Merck invests $1B in Seattle Genetics

Merck to acquire $1B equity stake in Seattle Genetics as part of collaborations

Seattle Genetics (SGEN) and Merck (MRK) announced two new strategic oncology collaborations.

The companies will globally develop and commercialize Seattle Genetics’ ladiratuzumab vedotin, an investigational antibody-drug conjugate, or ADC, targeting LIV-1, which is currently in phase 2 clinical trials for breast cancer and other solid tumors.

Merck presents results from Phase 3 KEYNOTE-426 study, Stockwinners
Merck bets heavily on Seattle Genetics, Stockwinners

The collaboration will pursue a broad joint development program evaluating ladiratuzumab vedotin as monotherapy and in combination with Merck’s anti-PD-1 therapy Keytruda in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors.

Under the terms of the agreement, Seattle Genetics will receive a $600M upfront payment and Merck will make a $1B equity investment in 5M shares of Seattle Genetics common stock at a price of $200 per share.

Seattle Genetics scores bug with Merck

In addition, Seattle Genetics is eligible for progress-dependent milestone payments of up to $2.6B.

Separately, Seattle Genetics has granted Merck an exclusive license to commercialize Tukysa, a small molecule tyrosine kinase inhibitor, for the treatment of HER2-positive cancers, in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe.

Seattle Genetics will receive $125M from Merck as an upfront payment and is eligible for progress-dependent milestones of up to $65M.

Under the terms of the agreement, Seattle Genetics and Merck will collaborate and equally share costs on the global development of ladiratuzumab vedotin and other LIV-1-targeting ADCs.

Breast cancer drug Liv-1 is expected to do well

The companies have agreed to jointly develop and share future costs and profits for ladiratuzumab vedotin on a 50:50 basis worldwide. Merck will pay Seattle Genetics $600M upfront and make a $1B equity investment in 5M shares of Seattle Genetics common stock at a price of $200 per share.

In addition, Seattle Genetics will be eligible to receive up to $2.6B in milestone payments, including $850M in development milestones and $1.75B in sales milestones.

The companies will jointly develop and commercialize ladiratuzumab vedotin and equally share profits worldwide.

The companies will co-commercialize in the U.S. and Europe. Seattle Genetics will be responsible for marketing applications for approval in the U.S. and Canada, and will record sales in the U.S., Canada and Europe.

Merck will be responsible for marketing applications for approval in Europe and in countries outside the U.S. and Canada, and will record sales in countries outside the U.S., Europe and Canada. Including the upfront payment, equity investment proceeds and potential milestone payments, Seattle Genetics is eligible to receive up to $4.2B.

Under the terms of the agreement, Merck has been granted exclusive rights to commercialize Tukysa in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe. Seattle Genetics retains commercial rights and will record sales in the U.S., Canada and Europe.

Merck will be responsible for marketing applications for approval in its territory, supported by the positive results from the HER2CLIMB clinical trial.

Merck will also co-fund a portion of the Tukysa global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers, including breast, colorectal, gastric and other cancers set forth in a global product development plan.

Seattle Genetics will continue to lead ongoing Tukysa global development planning and operational execution.

Merck will solely fund and conduct country-specific clinical trials necessary to support anticipated regulatory applications in its territory.

Seattle Genetics will receive from Merck $125M as an upfront payment and is eligible to receive progress-dependent milestones of up to $65M. Seattle Genetics will also receive $85M in prepaid research and development payments to be applied to Merck’s global development funding obligations. In addition, Seattle Genetics would receive tiered royalties on sales of Tukysa in Merck’s territory.

SGEN is up 14.8% to $172.40. MRK is up 1.4% to $85.00.

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Virtusa sold for $2 billion

Virtusa to be acquired by BPEA for $51.35 per share in cash deal valued at $2B

Baring Private Equity Asia, or BPEA, and Virtusa (VRTU) announced the companies have entered into a definitive merger agreement under which funds affiliated with BPEA will acquire all outstanding shares of common stock of Virtusa for $51.35 per share in an all-cash transaction valued at approximately $2B.

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia.

Virtusa sold for $2B

The companies said in a release, “The price per share to be paid in the transaction, which was unanimously approved by the Virtusa Board of Directors, represents a premium of approximately 27 percent to the closing price of Virtusa common stock on September 9, 2020, the last trading day prior to the transaction announcement, and premiums of approximately 29 percent and 46 percent to Virtusa’s volume-weighted average prices, or VWAP, for the last 30 and 60 trading days, respectively.

In addition, the price paid implies a valuation of 16.2x Firm Value / Last Twelve Months EBITDA as of June 30, 2020. On July 20, 2020, the Virtusa Board of Directors received an unsolicited proposal from an interested party to acquire Virtusa.

