Sangamo signs deal with Novartis, shares jump

Sangamo executes global licensing agreement with Novartis for genomic medicines

Sangamo (SGMO) announced that it has executed a global licensing collaboration agreement with Novartis (NVS) to develop and commercialize gene regulation therapies to address three neurodevelopmental targets, including autism spectrum disorder, or ASD, and other neurodevelopmental disorders.

Sangamo signs distribution agreement with Novartis

The collaboration will leverage Sangamo’s propriety genome regulation technology, zinc finger protein transcription factors, or ZFP-TFs, to aim to upregulate the expression of key genes involved in neurodevelopmental disorders.

Zinc-finger protein transcription factors (ZFP TFs) can be designed to control the expression of any desired target gene, and thus provide potential therapeutic tools for the study and treatment of disease. 

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis to use Sangamo to expand its markets

The collaboration will leverage ZFP-TFs engineered by Sangamo scientists in an effort to upregulate, or activate, the expression of genes that are inadequately expressed in individuals with certain types of neurodevelopmental disorders.

Under the terms of the agreement, over a three-year collaboration period, Novartis has exclusive rights to ZFP-TFs targeted to three undisclosed genes which are associated with neurodevelopmental disorders, including ASD and intellectual disability.

Novartis also has the option to license Sangamo’s proprietary AAVs.

Sangamo’s proprietary AAVs

Sangamo is responsible for certain research and associated manufacturing activities, all of which will be funded by Novartis, and Novartis assumes responsibility for additional research activities, investigational new drug-enabling studies, clinical development, related regulatory interactions, manufacturing and global commercialization.

Under the collaboration agreement, Novartis will pay Sangamo a $75 million upfront license fee payment within thirty days.

In addition, Sangamo is eligible to earn up to $720 million in other development and commercial milestone payments, including up to $420 million in development milestones and up to $300 million in commercial milestones.

Sangamo is also eligible to receive from Novartis tiered high single-digit to sub-teen double-digit royalties on potential net commercial sales of products arising from the collaboration.

SGMO is up 15% to $11.40. NVS is down 22 cents to $84.19.

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Zantac causes cancer says FDA

FDA calls for removal of Zantac from the market

The U.S. Food and Drug Administration announced it is requesting manufacturers withdraw all prescription and over-the-counter ranitidine drugs from the market immediately.

This is the latest step in an ongoing investigation of a contaminant known as N-Nitrosodimethylamine, or NDMA, in ranitidine medications, commonly known by the brand name Zantac.

FDA says Zantac causes cancer; orders product removal

The agency has determined that the impurity in some ranitidine products increases over time and when stored at higher than room temperatures and may result in consumer exposure to unacceptable levels of this impurity.

As a result of this immediate market withdrawal request, ranitidine products will not be available for new or existing prescriptions or OTC use in the U.S. NDMA is a probable human carcinogen.

In the summer of 2019, the FDA became aware of independent laboratory testing that found NDMA in ranitidine.

Low levels of NDMA are commonly ingested in the diet, for example NDMA is present in foods and in water. These low levels would not be expected to lead to an increase in the risk of cancer.

However, sustained higher levels of exposure may increase the risk of cancer in humans.

The FDA conducted thorough laboratory tests and found NDMA in ranitidine at low levels.

Ranitidine causes cancer, Stockwinners

At the time, the agency did not have enough scientific evidence to recommend whether individuals should continue or stop taking ranitidine medicines, and continued its investigation and warned the public in September 2019 of the potential risks and to consider alternative OTC and prescription treatments.

New FDA testing and evaluation prompted by information from third-party laboratories confirmed that NDMA levels increase in ranitidine even under normal storage conditions, and NDMA has been found to increase significantly in samples stored at higher temperatures, including temperatures the product may be exposed to during distribution and handling by consumers.

The testing also showed that the older a ranitidine product is, or the longer the length of time since it was manufactured, the greater the level of NDMA.

