurate in determining patients with prostate cancer, in comparison to tissue biopsies. Opko Health will present the full blinded data at the AUA annual Meeting in Orlando, Florida on May 18th 2014. As mentioned by the CEO in this quote (--Business Wire--) by the CEO of Opko by Dr. Phillip Frost:
“We believe the 4Kscore TestTM will be an important benefit for Urologists and their patients and may lead to lower overall healthcare costs,” said Phillip Frost, M.D." (--Business Wire--)
As seen in the quote above the CEO mentions that not only will patients benefit because of not having to do an invasive procedure anymore, but that patients can get tested at a much lower price point. This will save insurance companies and patients a lot of money in the long run. Time to get into the scientific portion, oh yes brace yourself for the "Science Factor" hehe. The test works by measuring 4 protein levels that are found in patients with prostate cancer . These 4 proteins are known as Kallikrein proteins and they are: Total PSA, Free PSA, Intact PSA, and Human Kallikrein 2. A better test to allow patients to know if they have prostate cancer can lead to quicker diagnosis, less invasive procedures, and lower costs. 
It is estimated that in 2014 there will be around 230,000 new cases of prostate cancer patients diagnosed with the disease. Of those 230,000 patients, about 30,000 of them will die from prostate cancer according to the estimates from the National Cancer Institute. Opko Health is a good long term company to own and it will continue to build its pipeline of both diagnostic products, and drug compounds. I wouldn't underestimate Dr. Frost as he has a very excellent track record for creating value in the biotech industry. I hope you all have a great day, and continue to read up on the top links on the website to learn more about biotech investing. Invest Wisely, and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Monday, March 24, 2014

Gilead's Punch To The Stock Market

Hello my friends I know it has been quite some time, I have been busy being punched in the face by Gilead Sciences (NASDAQ:GILD) lol. Before I move on I have not been literally punched in the face by an executive of Gilead haha, I would probably win. But the main point I will get to this article today, and the reason for my title is because Gilead came out on Friday with a bit of lets say off the wall news..... yes it was that bad.  As you all know if you have been following the biotech industry Gilead has been able to come up with pills that can cure patients of the Hepatitis C virus. Gilead's drug to treat patients with Hep C ( I will short it from now on for easier flow... I know I am a nice guy :/) is known as Sovaldi. The point though is that Gilead is combining it with another drug compound known as GS-5816, and this all oral-pill combination will be able to cure patients with hep C. Sounds all dandy now doesn't it? (spoiler alert it gets bad lol). The problem though is that there has been tons of headlines slamming Gilead for putting an $84,000 dollar per course treatment to help patients cure hep C.
We can sit here and debate this issue all day but in my honest opinion you can't put a price target on life. I understand on the one point that many patients won't be able to obtain the drug for treatment, but hopefully that's what Insurance is for. It's not like insurance companies don't gouge consumers now with crazy out of this world prices. If a drug will save one of their customers then they should do it, regardless of the price tag. ( I know I know alas we don't live in a Utopia world unfortunately lol, so this is a pipe dream). Now $84,000 dollars seems bad enough but why is this an issue now? Look at Biomarin Pharmaceuticals (NASDAQ:BMRN) it has been pricing rare disease drugs at such outrageous amounts yet nobody has said a peep about it and other rare drug disease companies. You think Gilead charging $84,000 per course of treatment is a lot? Heck one course of treatment with Gilead's Sovaldi , and you are cured of the Hep C virus. Biomarin's Vimzim drug will cost patients $380,000 per year as noted by this article by "The Street"!
So why on earth is Gilead's drug receiving so much backlash? Biomarin's drug and other rare disease companies charge a larger amount and don't even cure the patients, yet Gilead charges a lot less and there is a huge backlash against it? Why ? Because it is not targeting a rare disease, and so it must be punished? The main reason why I brought this point up is for two reasons! For one the biotech Sector took a big hit on this news on Friday March 21st 2014 because of this incident. Secondly I would like to be gracious host (okay yah that was a corny line lol) and provide investors with the opportunity to purchase the biotech names that took a big hit on this news the last 2 trading days. Especially today there were two RNAi biotechs that were hit really bad today one was Tekmira Pharmaceuticals (NASDAQ:TKMR) and the other was Arrowhead Research Corp (NASDAQ:ARWR). Both of these RNAi biotechs fell by more than 15% today , along with the whole biotech sector that got hit in the gut by the news of Gilead Sciences. The reason for Tekmira and Arrowhead dropping more than most other biotechs is because they are each creating treatments for the hepatitis b market, and possibly hep C in the future. So these two stocks were viewed in a more negative light as opposed to all the other biotechnology stocks.
As I have mentioned on many occasions before when the market creates a panic and investors are fearful it is a good time to do what I have just created called..........Biotech pickbasketing" (Don't worry I won't trademark that haha) , which in essence means to buy up more shares on your favorite biotech names. The selloff over this was irrational, just like the selloffs when there is danger over in Russia , don't worry I won't talk politics that is not my intention. One key thing to note though my friends is that the fundamentals of these companies won't change! Gilead still makes a lot of money, and is still a good long term name despite this short term hype selloff. If you learn anything out of this today (no it's not that I can create a wall of text, believe I can make it longer rofl) is that selloffs are irrational and can never be explained fully, but investors buying good multiple low value stocks in a sea of red is rational. That is something we can control, which is time, that is on our side. This is because while we took a "punch in the gut" from Gilead now, longer term we have done our due diligence and the stocks we have chosen will chug higher regardless of selloff hype. If you want to check out a good article explaining more about the recent Gilead Hep C news, check out this article from Forbes. I hope you all enjoyed this article today, and have learned something new. Don't forget to checkout "The Blacklist" tonight on NBC, yes I'm hooked lol I admit it! Have a great night, and don't let this Gilead punch to the stomach ruin your appetite, things will get better. Invest Wisely, and Remember "Due Diligence Creates The Best Picks In The Biotech Sector"!