BPEA buys Virtusa for $2 billion

Following receipt of the offer, consistent with the Board’s fiduciary duties to maximize shareholder value, the Board authorized the Company and its financial advisors to engage with other potential strategic buyers and financial sponsors regarding a potential acquisition of Virtusa.

As part of this process, the Company signed non-disclosure agreements with five parties and engaged with two others.

After an independent review of the alternatives available, including the value creation opportunity through continued execution of the Company’s strategic plan, the Virtusa Board unanimously determined that the all-cash premium transaction with BPEA for $51.35 per share in cash maximizes value for Virtusa’s shareholders.

The transaction, which is expected to close in the first half of 2021, is subject to the approval of Virtusa’s shareholders, customary regulatory requirements, including approval from The Committee on Foreign Investment in the United States, or CFIUS, and customary closing conditions.

The transaction is not subject to a financing condition.

The Orogen Group, which holds 108,000 shares of Virtusa Convertible Preferred Stock and whose CEO is Vikram Pandit, an independent member of the Board, has entered into a voting agreement under which it has agreed to vote all of Orogen’s Convertible Preferred Stock in favor of the transaction.

Orogen Group is a major shareholder of Virtusa

Orogen’s shares of preferred stock are convertible into 3,000,000 shares of Virtusa common stock and represent approximately 10 percent of the voting power in the Company.

The directors and executive officers of Virtusa have also entered into this voting agreement, and hold an additional approximate 5.7% of the voting power of the Company.”

VRTU closed at $40.50, last traded at $50.45.

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Intra-Cellular sharply higher on it’s Bipolar drug

Intra-Cellular says lumateperone 42 mg met primary endpoint in Study 402

Intra-Cellular Therapies (ITCI) announced positive topline results from its Phase 3 clinical trial evaluating lumateperone as adjunctive therapy to lithium or valproate in the treatment of major depressive episodes associated with Bipolar I or Bipolar II disorder.

Intra-Cellular sharply higher on its bi-polar drug

In Study 402, once daily lumateperone 42 mg met the primary endpoint for improvement in depression as measured by change from baseline versus placebo on the MADRS total score.

Lumateperone 42 mg also met the key secondary endpoint, the CGI-BP-S Depression Score.

The lower lumateperone dose, 28 mg, showed a trend for a dose-related improvement in symptoms of depression but the results did not reach statistical significance.

Lumateperone demonstrated a favorable safety profile and was generally well-tolerated in the trial.

Lumateperone was successful in treating bipolar disorders

The most commonly reported adverse events that were observed at a rate greater than or equal to 5% and at least twice the rate of placebo were somnolence, dizziness, and nausea.

Rates of akathisia, restlessness, extrapyramidal symptoms, and changes in weight were similar to placebo.

This trial, in conjunction with our previously reported positive Phase 3 monotherapy study, Study 404, forms the basis for our sNDA for the treatment of bipolar depression in patients with Bipolar I or II disorder as monotherapy and adjunctive therapy which we expect to submit to the FDA in late 2020 or early 2021.

Study 402 was conducted globally in five countries including in the U.S. A total of 529 patients with moderate to severe major depressive episodes associated with either Bipolar I or Bipolar II disorder were randomized 1:1:1 to lumateperone 42 mg, 28 mg or placebo, while being maintained on lithium or valproate as mood stabilizers.

Lumateperone 42 mg met the primary endpoint by demonstrating a statistically significant improvement compared to placebo at week 6, as measured by change from baseline on the MADRS total score.

In the intent-to-treat study population, the least squares mean reduction from baseline for lumateperone 42 mg was 16.9 points, versus 14.5 points for placebo. Lumateperone 42 mg also met the key secondary endpoint of statistically significant improvement on the CGI-BP-S Depression Score.

Lumateperone 28 mg showed a trend for a dose-related improvement in symptoms of depression.

Though not formally tested against placebo since it did not separate on the primary endpoint, lumateperone 28 mg demonstrated a statistically significant improvement versus placebo on the CGI-BP-S. Lumateperone was generally well-tolerated with a favorable safety profile in the trial.

Adverse events were mostly mild to moderate and similar to those seen in prior studies in bipolar depression and schizophrenia, with no new adverse events observed. These findings provide further evidence supporting lumateperone’s favorable safety and tolerability profile across different patient populations.

 Importantly, lumateperone was generally safe and well tolerated in the study, adds the analyst. Hazlett believes that if approved in this indication, lumateperone would be differentiated as a potential first-line treatment option in depressive episodes associated with both bipolar I and bipolar II disorders.

ITCI is up 76% to $32.51

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American Airlines to fire 19,000 employees

American Airlines plans to cut 19,000 jobs if federal aid lapses, cuts to take effect October 1

In a regulatory filing, American Airlines (AAL) said:

“In short, American’s team will have at least 40,000 fewer people working Oct. 1 than we had when we entered this pandemic. We have worked to mitigate as many involuntary reductions as possible through voluntary programs.