These conditions may raise the level of NDMA in the ranitidine product above the acceptable daily intake limit.

With today’s announcement, the FDA is sending letters to all manufacturers of ranitidine requesting they withdraw their products from the market.

The FDA is also advising consumers taking OTC ranitidine to stop taking any tablets or liquid they currently have, dispose of them properly and not buy more; for those who wish to continue treating their condition, they should consider using other approved OTC products.

FDA orders removal of Zantac, Stockwinners

Patients taking prescription ranitidine should speak with their health care professional about other treatment options before stopping the medicine, as there are multiple drugs approved for the same or similar uses as ranitidine that do not carry the same risks from NDMA.

To date, the FDA’s testing has not found NDMA in famotidine (Pepcid), cimetidine (Tagamet), esomeprazole (Nexium), lansoprazole (Prevacid) or omeprazole (Prilosec). Zantac is marketed and sold by Sanofi (SNY).

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The Medicines Co. sold for $9.7B

Novartis to pay $85 per share in cash for each MDCO share

The Medicines Company (MDCO) announced that it has entered into definitive agreement in which Novartis (NVS) will acquire the company for $85 per share in an all-cash transaction, implying a fully diluted equity value of $9.7B.

Novartis to pay $85 per share in cash for each MDCO share, Stockwinners

The stock closed Friday down $1.21 to $68.55. See our previous blog post.

The purchase price represents a premium of approximately 45% to The Medicines Company’s closing share price of $58.65 on November 18, the last trading day prior to news reports of a potential transaction between The Medicines Company and Novartis.

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis to pay $85 per share in cash for each MDCO share, Stockwinners , Stockwinners

The transaction was unanimously approved by the boards of both companies. Under the terms of the merger agreement, Novartis will commence a tender offer to purchase all outstanding shares of The Medicines Company for $85 per share in cash.

Following the completion of the tender offer, a wholly owned subsidiary of Novartis will merge with The Medicines Company and shares of The Medicines Company that have not been tendered and purchased in the tender offer will be converted into the right to receive the same price per share.

Completion of the transaction is expected in Q1 of 2020, pending the successful completion of the tender offer and other customary closing conditions.

Until that time, The Medicines Company will continue to operate as a separate and independent company. The company expects to file regulatory submissions for inclisiran in the U.S. in Q4 of 2019 and in Europe in the first quarter of 2020.

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Medicines Co. is in play

Novartis holds talks about potential acquisition of Medicines Co

Medicines Co. (MDCO) has attracted takeover interest from companies including Novartis (NVS), which has been holding talks about a potential acquisition of the New Jersey-based company, Bloomberg’s Ed Hammond, Nabila Ahmed and Dinesh Nair report, citing people familiar with the matter.

Novartis is eyeing Medicines Co., Stockwinners

According to the people, Novartis is conducting due diligence on Medicines Co. Other potential acquirers have also expressed interest in buying Medicines Co., they add.

Novartis is looking for products to replace its out of patent products, Stockwinners

The Medicines Company focuses on developing therapeutics for the treatment of therosclerotic cardiovascular disease. The company is developing Inclisiran, an investigational RNA interference therapeutic that inhibits production of proprotein convertase subtilisin/kexin type 9, which controls LDL-cholesterol levels.

Novartis has historically had a strong cardiovascular drug franchise, but lost ground when Diovan, once a $6 billion-per-year seller, lost patent protection in 2012 and left the company without an immediate, innovative follow-up product.

Novartis Chief Executive Officer Vas Narasimhan has relied on deals to sharpen the company’s focus on innovative drugs for cancer and rare diseases. The Basel, Switzerland-based company has announced close to $16 billion of acquisitions since he took over as CEO in February 2018, according to data compiled by Bloomberg. He has also spun off the Alcon Inc. eye-care division and ditched a stake in a consumer-health venture.

