3 High-Risk Biotechs That Could Pop or Drop in 2018


Small biotech companies, particularly if they have limited pipelines, are often win-or-lose based on a single clinical trial decision. Todd Campbell, writing for The Motley Fool, looks at three biotech companies that face make-or-break catalysts this year.

1. Summit Therapeutics

Based in Abingdon, UK, Summit focuses on rare diseases and infectious diseases. On Jan. 25, the company released 24-week interim data from its Phase II clinical trial of ezutromid in Duchenne muscular dystrophy (DMD). At this time, the only approved drug for DMD is Exondys 51, which only treats about 13 percent of DMD patients and there are questions as to its efficacy. Ezutromid boosts production of utrophin, a protein that builds muscle in a way similar to dystrophin, which is what Exondys attempts to fix.

The interim data showed a significant reduction in muscle damage and an increase in utrophin expression. Final data is expected in the third quarter of this year. Campbell writes, “While ezutromid has the potential to be a nine-figure drug, investors might want to keep some of their optimism in check. After all, Exondys 51’s approval was far from a lock, and it remains to be seen how regulators might view an increase utrophin production as a surrogate endpoint worthy of approval.”

2. Jounce Therapeutics

Headquartered in Cambridge, Massachusetts, Jounce is an immuno-oncology company. Jounce’s lead product is JTX-2011, a monoclonal antibody that stimulates the inducible T-cell co-stimulator (ICOS) protein on T-cells. It has the potential to make PD-1 inhibitors more potent. It is being evaluated with Bristol-Myers Squibb’s Opdivo, as well as being evaluated as a monotherapy. Campbell writes, “In total, these trials are evaluating JTX-2011 across six different solid tumor types, including non-small-cell lung cancer. The ability to treat multiple tumor types is particularly intriguing because it suggests that if JTX-2011’s trials are positive, it could win widespread use.”

JTX-2011 was licensed to Celgene in 2016, which if it makes it market, will have a Jounce-Celgene split of 60/40. Jounce also could receive up to $2.3 billion in development and sales milestones.

Campbell also notes that because Celgene already owns 2.8 million shares of Jounce stock, if the data readout is positive, Celgene may consider an acquisition to be a smart move.

3. TG Therapeutics

Located in New York City, TG Therapeutics focuses on developing treatments for B-cell cancers and autoimmune diseases. It is developing two products, ublituximab (TG-1101) for B-cell blood cancers and autoimmune diseases, and umbralisib (TGR01292) for various hematologic malignancies.

On Feb. 2, 2018, the company reported results from the Phase II clinical trial of TG-1101 in relapsing forms of multiple sclerosis (RMS). “We are very pleased with the updated Phase II data presented last night which now includes five cohorts, totaling 40 patients,” said Michael Weiss, the company’s executive chairman and chief executive officer, in a statement. “It’s exciting to see that with more patients through six months of treatment, the data remain consistent with the earlier results presented at the 2017 ECTRIMS-ACTRIMS meeting. The data continue to demonstrate the positive effects of ublituximab with sustained B-cell depletion through Week 24, complete elimination of T1 Gd-enhancing lesions and 97.5 percent of subjects without a relapse at Week 24. Importantly, the 1-hour infusion appears to be well tolerated and could represent a more convenient alternative to the currently marketed anti-CD20 monoclonal antibody.”

In addition, TG is evaluating ublituximab with Johnson & Johnson’s Imbruvica in chronic lymphocytic leukemia (CLL). If the trial has positive results, it can file for approval in the third quarter of this year. It also has a Phase III trial of ublituximab in combination with umbralisib in refractory CLL. “The two-drug combination, dubbed ‘U2,’ is competing head-to-head against (Genentech’s) Gazyva and chlorambucil, a chemotherapy,” Campbell writes. “If U2 outperforms the Gazyva arm, then TG Therapeutics hopes to ask for an accelerated approval by the end of 2018. Gazyva sales were approximately $73 million last quarter, at current exchange rates, so an approval could be profit-friendly.”

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