Company says it will have 40,000 less employees on October 1

Across the mainline and regional carriers, more than 12,500 of our colleagues have made the difficult decision to leave the company permanently through early out programs or retirement.

Another 11,000 team members have offered to be on a leave of absence in October.

These are important life decisions and we respect and greatly appreciate the sacrifice these team members have made, and continue to make, for American and their fellow team members.

The pandemic has hurt airline the most

Even with those sacrifices, approximately 19,000 of our team members will be involuntarily furloughed or separated from the company on Oct. 1, unless there is an extension of the PSP…

The one possibility of avoiding these involuntary reductions on Oct. 1 is a clean extension of the PSP. Led by your labor unions, with the support of the industry, we have generated enormous bipartisan support for such an extension.

The overwhelming majority of members of both the U.S. House and Senate appreciate that saving jobs in the airline industry through this crisis will mean a quicker economic recovery in the months and years ahead.

And that preserving these essential service jobs will also mean continued commercial air service to all communities, small and large. But, despite this broad bipartisan support, a PSP extension is tied up in a larger COVID-19 relief package, which our elected officials haven’t yet been able to negotiate.

So we must prepare for the possibility that our nation’s leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities.”

AAL is down $0.45 to $13.00.

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Stein Mart files for Chapter 11 bankruptcy

Stein Mart voluntarily files Chapter 11 bankruptcy protection

Stein Mart (SMRT) announced that it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida – Jacksonville Division.

Stein Mart files for bankruptcy protection

Stein Mart offers designer and name-brand fashion apparels, home decor merchandise, accessories, and shoes at everyday discount prices in the United States. As of June 3, 2020, it operated 281 stores in 30 states. The company was founded in 1908 and is headquartered in Jacksonville, Florida.

The Company has filed customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the Company’s ability to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral.

Too much savings caused Stein Mart’s demise

These motions are typical in the Chapter 11 process and the Company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.

Details on the Company’s Chapter 11 process and go-forward strategy are as follows:

The Company expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection therewith, the Company has launched a store closing and liquidation process.

The Company, however, will continue to operate its business in the ordinary course in the near term; and the Company is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property. 

SMRT last traded at $0.18.

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Gilead submits New Drug Application for Covid-19 Treatment

Gilead submits NDA to FDA for Veklury for COVID-19 treatment

Gilead Sciences (GILD) announced that it has submitted a New Drug Application to the U.S. Food and Drug Administration for  Veklury® (remdesivir), an investigational antiviral for the treatment of patients with COVID-19.

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Gilead files for NDA for Veklury

#Veklury is currently available in the U.S. under an Emergency Use Authorization for the treatment of hospitalized patients with severe COVID-19.

The filing is the final tier of the rolling NDA submission that was initiated on April 8, 2020.

The filing is supported by data from two randomized, open-label, multi-center Phase 3 clinical studies of Veklury conducted by Gilead and the Phase 3 randomized, placebo-controlled study of Veklury conducted by the National Institute of Allergy and Infectious Diseases.

These studies demonstrated that treatment with Veklury led to faster time to recovery compared with placebo and that a 5-day or 10-day treatment duration led to similar clinical improvement.

Across studies, Veklury was generally well-tolerated in both the 5-day and 10-day treatment groups, with no new safety signals identified. Veklury has been approved by multiple regulatory authorities around the world, including in the European Union and Japan.

In countries where Veklury has not been approved, including the United States, Veklury is an investigational drug and the safety and efficacy of remdesivir have not been established.

Veklury has not been approved by the U.S. Food and Drug Administration (FDA) for any use.

In the United States, the FDA granted Veklury an Emergency Use Authorization (EUA) for the treatment of hospitalized patients with severe COVID-19. This authorization is temporary and may be revoked, and it does not take the place of the formal new drug application submission, review and approval process.

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New York sues to dissolve NRA

New York Attorney General James files lawsuit to dissolve NRA

New York Attorney General Letitia James has filed a lawsuit seeking to dissolve the National Rifle Association.

According to a statement, “Attorney General James charges the organization with illegal conduct because of their diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership, awarding contracts to the financial gain of close associates and family, and appearing to dole out lucrative no-show contracts to former employees in order to buy their silence and continued loyalty.

The suit specifically charges the NRA as a whole, as well as Executive Vice-President Wayne LaPierre, former Treasurer and Chief Financial Officer Wilson “Woody” Phillips, former Chief of Staff and the Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer with failing to manage the NRA’s funds and failing to follow numerous state and federal laws, contributing to the loss of more than $64M in just three years for the NRA.

NY Attorney General Letitia James

In the complaint, Attorney General James lays out dozens of examples where the four individual defendants failed to fulfill their fiduciary duty to the NRA and used millions upon millions from NRA reserves for personal use, including trips for them and their families to the Bahamas, private jets, expensive meals, and other private travel.

