DELTA CONTINUES TO RAMPAGE WORLD, WHO ASKS FOR BOOSTER MORATORIUM, STATE DEPT./CDC ISSUE TRAVEL WARNINGS, DELTA ACCOUNTS FOR 93% IN U.S, EU BUYS 200 MILLION NOVAVAX DOSES

The World Health Organization called on Wednesday for a moratorium on coronavirus vaccine booster shots until the end of September, so that vaccine supplies can be focused on helping all countries vaccinate at least 10 percent of their populations. The agency made its appeal to the world’s wealthiest nations to address the wide disparities in vaccination rates around the world.

The U.S. State Department has listed the following countries and advised against traveling to them because of COVID-19; Andorra, Lesotho, Greece, Ireland, Malta, Kazakhstan, Curacao, French West Indies, Iran, Libya, the Marshall Islands, Syria and the Democratic Republic of Congo.   The State Department issues a travel advisory for each country around the world and countries are given a ranking in four categories, including “exercise normal precautions,” “exercise increased caution,” “reconsider travel” and “do not travel.”   The Centers for Disease Control and Prevention also issues travel advisories. There are currently 70 countries — about 35% of the world — it recommends avoiding traveling to because of COVID-19. If you must travel to any of the listed countries, the CDC recommends you get vaccinated first.

The latest data from the CDC shows that the DELTA variant accounts for at least 93% of all sequenced coronavirus in the U.S.  For the two-week period ending July 31, all the different lineages of the DELTA variant made up an estimated 93% of cases that were sequenced. In some parts of the country with low vaccination rates, especially the Midwest region that includes Kansas, Iowa and Missouri, the percentages are even higher. Vaccination rates remain uneven across the U.S. with only about half of all eligible people nationwide fully vaccinated.

CDC Leak is Good & Bad News

The good news is the CDC report says that vaccinated individuals have a 25-fold reduction in risk of hospitalization or death compared to unvaccinated individuals, as well as an eight-fold reduction in disease, which translates to approximately 88% vaccine effectiveness against symptomatic infection. The bad news is the report stated the delta variant is more transmissible than MERS, SARS, Ebola, the common cold, the seasonal flu and smallpox.  Another negative is that the variant is more likely to break through vaccine protection than other strains.

Daily Trends in COVID-19 Cases in the United States Reported to CDC

The European Commission has approved a supply contract with Novavax for the purchase of up to 200 million of its potential COVID-19 vaccine.  Under the contract, EU states will be able to buy up to 100 million doses of the Novavax vaccine, with an option for 100 million additional doses until 2023, once the shot has been approved by the EU which is currently reviewing it.

White House Focuses on Life Sciences and Health

In a major departure from previous administrations, the White House Office of Science and Technology Policy — under the leadership of Eric Lander — will have an entire wing focused on life sciences and health. Other White House science offices have had heavy investments in physics, energy policy, and national security — in a reflection of the topics that were most important in the 1970s when the office was first created. In building the new wing, Lander and the Biden administration are signaling a broader push for high-risk, high-reward biomedical research. Lander has already begun poaching top scientists from other government agencies, including the NIH’s associate director of science policy, Carrie Wolinetz.

Acquisitions

Amgen said that it will pay up to $1.6 billion to buy TeneoBio, a privately held biotechnology company that specializes in developing bispecific antibodies which have the capacity to go after two targets with one antibody.  Amgen is paying $900 million upfront, though potential milestone payments could push the deal’s value up to $1.6 billion. TeneoBio is developing antibody technologies that include one therapy, currently in a Phase 1 clinical trial, aimed at treating certain forms of metastatic prostate cancer. The deal is expected to close in the second half of 2021. MTSL rec CLDX was up on the news in sympathy as they also have a bispecific antibody platform.

Sanofi is acquiring Translate Bio for $38 per share/$3.2 billion. The purchase price represents a premium of 56% to Translate Bio’s volume-weighted average price per share over the past 60 days.  The company is a leader in the mRNA medicine space which restores protein function and is red hot after the recent success of the mRNA vaccines.

