Companies discussed: Biogen Inc (NASDAQ:BIIB), Sarepta Therapeutics Inc (NASDAQ:SRPT), Catabasis Pharmaceuticals Inc (NASDAQ:CATB)
Biogen
First up, Biogen Inc (NASDAQ:BIIB). Biogen is a little larger than our normal focus range market capitalization here at Small Cap Exclusive, but it’s making waves in the biotech space on the back of some trial data, and these waves could impact sentiment further down the scale. A such, it’s worth taking a quick look at.
The action comes on the back of some data relating to a phase 2 trial of the company’s investigative multiple sclerosis candidate, opicinumab. Essentially, the data showed that the drug has no real clinical advantage over the current standard of care treatment in the space, and missed both its primary and secondary endpoints in the just finished trial. Biogen is down nearly 10% on the announcement, and is poised to drop the drug, cut its losses and move on. Well, not exactly. The company reported that it has spotted something in the data that hints at what it calls a dose related anomaly – something that apparently warrants further investigation. For a drug that missed both its endpoints, this seems to be a bit of a stretch. There’s every chance Biogen PR are trying to limit the market hit by implying the trial wasn’t a total waste of capital. There’s also the chance, of course, that the company will spend more money on this anomalous investigation, and still draw nothing of use. Time will tell.
Sarepta
Next, lets look at Sarepta Therapeutics Inc (NASDAQ:SRPT). This company has gone back and forth with the FDA for what seems like a lifetime, and tanked last week as the FDA announced some fresh regulations for investigative drugs. The candidate in question, Eteplirsen, is a DMD drug that – in the eyes of a large amount of people – the agency should approve on a purely compassionate basis. There’s no currently available treatment, and patients and their families are pushing hard for an agency nod. We’ve not got any insight as to the chance of this nod as yet, but Sarepta released a statement yesterday that has boosted hoped (and in turn, the company’s market capitalization. It read as follows:
“(the FDA wants us to) provide dystrophin data, as measured by western blot, from biopsies already obtained from the ongoing confirmatory study of eteplirsen (PROMOVI), as part of its ongoing evaluation of the eteplirsen New Drug Application (NDA). The Company plans to submit data from thirteen patient biopsy samples, at baseline and Week 48, to the FDA over the coming weeks to facilitate a prompt decision on the NDA by the Agency.”
Sarepta is up nearly 25% on this announcement alone, which shows the potential for gains come FDA decision day. We’re looking to a mid-Q3 final ruling.
Catabasis
Finally, Catabasis Pharmaceuticals Inc (NASDAQ:CATB). This development stage biotech company is developing two primary candidates in tandem – CAT-1004 for DMD and CAT-2054 for hypercholesterolemia. On Monday, post market close, Catabasis lost more than 27% of its market capitalization, having already taken a 4% loss during the active US session. Why this 31% decline? Well, the above mentioned 2054 just hit topline, and pretty much missed across the board from an endpoint perspective.
The drug was in a phase IIa to investigate a supposed inhibitory property, that suggested it could inhibit what’s called sterol regulatory element-binding protein (SREBP). SREBP regulates lipid metabolism, and as such, is a key player n cholesterol level and control. In this instance, however, there was no sign of efficacy, and it looks lie Catabasis will be writing off the drug entirely.
It’s now a one drug company, with a pure focus (medium to late stage) on DMD. With just $23 million cash on hand at last count, it’s a very risky allocation as things stand. One to watch purely based on the fact that DMD is such a hot topic right now, but err on the side of caution.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.