In addition to shuttering the NRA’s doors, Attorney General James seeks to recoup millions in lost assets and to stop the four individual defendants from serving on the board of any not-for-profit charitable organization in the state of New York again.”

It further states that, “the NRA is alleged to have fostered a culture of noncompliance and disregard for internal controls that led to the waste and loss of millions in assets and contributed to the NRA reaching its current deteriorated financial state.

Vista Outdoor (VSTO), Stockwinners

The NRA’s internal policies were repeatedly not followed and were even blatantly ignored by senior leaders. Furthermore, the NRA board’s audit committee was negligent in its duty to ensure appropriate, competent, and judicious stewardship of assets by NRA leadership.

Specifically, the committee failed to assure standard fiscal controls, failed to respond adequately to whistleblowers, affirmatively took steps to conceal the nature and scope of whistleblower concerns from external auditors, and failed to review potential conflicts of interest for employees.

Smith & Wesson Brands (SWBI), Stockwinners

The lawsuit alleges that the four men instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA that was illegal, oppressive, and fraudulent.

They overrode and evaded internal controls to allow themselves, their families, favored board members, employees, and vendors to benefit through reimbursed expenses, related party transactions, excess compensation, side deals, and waste of charitable assets without regard to the NRA’s best interests.

Sturm, Ruger (RGR), Stockwinners

The complaint lays out numerous other instances in which LaPierre, Phillips, Powell, Frazer, and other executives and board members at the NRA abused their power and illegally diverted or facilitated the diversion of tens of millions of dollars from the NRA.

These funds were in addition to millions of dollars the four individual defendants were already receiving in grossly excessive salaries and bonuses that were not in line with the best practices and prudent standards for evaluating and determining compensation.”

Stocks to Watch

Companies in the firearm space include Sturm, Ruger (RGR), Smith & Wesson Brands (SWBI), and Vista Outdoor (VSTO).

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Fulgent Genetics shares soar on Covid-19 testing

Fulgent Genetics surges after ‘record’ Q2 results

Shares of Fulgent Genetics (FLGT) have surged during Wednesday’s session after the company reported second quarter results after the market close last night.

The company noted that it had “record” figures for quarterly revenue, billable tests, adjusted earnings, and adjusted EBITDA, as it has commercially launched several tests for COVID-19 since March 2020.

EARNINGS

In its latest report, Fulgent Genetics reported Q2 adjusted EPS of 17c on revenue of $17.3M, compared to analysts’ estimates of (5c) and $10.05M.

The company delivered 180,513 billable tests in the quarter, an increase of 1003% year-over-year, and gross margin for the quarter improved roughly eight percentage points from the previous quarter and roughly 81% year-over-year.

Commenting on the results, chairman and CEO Ming Hsieh said, “The global COVID-19 pandemic has tested who we are as a company, and now more than ever we have demonstrated that Fulgent is a technology company with a proprietary platform built for massive scale.

Our technology is the cornerstone for all facets of our business, including cloud computing, pipeline services, record management, web portal services, clinical workflow, sequencing as a service and automated lab services.

Covid-19 Test Kit

Our second quarter results illustrate how we quickly applied our technology to the needs of today, organically developing and launching multiple tests to detect COVID-19 with Emergency Use Authorization from the FDA, including an at-home test offered through Picture Genetics, our patient-initiated product.

These offerings have attracted major new customer accounts, resulting in an inflection point in our business and outlook.”

GUIDANCE:

On Fulgent’s quarterly conference call, CFO Paul Kim said that based on the “explosive” demand the company is seeing from the market and the quality of its customers, he continues to see the upward trajectory and transformation of the business continuing for the balance of 2020.

Fulgent now projects test volumes for 2020 to be over 1.3M, which translates to into over $120M in revenues. Kim added that he sees adjusted net income of $25M, or about $1.00 per share in FY20.

Analysts had expected the company to report FY20 EPS of 12c on revenue of $45.02M.

Analysts Comments:

Following the results, Piper Sandler analyst Steven Mah maintained an Overweight rating on Fulgent Genetics and raised his price target on the stock to $68 from $31.

Mah, who continues to believe COVID-19 testing is durable for the coming years, said he is encouraged by Fulgent’s early success in test volume, adding that his higher revenue estimates are due to increased COVID-19 expectations.

PRICE ACTION:

In afternoon trading, Fulgent Genetics shares are up nearly 23%, trading at $36.46.