Baird’s Comments

Baird analyst Madhu Kumar said he has utter conviction that The Medicine’s Co. inclisiran can disrupt cholesterol therapy. The analyst cited its results from the ORION-9/10/11 trial which was released and supported his thesis. He said the remaining question is whether the company can find an acquirer or partner to help launch inclisiran.

Kumar reiterated his Outperform rating and $100 price target on The Medicine’s Co. shares.

JPMorgan’s Take

JPMorgan analyst Jessica Fye noted that Bloomberg is reporting that Novartis (NVS) and other potential acquirers have expressed interest in buying The Medicines Company (MDCO), adding that her talks with investors indicate that Novartis is viewed as the most likely buyer.

She further notes that Medicines Co. shares were trading above her standalone valuation at yesterday’s close, which she attributes to some anticipation of a deal, and that today’s move puts the stock in a price range greater than 40% above her standalone target.

Outside of Novartis, Fye also believes an acquirer could be a less expected company, but if only one company is interested they could try to “wait it out” to the point where investors might begin to worry that Medicines could have to take on the substantial inclisiran launch investment independently. However, if multiple players are interested, as Bloomberg suggests, she thinks “competitive tension” could lead to a near-term acquisition.

MDCO is up $12.35 to $71.00.

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Incyte to present at ASCO meeting in Chicago

Incyte announces abstracts featuring genomic profiling data for ASCO

Incyte Corp. (INCY) announces that multiple abstracts highlighting data from its oncology portfolio will be presented at the upcoming 2019 American Society of Clinical Oncology Annual Meeting, to be held from May 31-June 4, in Chicago, Illinois; and the 24th Congress of the European Hematology Association, to be held June 13-16, in Amsterdam, the Netherlands.

Abstracts accepted for presentation at ASCO feature genomic profiling data from Incyte’s ongoing Phase 2 FIGHT-202 trial evaluating its selective fibroblast growth factor receptor inhibitor, pemigatinib, in patients with cholangiocarcinoma, as well as efficacy and safety data from the Novartis-sponsored GEOMETRY mono-1 trial of capmatinib, the investigational selective MET inhibitor licensed to Novartis (NVS) by Incyte.

Additionally, data to be presented at EHA will showcase the continued study of Incyte’s JAK1/JAK2 inhibitor, #ruxolitinib, in myeloproliferative neoplasms.

“Our presence at ASCO and EHA illustrates Incyte’s ongoing commitment to discovering and developing therapeutic options that address significant unmet medical needs for patients,” said Steven Stein, M.D., Chief Medical Officer, Incyte.

ASCO’s annual meeting is May 31-June 4 in Chicago, Stockwinners

“We are pleased to highlight new data on two investigational medicines – pemigatinib and capmatinib – that were discovered by Incyte scientists and for which we anticipate applications for initial U.S. regulatory approvals later this year, as well as data that furthers our understanding of the treatment of MPNs.”

Incyte Corporation focuses on the discovery, development, and commercialization of various therapeutics in the United States. The company offers JAKAFI, a drug for the treatment of myelofibrosis and polycythemia vera cancers; and Iclusig, a kinase inhibitor to treat chronic myeloid leukemia and philadelphia-chromosome positive acute lymphoblastic leukemia.

Its clinical stage products include ruxolitinib, a drug in Phase III clinical trial for steroid-refractory acute graft-versus-host-diseases (GVHD); and Phase II trial for the treatment of essential thrombocythemia and refractory myelofibrosis.

In addition, the company engages in the development of itacitinib, which is in Phase III clinical trial to treat naïve acute and chronic GVHD, as well as Phase I/II clinical trial in combination with osimertinib for non-small cell lung cancer (NSCLC); and pemigatinib that is in Phase II clinical trial for treating bladder cancer, cholangiocarcinoma, and 8p11 myeloproliferative syndrome, as well as a pivotal program for solid tumors with driver activations of FGF/FGFR.

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