Pharma's big movers: Amylin up on obesity drug, Hep C drug lifts Vertex

News that Amylin Pharmaceuticals (AMLN) inked a billion-dollar development deal with Takeda Pharmaceutical for new obesity therapies was among the favorable developments in the sector on Monday that pushed several key stocks higher. Amylin shares were up nearly 10 percent in late trading after Japan's Takeda said it would pay the San Diego company an upfront payment of $75 million for its anti-obesity compounds and could offer additional payments ultimately exceeding $1 billion.

Among the other big movers, Vertex Pharmaceutical (VRTX) shares advanced more than 8 percent in late trading after a report over the weekend that middle-stage trials of its telaprevir-based treatment for the hepatitis C virus showed more than 80 percent of patients achieved a "sustained viral response," meaning the drug removed the virus from their bodies.
Amylin's rally was interesting as its pramlintide/metreleptin and davalintide compounds are currently in middle-stage trials while three other competitors -- Arena Pharmaceuticals (ARNA), Vivus (VVUS) and Orexigen Therapeutics (OREX) -- all are further along in the race to be first to market with an obesity drug.

Pramlintide/metreleptin is a combination treatment comprising Amylin's pramlintide hormone and Amgen's (AMGN) hormone leptin. In 2006, Amylin acquired the rights to the leptin molecular franchise and program from Amgen. Preliminary results from a trial of the investigational drug involved 608 overweight patients. The study showed that patients treated with the drug lost 11 percent of their body weight (22 pounds) after taking the highest dose. The group taking a placebo, or dummy pill, lost an average of 1.8 percent of its body weight (4 pounds).

The most severely obese patients in the trial, though, didn't benefit as much as patients with a body mass index of less than 35. The drug needs to be injected, while its above rivals are oral pills. But some think Amylin's drug may be "the most effective drug of all." It seems that Takeda thinks that too.

Cambridge, Massachussetts Vertex' run-up was a direct result of the fact that it drugs targets the liver disease caused by the hepatitis C virus, a serious public health concern affecting 3.2 million individuals in the United States. The disease is spread through direct contact with the blood of infected people and affects as many as 100 million people worldwide.

Also in the plus column on Monday was Schering-Plough (SGP), which on Sunday released positive results of its rival Hepatitis C drug boceprevir. Boceprevir is considered one of the most important products being developed by Schering, which is being acquired by Merck & Co. (MRK) for $41.1 billion.

In the late-stage trial, of the patients who had no response to other drugs, a hard-to-treat group called "null responders," some 25 percent of them treated with the compound had a "sustained virologic response," meaning their virus levels were too low to measure.

After 48 weeks of treatment, 55 percent of patients had a sustained virologic response. Vertex said 57 percent of null responders had a sustained response after 48 weeks of treatment with the company's drug telaprevir. Side effect of both companie's drugs included fatigue, anemia, nausea and headache.

Protalix BioTherapeutics (PLX) was also in rally mode, with its shares up over 8 percent after the Israeli business newspaper Globes reported Pfizer (PFE) representatives have visited Protalix's plant in Carmiel in the past few days. The visit came two weeks after Protalix announced the success of its late-stage trials trial for Uplyso, its treatment for Gaucher's disease. This could set the stage to a bidding war as rumors have been flying that Teva Pharmaceutical (TEVA) is also considering buying Protalix. After all, the two share a chairman.

Dendreon
(DNDN) was slightly negative in afternoon trading after its shares had initially jumped as much as 5 percent on news that company had completed its U.S. regulatory submission for its closely watched experimental prostate cancer vaccine Provenge ahead of schedule. The company expects regulators to respond by mid-2010.

Provenge would be the first therapeutic cancer vaccine if the U.S. Food and Drug Administration approves it. Unlike conventional vaccines, therapeutic vaccines are given after the condition appears in patients. Provenge is produced from a patient's white blood cells and tumor proteins and is administered when the disease no longer responds to hormone blockers (the standard treatment). The aims to train the patient's own immune system to attack the cancer and has fewer side effects than chemo.

Dendreon has known ups and downs with Provenge, as the FDA has already rejected the treatment in May 2007. In April, when Dendreon announced positive results from a study, it said it would submit further data to the FDA in the fourth quarter. Provenge certainly has blockbuster potential if approved, with the company planning for potential annual sales of $1.2 billion to $2.5 billion.

Prostate cancer is diagnosed in one of every six American men. In 2009, more than 192,000 men will be diagnosed with prostate cancer, and more than 27,000 men will die from the disease.

Also on the down side, GTx Inc. (GTXI) shares sank over 49 percent in trading after it said the FDA did not approve its experimental drug to reduce fractures in men with prostate cancer because of deficiencies it found in the clinical trials. The FDA has asked the company to conduct a second late-stage study, meaning it would have to start the process all over again. The FDA also wants GTx to show that the treatment does not have a detrimental effect on either time-to-disease progression or overall survival.

Of course, analysts now say they were not surprised by the FDA decision, with some of them going as far as to say that the company might ultimately decide to drop development of the drug. The company will likely need to raise cash to support the additional trials and may have to go to the capital markets or look for partners.


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