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FDA approves Exact Sciences’ COVID-19 test

Exact Sciences receives revised EUA for COVID-19 test

A letter to Exact Sciences Laboratories (EXAS), dated August 3, posted to the site of the FDA states:

“On May 22, 2020, based on your request, the Food and Drug Administration issued a letter determining that your product met the criteria for issuance under section 564(c) of the Act to be eligible for authorization under the March 31, 2020, Emergency Use Authorization – EUA – for Molecular-based Laboratory Developed Tests for Detection of Nucleic Acid from SARS-CoV-2 for the qualitative detection of nucleic acid from SARS-CoV-2 in respiratory specimens collected from individuals suspected of COVID-19 by their healthcare provider…

On July 17, 2020, FDA received a request from you to revise the Scope of Authorization, and thus the test’s intended use as originally specified by the High Complexity LDT Umbrella EUA, to include self-collection of nasal swab specimens that are self-collected at home or in a healthcare setting by individuals using an authorized home-collection kit specified in this EUA’s authorized labeling when determined to be appropriate by a healthcare provider, and to specify that testing is limited to Exact Sciences Laboratories at two locations..

Having concluded that the criteria for issuance of this authorization under Section 564(c) of the Act are met, I am authorizing the emergency use of your product, as described in the Scope of Authorization of this letter (Section II), subject to the terms of this authorization.”

Exact Sciences is known for it’s Cologuard, colon cancer detection test

The COVID-19 test is offered through US physicians and authorized healthcare providers. The test is intended for use with patients who meet the CDC’s current guidance for evaluation of COVID-19 infection.

EXAS last traded at $92.76.

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Direct Energy sold for $3.63 billion

NRG Energy to acquire Direct Energy from Centrica for $3.63B in cash

NRG Energy (NRG) announced it has entered into a definitive agreement with UK’s Centrica (CPYYY) under which NRG will acquire Direct Energy, a North American subsidiary of Centrica PLC for $3.63B in an all-cash transaction.

NRG Energy said in a release, “The transaction builds on NRG’s status as a growing, customer-driven integrated energy provider, adding more than three million retail customers across 50 states and Canada.

NRG goes shopping

The transaction on closing is expected to generate approximately $740M in annual run-rate Adjusted EBITDA, while enhancing free cash flow strength and stability and providing earnings diversification.

With operations in all 50 U.S. states and 6 Canadian provinces, Direct Energy is one of North America’s leading retail providers of electricity, natural gas, and home and business energy-related products and services.

Centrica sells Direct Energy

For NRG, the acquisition builds on and complements its integrated model, enabling better matching of power generation with customer demand.

It also broadens NRG’s presence into states and locales where it does not currently operate, supporting NRG’s objective to diversify its business.

The combination will deliver greater efficiencies and enable continued investment in NRG’s award-winning customer service, operational best practices and reliability.

Direct Energy fetches $3.63B

With NRG’s decades of participation in electricity markets throughout the U.S., NRG has broad insights into energy market dynamics and trends to inform innovative solutions and products for the combined company’s customers.

NRG will acquire Direct Energy for $3.63B in cash, subject to a working capital adjustment. Closing for the transaction is targeted by year end 2020.”

NRG Energy, Inc. operates as an energy company in the United States. It operates through Generation and Retail segments. The company is involved in the producing, selling, and delivering electricity and related products and services to 3.7 million residential, industrial, and commercial consumers. It generates electricity using natural gas, coal, oil, solar, nuclear, and battery storage. 

Direct Energy LP is a North American retailer of energy and energy services. The company was founded in Toronto in 1986 and now has more than four million customers in Canada and the United States. 

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U.S. orders 600M doses of Covid-19 vaccine candidate for $1.95B

Pfizer, BioNTech to supply U.S. government up to 600M doses of vaccine candidate

Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced the execution of an agreement with the U.S. Department of Health and Human Services and the Department of Defense to meet the U.S. government’s Operation Warp Speed program goal to begin delivering 300 million doses of a vaccine for COVID-19 in 2021.

Pfizer to provide 600M doses of its vaccine candidate

Under the agreement, the U.S. government will receive 100 million doses of BNT162, the COVID-19 vaccine candidate jointly developed by Pfizer and BioNTech, after Pfizer successfully manufactures and obtains approval or emergency use authorization from U.S. Food and Drug Administration.

The U.S. government will pay the companies $1.95B upon the receipt of the first 100 million doses, following FDA authorization or approval. The U.S. government also can acquire up to an additional 500 million doses.

Americans will receive the vaccine for free consistent with U.S. government’s commitment for free access for COVID-19 vaccines. The BNT162 program is based on BioNTech’s proprietary mRNA technology and supported by Pfizer’s global vaccine development and manufacturing capabilities.

The BNT162 vaccine candidates are undergoing clinical studies and are not currently approved for distribution anywhere in the world. BioNTech is the market authorization holder worldwide and will hold all trademarks for the potential product.

Both collaborators are committed to developing these novel vaccines with pre-clinical and clinical data at the forefront of all their decision-making.

Covid19 vaccine path to defeat the virus

The Pfizer/BioNTech vaccine development program is evaluating at least four experimental vaccines, each of which represents a unique combination of messenger RNA format and target antigen.