Bayer is buying Vividion Therapeutics, a private San Diego company that focuses on drug development using protein surface screening for $2 billion. Vividion only recently filed for an initial public offering (IPO), which it has decided to abandon with this acquisition. Under the terms of the agreement, Bayer is paying $1.5 billion upfront and potentially $500 million in various milestone payments.

ACAD recently reported Nuplazid sales revenue of $115.2 million compared to consensus estimates of $124.9 million for the quarter as the pandemic continues to impact a large part of the country. Although management noted new patient starts at par with the pre-pandemic level, they remarked that the starts have not accelerated as expected. Both in-person office visits and occupancy rates within the long-term care channel have receded as the pandemic continues to be disruptive to patient visits.  Importantly, ACAD confirmed that it completed its Type A meeting with the FDA regarding the recent complete response letter (CRL) for Nuplazid in dementia-related psychosis.

ACAD noted that the FDA found ACAD’s presentation of new analyses (reviewing the clinical characteristics and features of psychosis among various dementia subtypes and demonstrating the similar clinical benefit observed across patients in the different subgroups) to be of interest and expressed a willingness to continue the discussion in a subsequent meeting. ACAD expects to meet with the agency later this year post compiling a briefing document (for a Type A, B, or C meeting), and management outlined three potential outcomes that could emerge post further discussion and additional analysis/review of the data.

The FDA has granted Fast Track designation to ALKS’ nemvaleukin alfa (nemvaleukin), the company’s novel, investigational engineered interleukin-2 (IL-2) variant immunotherapy, for the treatment of mucosal melanoma. Earlier this year, the FDA also granted orphan drug designation to nemvaleukin for the treatment of mucosal melanoma. The company recently initiated enrollment in ARTISTRY-6, a global Phase II trial evaluating the anti-tumor activity, safety and tolerability of nemvaleukin monotherapy in patients with melanoma who have been previously treated with anti-PD-(L)1 therapy. The study is evaluating intravenously administered nemvaleukin in patients with mucosal melanoma and subcutaneously administered nemvaleukin in patients with advanced cutaneous melanoma.  Nema has yet to be included in any Wall Street models and any good Phase II data will serve as a strong catalyst with fast track and orphan drug status both having been granted by the FDA.

Vivitrol sales were a surprise and have resumed to pre-COVID-19 levels.  The primary Vivitrol driver has been the expanded use in alcohol dependent patinest along with better patient access and an improving net price.  Looking ahead management expects Vivitrol alcohol dependence sales to increase in 2H21.

ESPR reported 2Q21 earnings with US net product revenue coming in at $10.6 million (+67% QoQ) just below the consensus estimate of $10.9 million. As prescriptions grew 28% QoQ, management highlighted that adjustments have been made to patient assistance programs to help improve net pricing with limited impact on patient access.  In our view, net pricing improvements will continue as well as positive trends for prescription volumes as the company shifts Nexletol/Nexlizet positioning and pushes formulary adoption further. The company also reported $1 million in royalty revenue from European commercial partner Daiichi Sankyo. We continue to look to the CLEAR outcomes trial as a huge factor for prescriber uptake.  Speaking of CLEAR, ESPR stated that 75% of MACE events have thus far accumulated and the read out remains on track for 2H22.  In our view, CLEAR will be positive and serve as a monster catalyst next year.

Rx demand during the quarter was up 28% from 1Q21, with >47,800 cumulative patients filling a script as of June 30. ESPR highlighted that the substantial improvement in net price in 2Q was driven by adjustments to both the duration and buy-down magnitude of the copay card program. Importantly, commercial and Medicare Part D coverage now stand at 95% and 60%, respectively, and the prescriber base is split roughly 60:40 primary care versus cardiologists.

MDGL is confidently preparing for the upcoming U.S. launch of resmetirom for both NAFLD and NASH.  The company is building out its commercial resources and infrastructure, as well as developing a comprehensive product launch plan to position resmetirom for success. To date, MDGL’s market research projects have involved over 1,000 hepatologists, gastroenterologists and endocrinologists as well as payers who together provide prescription coverage for the vast majority of the patients in the U.S. Results from these efforts confirm that (i) NASH patients with significant liver fibrosis (F2/F3) are already being non-invasively identified by physicians, but given the lack of approved treatment options they are looking for effective new medications to manage the disease; and, (ii) the majority of these physicians believe an ideal therapy for NASH patients with significant fibrosis which addresses the underlying pathophysiology of the disease in the liver will slow, halt and/or reverse disease progression.  In our view, MDGL’s management team is positioning resmetirom to become a billion dollar drug as the best in class treatment for both NAFLD and NASH.