Tuesday, March 18, 2014

Three RNAi Companies Worth Watching In 2014

There are three RNAi biotechnology stocks that are worth looking out for in 2014. These three biotechnology stocks are Rxi Pharmaceuticals (OTC:RXII), Tekmira Pharmaceuticals (TKMR), andArrowhead Research Corp (ARWR). All these three companies have one thing in common, and that is that they are all RNAi stocks.
RNAi -- RNA interference -- is the ability for siRNA molecules to be able to down regulate genes in a disease to stop the production of proteins from ever being created. The term siRNA means "small interfering RNA" molecules, whose sole job is to block genetic code. This halt in the production of proteins would then in turn cause a halt on the disease itself. There is however a key difference between these three RNAi biotechs. That difference is that they each have a different way of delivering the siRNA molecules to penetrate the cells surface. That means that each of these biotechs have developed their own delivery technology that sets one another apart.
Rxi Pharmaceuticals
Rxi Pharmaceuticals has developed a technology known as sd-rxRNA. We believe this technology has set a stronghold in the field of RNAi because the sd-rxRNA technology has been coined as a "self delivering" vehicle. This is because while all other RNAi companies have chosen to encapsulate their siRNA molecules into shields -- encapsulation of the molecule into a protective barrier -- scientists at Rxi Pharmaceuticals have figured out a way to deliver the RNAi oligonucleotide molecule to the cell without the need for a delivery vehicle. Thus far Rxi Pharmaceuticals tech relies on the patient receiving an injection into the skin for dermatological functions. Rxi hopes to achieve the same method of injection by injecting the RXI-109 compound directly intto the eye for its ophthalmologic indications. How this was accomplished is quite remarkable, and may provide a revolution in the field of RNAi medicine. What Rxi Pharmaceuticals has done is the ability to take the best prospects of RNAi and combine it with the best prospects of RNA. This combination of molecules forms a drug that can be sent through the patient's body to penetrate the targeted cell without degradation -- collapse of the molecule. With this safe and effective way to deliver RNAi molecules Rxi has chosen its first indication to be an anti-scarring drug known as RXI-109. This compound is currently in phase 2a clinical testing of patients with hypertrophic scars. The company expects to start two additional trials this year in 2014. One of the new trials will deal with keloid scars, and the other will deal with hypertrophic scars from breast reconstruction surgery. The final phase 1 multi-dose resultsfor RXI-109 showed that it was able to reduce CTGF -- Connective Tissue Growth Factor -- mRNA by as much as 50%. One key thing to notice is that Rxi Pharmaceuticals had to use much lower dosing, and that is because with scarring you don't want the maximum potential to knock down the genes of greater than 50%. That is because you want at least some CTFG expression to occur so that patients aren't left with an open wound. Therefore many people confuse this result, because they assume 90% gene knockdown is needed to produce proper efficacy results. Rxi Pharmaceuticals expects to report preliminary phase 2a results in hypertrophic scars by mid 2014 as an update after patients receiving the RXI-109 compound for at least 3 months. Rxi Pharmaceuticals expects to have enough cash to last the company until Q2 of 2015 according to the 10-k sec filing. The current cash on the balance sheet is $12.4 million dollars. In truth Rxi Pharmaceuticals will have to either find a partner willing to give upfront money so that Rxi can advance its pipeline, or will have to do some form of dilution to raise more cash this year. The CEO recently spoke at the ROTH presentation on March 11th 2014, and said that Rxi Pharmaceuticals received interest from four big funds willing to buy Rxi shares at current market prices so the company can get an influx of cash to advance its ophthalmology pipeline in a private form of dilution shown on Rxi Presentation slides page 14.
Tekmira Pharmaceuticals
Tekmira Pharmaceuticals has developed its own technology to deliver siRNA molecules known as the lipid nanoparticle delivery system or LNP. Tekmira encapsulates the siRNA molecule with the LNP and then sends it systemically to reach the cells nucleus. There the siRNA molecule goes to work knocking down the genes of the disease in question. The good part about the LNP technology though is that it can efficiently deliver other nucleic acid molecules to the tissues of choice. Which is the reason why Tekmira Pharmaceuticals was able to create partnerships with other companies interested in the LNP technology. The reason for Tekmira Pharmaceuticals having to create the LNP technology is because these mRNA -- messenger RNA -- molecules are fragile so they are easily degraded by the human body. This is where RNAi failed in the past because the mRNA was unable to ever reach its target location, and even if it did reach there wasn't enough genetic material to accomplish the ability of silencing the genes. With the Lipid Nanoparticle delivery system from Tekmira Pharmaceuticals the company has been able to get the mRNA through the body with no degradation whatsoever. This means that a full mRNA molecule can reach the target tissue and down