On July 1st, Pfizer and BioNTech announced preliminary data from BNT162b1, the most advanced of the four mRNA formulations. The early data demonstrates that BNT162b1 is able to produce neutralizing antibodies in humans at or above the levels observed in the plasma from patients who have recovered from COVID-19, and this was shown at relatively low dose levels.

Local reactions and systemic events were dose-dependent, generally mild to moderate, and transient. No serious adverse events were reported.

On July 20th, the companies announced early positive update from German Phase 1/2 COVID-19 vaccine study, including first T Cell response data.

Recently, two of the companies’ four investigational vaccine candidates received Fast Track designation from the U.S. Food and Drug Administration.

This designation was granted based on preliminary data from Phase 1/2 studies that are currently ongoing in the United States and Germany as well as animal immunogenicity studies.

Further data from the ongoing Phase 1/2 clinical trials of the four vaccine candidates will enable the selection of a lead candidate and dose level for an anticipated large, global Phase 2b/3 safety and efficacy study that may begin as early as later this month, pending regulatory approval.

If the ongoing studies are successful, Pfizer and BioNTech expect to be ready to seek Emergency Use Authorization or some form of regulatory approval as early as October 2020.

The companies currently expect to manufacture globally up to 100 million doses by the end of 2020 and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.

In addition to engagements with governments, Pfizer and BioNTech have provided an expression of interest for possible supply to the COVAX Facility, a mechanism established by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations and World Health Organization that aims to provide governments with early access to a large portfolio of COVID-19 candidate vaccines using a range of technology platforms, produced by multiple manufacturers across the world.

PFE closed at $36.69, last traded at $38.45. BNTX closed at $91.60, it last traded at $97.60.

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Lexicon shares jump on it’s type 2 diabetes drug

Lexicon says all four Phase 3 sotagliflozin studies met primary objectives

Lexicon Pharmaceuticals (LXRX) announced topline data from four Phase 3 sotagliflozin studies in type 2 diabetes: SOTA-MONO, SOTA-SU, SOTA-GLIM and SOTA-INS.

All four Phase 3 sotagliflozin studies met their primary objectives of lowering A1C in patients with type 2 diabetes.

The observed safety profile of sotagliflozin in these studies was generally consistent with that of approved SGLT2 inhibitors.

Diarrhea, an event consistent with gastrointestinal SGLT1 inhibition, was generally more common on sotagliflozin than placebo, although it was not a meaningful cause of treatment discontinuation.

Genital mycotic infections were dose-related.

The absolute increase in the incidence of genital mycotic infections over placebo ranged from 0% to 3.7% in studies of the 200 mg dose and from 3.2% to 6.3% in studies of the 400 mg dose.

In one study, sotagliflozin showed less hypoglycemia than glimepiride, and in the other three studies, the incidences of hypoglycemia in patients on sotagliflozin were similar to those on placebo.

Lexicon does not intend to pursue any regulatory approvals of sotagliflozin for type 2 diabetes in the absence of a strategic partnership for the commercialization of sotagliflozin in such indication.

In the Phase 3, multicenter, randomized, double-blind, placebo-controlled SOTA-MONO study, sotagliflozin 400 mg and 200 mg as monotherapy was tested for superiority versus placebo in reducing A1C after 26 weeks of treatment in patients with type 2 diabetes and inadequate glycemic control.

The study enrolled 142 patients on sotagliflozin 400 mg, 107 patients on sotagliflozin 200 mg and 150 patients on placebo. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg and 200 mg significantly reduced A1C in patients with type 2 diabetes and inadequate glycemic control on diet and exercise alone.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes, with similar incidences of hypoglycemia on sotagliflozin and placebo.

SOTA-SU was a 507-patient, randomized, double-blind, placebo-controlled, parallel group, multicenter Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg added to a sulfonylurea, alone or in combination with metformin, in patients with type 2 diabetes who had inadequate glycemic control on a sulfonylurea or metformin alone.

The primary endpoint was the change in A1C from baseline to Week 26. Patients were followed for a total of 79 weeks. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg significantly reduced A1C in patients with type 2 diabetes who were on sulfonylurea alone or in combination with metformin with inadequate glycemic control on a sulfonylurea or metformin alone at Week 26.

Importantly, A1C reduction persisted through 79 weeks. Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes.

Mean estimated glomerular filtration rate was estimated at Week 79, and was similar for sotagliflozin and placebo. Despite the presence of sulfonylurea background therapy, the incidences of hypoglycemia were similar on sotagliflozin and placebo.

SOTA-GLIM was a 954-patient, randomized, double-blind, double-dummy, active- and placebo-controlled, parallel group, multicenter Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg compared to glimepiride or placebo added to metformin in patients with type 2 diabetes who had inadequate glycemic control with metformin therapy.

The primary objective of the study was to demonstrate the non-inferiority of sotagliflozin 400 mg compared to glimepiride on A1C at Week 52.