Robert Waltermire is a key hire as the newly appointed Chief Pharmaceutical Development Officer of Madrigal within Research and Development with responsibility for all aspects of chemistry, manufacturing and controls (CMC) and commercial product supply.  With over 30 years of experience in pharmaceutical development, Rob brings proven expertise in all aspects of chemistry, manufacturing and control (CMC) as well as experience in manufacturing new commercial products,” stated Becky Taub, M.D., President R&D and CMO of Madrigal.

Our newest recommendation has hit the ground running with three new partnerships in the last three weeks as management executes flawlessly.  First PLXP announced that three stock-keeping units (“SKUs”) of VAZALORE will be available in over 8,000 Walgreens stores nationwide later in August. Walgreens has already inserted placeholders to reserve space on shelves for all three SKUs: VAZALORE 81 mg, 12 count; VAZALORE 81 mg, 30 count; and VAZALORE 325 mg, 30 count. PLXP also announced that three stock-keeping units (“SKUs”) of VAZALORE, will be available in over 2,400 Rite Aid stores later in August. The third deal announced that three stock-keeping units (“SKUs”) of VAZALORE, will be available in nearly 8,000 CVS stores later this month.  The retail price is expected to be $25 per month for VAZALORE.

On the company’s quarterly call we received more info on the imminent launch of VAZALORE which is coming this month.

Highlights of, and certain events subsequent to, the second quarter of 2021 include:

• Walmart, Walgreens, Rite Aid, and CVS among the leading retailers to reserve shelf space for all three SKUs of VAZALORE;
• Extensive distribution for VAZALORE in over 30,000 U.S. retail stores including Kroger’s and Target
• Launched specialty field force to raise awareness amongst healthcare professionals;
• Continue to inform specialists through medical conferences, publications and continuing professional education events; and
• VAZALORE launch inventory manufactured and currently shipping to retailers across the country.

VXRT has announced that the FDA has cleared their Investigational New Drug application for an S-only oral tablet SARS-CoV-2 vaccine candidate. The company intends to explore multiple S-only constructs in clinical trials alongside the S+N construct that has already completed its Phase I trial.  This decision is based on preliminary data from a current Non-Human Primate study which indicates that the S-only vaccine produced much higher serum antibodies than the one expressing both S and N proteins.  This contrasts with the Phase I results from the S+N vaccine candidate that showed remarkable T-cell responses and a mucosal antibody response, but not as strong serum antibody responses.  The Phase II clinical trial with the S-Wuhan construct is expected to start shortly.

COVID-19 Vaccine Developments

While the nation’s death and illness tolls have fallen markedly since the beginning of the last quarter, new variants such as the Delta strain continue to worry national political and health leaders. Vaxart broadened its research into the various COVID-19 strains while continuing its development of an oral tablet vaccine. Among the most significant developments in the second quarter:

• The FDA cleared Vaxart to move to its next phase of COVID-19 testing with a study of its next generation S-1 construct.
• Vaxart is manufacturing the vaccine necessary to start the Phase 2 clinical study of its S-Wuhan construct and expects to begin this study shortly.
• A Non-Human Primate study of the S&N construct along with S-Wuhan and S-South Africa constructs showed optimal performance by the S-Wuhan construct and also cross reactivity against all variants tested. The decision was made to advance the S-Wuhan vaccine construct into Phase II development.

VXRT also announced that data came from their12-subject Phase Ib blinded “booster” study evaluating the ability of its norovirus vaccine to boost immunogenicity. Study participants were initially vaccinated with Vaxart‘s oral norovirus vaccine in late 2019 and were vaccinated again between February and April 2021.  Serum IgG and IgA antibody responses were significantly elevated 29 days post-boost immunization, with no difference in titer between subjects that had received a prior oral norovirus vaccine and those who had not previously been vaccinated.