regulate the genetic code within the cells nucleus causing the disease to be diminished. Tekmira Pharmaceuticals lead product candidate is in phase I/II testing in solid tumors. This clinical trial is targeting GI-NET -- Gastrointestinal Neuroendocrine Tumors, and ACC -- Adrenocortical carcinoma. Tekmira is testing out these indications first and with positive results from this phase I/II trial the company will begin to test on patients with Hepatocellular Carcinoma or Primary liver cancer. Tekmira's lead oncology program is known as TKM-PLK1 because it targets a specific protein that is responsible for the disease known as polo-like kinase 1. The Protein PLK1 is responsible for cell proliferation -- cell dividing -- and has been a clinical cancer target for big pharmaceutical companies for many years. The results from the phase I study were very encouraging because 6 out of 15 patients -- 40% -- achieved clinical benefit. This clinical benefit was achieved with doses that were equal to and greater than 0.6 mg/kg. Breaking down the results further 3 out of 4 patients in the ACC indication achieved stable disease which indicates the potential target for PLK1. Two of the GI-NET patients enrolled showed clinical benefit as well. One GI-NET patient achieved a partial response, and the other GI-NET patient showed stable disease. TKM-PLK1 has the ability to show that RNAi can be used to target oncology indications, and positive phase I/II results should help validate Tekmira's platform even more. As of September 30, 2013 Tekmira Pharmaceuticals has cash and cash equivalents of $71.4 million dollars. This cash is sufficient to carry the company all the way until the early portion of 2016. One risk to note is that even with this cash on hand there is a possibility the company can dilute shareholders at an earlier time for an influx of additional operating cash.
Arrowhead Research Corporation
Like Tekmira Pharmaceuticals Arrowhead Research has developed its own delivery technology for siRNA molecules. Arrowhead's technology is known as Dynamic Polyconjugates or DPC. Arrowhead's DPC technology mimics viruses because of its ability to easily pick the right entry point to enter the cell successfully. Also for the fact that it can travel through the systemic portion of the human body without being harmed by the immune system. The main component of the DPC technology is the polymer shield that is an outside barrier responsible for encapsulating the siRNA payload molecule. This shield protects the siRNA payload molecule so it can reach its target effectively, and it also blocks the body from receiving any undue toxicity from the molecule itself. Once the DPC reaches inside into the cell's cytoplasm it releases the siRNA payload which results in the gene knockdown of the disease that is being targeted. This phenomena occurs because the endosome in the cell is able to break down the polymer shield of the DPC, which results in the releasing of the payload. The ability for the DPC to be only broken down in the endosomal portion of the cell compared to the systemic portion of the body is what makes this technology unique in its own right. With the DPC technology on hand Arrowhead is targeting the hepatitis b virus. The hepatitis b virus compound from Arrowhead is known as ARC-520. This compound though is looking to do something far different than just treating the hepatitis b virus. The company is looking to create a functional cure for the hepatitis b virus. That is to create a hepatitis b s-angiten that is responsible for creating an immune state to the hepatitis b virus. This s-antigen would be responsible for your body being able to cure the virus completely removing it from the body. In proof of concept preclinical studies it was shown that by using ARC-520, primates were shown to achieve a hepatitis b virus gene knockdown of 99% and greater. This pre-clinical result proved the mechanism of action for ARC-520 to be able to reduce HBV RNA proteins and viral DNA with a single injection. With these results Arrowhead has been cleared to initiate a phase 2 trial for ARC-520. Arrowhead was given the ability to begin its phase 2a single dose study in patients with the chronic hepatitis b virus in Hong Kong. The trial will evaluate patients with two single dose ascending dose levels. These two dose levels will be 1.0 mg/kg and 2.0 mg/kg the maximum dose tested in the phase 1 safety study. The company expects to have top-line phase 2a results for this study by Q3 2014. As of December 31, 2013 Arrowhead has cash and cash equivalents of $85.5 million dollars according to the10q-SEC filing. This current cash is expected to carry the company for the next 12 months in which time investors should be aware of the risk of further dilution this year to increase operating cash flow.
In closing we believe that these three RNAi companies should be watched closely by investors in 2014. They each have developed a platform that could help lead RNAi into a new revolution in the way we treat diseases. Both Tekmira Pharmaceuticals and Arrowhead Research Corp have each developed their own delivery platforms for RNAi therapeutics. In the case for Rxi Pharmaceuticals though, it has gone beyond the typical RNAi delivery, because it has developed a "self delivering" technology compound that can revolutionize the RNAi field. All these companies have great long term potential to become the next best thing in the biotechnology industry.