Patients were followed for a total of 52 weeks. The study met its primary objective, as the change from baseline in A1C reduction to Week 52 was the same on sotagliflozin 400 mg and glimepiride, and the 95% confidence interval excluded the pre-specified margin of non-inferiority.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes, with less hypoglycemia on sotagliflozin than glimepiride. SOTA-INS was a 571-patient, randomized, double-blind, placebo-controlled, parallel group, multicenter, 52-week Phase 3 study that evaluated the efficacy and safety of sotagliflozin 400 mg and 200 mg or placebo in patients with type 2 diabetes who had inadequate glycemic control on basal insulin alone or in addition to oral antidiabetic agents.

The primary endpoint was a change in A1C from baseline to Week 18. Patients were followed for a total of 52 weeks. The study met its primary endpoint, demonstrating that sotagliflozin 400 mg and 200 mg significantly reduced A1C in patients with type 2 diabetes who had inadequate glycemic control on basal insulin alone or in addition to oral antidiabetic agents.

Importantly, A1C reduction persisted at the same magnitude at 52 weeks.

Safety results were similar to those in other studies of sotagliflozin in type 2 diabetes. Despite the presence of background insulin therapy, the incidences of hypoglycemia were similar on sotagliflozin and placebo.

LXRX closed at $2.10, last traded at $3.25.

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IMV shares jump on it’s potential COVID-19 vaccine

IMV Inc. provides update on progress of COVID-19 vaccine program

IMV Inc. (IMV) provided further details on the company’s progress in developing its candidate vaccine to prevent COVID-19 infection in response to the global health threat posed by the novel coronavirus.

The company said, “We are working closely with regulatory agencies and our collaborators to initiate clinical studies as quickly as possible.

IMV updates it’s progress on Covid-19

The design of the phase 1 clinical study, agreed with Health Canada, is a randomized controlled study, assessing the safety and immunogenicity of DPX-COVID-19, in 84 healthy adults across two age cohorts: (1) adults between 18-55 years old inclusive and (2) 56 and above. Two dose levels of DPX-COVID-19 will be tested (25 undefined or 50 undefined).

We are pleased that Health Canada has welcomed the design of a phase 1 trial that includes this vulnerable population.

The rapid progress in target selection, the vaccine formulation, manufacturing and preclinical results so far not only demonstrate the potential of our delivery platform, but also build on our previously reported clinical data from a similarly designed vaccine against RSV, the respiratory syncytial virus.

Clinical results have shown our DPX-based vaccine against RSV demonstrated a unique ability to generate safe and long-lasting immune responses in older adults.

IMV’s candidate vaccine, DPX-COVID-19, is based on IMV’s first-in-class delivery platform that generates targeted and sustained immune response in vivo.

Fully synthetic, the vaccine candidate is designed to focus the immune response on the weaknesses of the virus with the goal to optimize safety and efficacy: DPX-COVID-19 is a formulation of the DPX delivery platform with four complementary peptide antigens that were selected for their high immunogenicity and ability to bind non-overlapping areas on the virus spike and impact its infective function in preclinical studies, Importantly, our selected targets are located outside of the 614 mutation which, according to recent research, has been demonstrated to increase the virus’ ability to infect cells in vitro and suggested to potentially reduce vaccine-induced immunity.

We believe our vaccine candidate would retain its potential efficacy independently from current/future mutations of the virus at this site, Areas on the virus spike identified as potentially responsible for vaccine-enhanced disease4 have been excluded from our target selection to minimize safety risk.

Since the Company announced the selection of its candidate vaccine on May 21st, the Company has made significant progress.

Preclinical studies have demonstrated the capacity of DPX-COVID-19 to induce strong immunogenicity including the binding on target to the spike protein and viral neutralization, The Company has completed the current good manufacturing practice (“cGMP”) formulation and manufacturing process development for DPX-COVID-19, and Multiple batches have been successfully produced at IMV.”

IMV closed at $3.00, last traded at $7.00.

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NanoViricides shares jump on it’s potential Covid-19 drug

NanoViricides announces safety results from drug candidates against SARS-CoV-2

NanoViricides (NNVC) announced that safety and tolerability of the drug candidates it is developing against SARS-CoV-2 to treat COVID-19 spectrum of diseases was observed in an animal model.

The company said the nanoviricides drug candidates tested in this safety/tolerability study have previously shown strong effectiveness against lung infection by a SARS-CoV-2 like coronavirus, namely, hCoV-NL63, in an animal study as previously reported by the company.

Three different drug candidates at three different dosage levels and vehicle control were administered to separate groups of mice intravenously in the Safety-Tolerability study.

Clinical observations and gross post-mortem studies have been completed.

The tested drug candidates were safe and well tolerated, thereby clearing the path for further development towards a treatment for SARS-CoV-2 infection that has caused the current COVID-19 pandemic.

Nanoviricides are designed to act by a novel mechanism of action, trapping the virus particle.

