Why June Could be a Pivotal Month for These 2 Biotechs

Why June Could be a Pivotal Month for These 2 Biotechs May 30, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Catalysts for biotech companies can come in different shapes and sizes. David Liang, writing for The Motley Fool, takes a look at two biotech companies facing potential catalysts this month, but for two very different reasons.

1. Neos Therapeutics

Headquartered in Grand Prairie, Texas, Neos Therapeutics uses its proprietary, extended-release drug delivery technology platform to develop, manufacture and commercialize branded products. It has been used it for attention deficit hyperactivity disorder (ADHD), including an extended-release orally disintegrating tablet.

The company’s product, Adzenys XR-ODT, has become the most most prescribed alternative dosage form for the treatment of ADHD in the short time it’s been on the market. Through January and March of this year, there were 32,296 prescriptions filled, and monthly prescriptions grew 20 percent month-over-month. Total Adzenys revenue was $3.1 million.

The company is also developing an ODT version of methylphenidate, marketed under the brand name Concerta. The PDUFA date for Neos’ version is June 19. Liang writes, “While Concerta has been generic for some time, Neos estimates that in 2016, methylphenidate generated $3.4 billion in sales in the U.S. alone. For a company with a market cap below $200 million, approval of Cotempla XR-ODT could have huge implications going forward.”

Neos is currently trading for $8.15.

2. Portola Pharmaceuticals

Based in South San Francisco, Calif., Portola Pharmaceuticals focuses on thrombosis, other hematologic disorders and inflammation. It is currently advancing three compounds, betrixaban for extended duration VTE prophylaxis in acute medically ill patients, Andexanet alfa, to reverse anticoagulant activity in patients treated with a FXa inhibitor, and cerdulatinib (PRT2070), an oral, dual Syk-JAK inhibitor for patients with hematological cancers.

Betrixaban has a PDUFA date of June 24. Liang writes, “Although investors are arguably more excited for the potential approval of andexanet alfa, betrixiban is no slouch. While other factor Xa anticoagulants exist (Johnson & Johnson ’s Xarelto, and Bristol-Myer /Pfizer ’s Eliquis to name a few), none are approved specifically for extended-duration prevention of blood clots in acute medically ill patients.”

Liang has some concerns over the betrixiban approval, because there were issues with its Phase III data that caused a rejection of the drug by the FDA in August 2016. It performed well against another anticoagulant, Lovenox, in the entire study, but it didn’t outperform a subset of patients that are considered to be at higher risk of developing blood clots.

At the same time, it had also received a complete response letter from the FDA for AndexXa. The FDA wanted more data additional efficacy data regarding the drug’s use with other anticoagulants other than warfarin, as well as more data regarding its manufacturing process.

On May 18, the company announced preclinical and clinical data on cerdulatinib in relapsed/refractory B-cell malignancies would be presented at the European Hematology Association (EHA), which will be held in Madrid, Spain from June 22-25.

Portola is currently trading for $36.46.

Noting that the companies are dramatically different, Liang says, “Overall, I’d say that Neos is the better risk-adjusted bet today. The company already has one drug approved and has been executing well on its marketing rollout. In addition, betrixiban’s controversial data in its Phase III trial leads me to believe the FDA may have further concerns involving this product before it receives the FDA’s seal of approval. While both are great companies, I’d put my money on Neos.”

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