Antibodies, in contrast, only label the virus for other components of the immune system to take care of. It is well known that the immune system is not functioning properly at least in severe COVID-19 patients.

Additionally, it is well known that viruses escape antibody-drugs via mutations.

The company’s “nanoviricide” drug candidates, in contrast, are designed to be broad-spectrum, and therefore virus escape by mutations is expected to be unlikely.

In this Safety/Tolerability Study, there were no clinical signs of immune or allergic reactions such as itching, biting, twitching, rough coat, etc.

Further, there were no observable changes in any organs including large intestine or colon on post mortem in gross histology. The only reportable changes observed were, in the high dosage groups of two of the three drug candidates tested, associated with the non-absorption of water, in the colon.

This is consistent with the clinical observation of very loosened stools in the same groups. In clinical usage, the drug candidates are not anticipated to be administered in such high levels. The objective of this study was to discover the dosage level at which such an effect may occur.

Sixteen mice in each group were administered one of the three drug candidates at one of the three dose levels, and additionally, one group was administered vehicle control, for seven days by daily tail-vein intravenous infusion in this blinded study with additional evaluations on eighth day.

This non-GLP safety/tolerability study was conducted under GLP-like conditions.

The company believes that loose or very loose stools at very high dosages in such a study is an expected and acceptable side effect of the polyethylene glycol, or PEG, moiety, which forms the backbone of the nanoviricides drug candidates.

PEG is used prior to colonoscopy in humans to promote loose stools and internal cleaning of the intestines, by causing non-absorption of water.

The company has previously reported that these drug candidates have shown strong effectiveness in a lethal lung infection model in rats using a coronavirus that uses the same ACE2 receptor as SARS-CoV-2 which causes COVID-19, namely hCoV-NL63.

The company has found that hCoV-NL63, which causes a milder disease than SARS-CoV-2, causes substantially similar clinical pathology in this efficacy animal model as has been reported for SARS-CoV-2 associated lung infections in humans. In this previously reported lethal direct-lung-infection model efficacy study, animals in all groups developed lung disease which later led to multi-organ failures, a clinical pathology resembling that of the SARS-CoV-2.

Reduction in loss of body weight at day seven was used as the primary indicator of drug effectiveness. Rats were infected directly into lungs with lethal amounts of hCoV-NL63 virus particles and then different groups were treated separately with five different nanoviricides drug candidates, remdesivir as a positive control, and the vehicle as a negative control.

The treatment was intravenous by tail-vein injection once daily for five days, except in the case of remdesivir wherein it was by tail-vein injection twice daily. In this efficacy study, animals treated with the five different nanoviricides showed significantly reduced body weight loss.

The body weight loss in female animals ranged from only 3.9% to 11.2% in the different nanoviricide-treated groups, as compared to 20% in vehicle-treated control group, and 15.2% in a remdesivir-treated group. The body weight loss in male animals ranged from 8% to 10.9% in the different nanoviricides-treated groups, as compared to 25% in the vehicle-treated control group, and 18.6% in remdesivir-treated group.

Smaller numbers mean less loss in body weight compared to starting body weight in the group, and indicate greater drug effectiveness.

The effectiveness of nanoviricide drug candidates in the lung-infection model is consistent with the effectiveness observed in cell culture studies against infection of both hCoV-NL63, which was used in the efficacy study, and hCoV-229E, another circulating coronavirus that uses a distinctly different receptor, namely APN. Prior to filing for human clinical trials,

NanoViricides plans on requesting a pre-IND Meeting with the FDA for regulatory guidance.

NNVC is up $2.04 to $8.97.

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National General sold for $4 billion

Allstate to acquire National General for $34.50 per share, in cash

Allstate (ALL) has agreed to acquire National General (NGHC) for approximately $4B in cash, or $34.50 per share.

The companies said in a release, “The transaction is expected to close in early 2021, subject to regulatory approvals and other customary closing conditions.

National General sold for $4B

National General provides a wide range of property-liability products through independent agents with a significant presence in non-standard auto insurance.

The company also has attractive Accident and Health and Lender-Placed Insurance businesses.

Gross premiums written were $5.6 billion, which generated operating income of $319 million in 2019.

National General shareholders will receive $32.00 per share in cash from Allstate, plus closing dividends expected to be $2.50 per share, providing $34.50 in total value per share.

Allstate will fund the share purchase by deploying $2.2 billion in combined cash resources and, subject to market conditions, issuing $1.5 billion of new senior debt.

Allstate expects to maintain its current share repurchase program.

National General’s board of directors has approved the transaction, which includes customary terms and conditions, including a breakup fee of $132.5 million.

A voting agreement has also been signed with entities controlling 40% of National General’s common shares to vote for the transaction.

MSD Capital, which owns approximately 7.4% of National General’s outstanding common shares, also supports the transaction.

NGHC closed at $20.41.

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