NEW YORK, Oct. 18, 2016 /CNW/ - TradersNewsSource.com Biotechnology Market News: Two small-cap biotech companies we follow, Dynavax Technologies Corporation (NASDAQ: DVAX) and Celldex Therapeutics (NASDAQ: CLDX), released positive news last week. Celldex reported positive Phase 2 trial data from its monoclonal antibody-drug conjugate that targets several different cancers, while Dynavax announced the positive findings from a Phase 1/2 study evaluating the use of its immunotherapy in conjunction with an already approved immunotherapy to fight melanoma.
The share prices of both companies are up slightly on the news, with significant price appreciation perhaps not likely until the release of positive news more suggestive of certain or imminent FDA approval of what will become a moneymaking drug or treatment. Perhaps investors aren't seeing the moneymaking potential in the DVAX news, and imminence and certainty may be lacking in CLDX news.
That said, DVAX and CLDX have strong pipelines with treatments that could spell future financial success for their stockholders, but both companies face a future cash crunch that could result in investors waking to the unwelcome news of the share-diluting "secondary offering." Meanwhile, Traders News Source is following a similar small-cap biotech play that seems to be on track for supporting its promising oncology pipeline with an approved, ace-up-its-sleeve, on the market drug.
Dynavax is on the radar of active biotech traders due to a December 15 FDA Prescription Drug User Fee Act (PDUFA) deadline for approving the company's Hepatitis B vaccine, "Heplisav-B™." Investors were spooked in early September when the company announced that the FDA had cancelled a scheduled November 16 advisory committee meeting to review the drug. However, fears that this suggested a delay in PDUFA deadline, or outright denial via Complete Response Letter, have been allayed, as the FDA apparently plans to address outstanding questions about the drug directly with Dynavax. In Phase 3 trials Heplisav-B™ reportedly demonstrated higher and earlier protection with fewer doses, and as safely, as a currently approved vaccine.
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Should Heplisav-B™ gain approval, subsequent sales would undoubtedly help support the other three immune-response related products in its pipeline, what with the most bullish analyst believing peak sales could reach $600-million. However, anything less than outright approval means that DVAX only has about a year's worth of cash to fund its drug development, which suggests that the company would need to resort to a secondary offering to support its other promising products.
Celldex, with an intriguing mix of therapeutic antibodies and immune system modulators and vaccines for the treatment of cancer products undergoing seven clinical trials, is likely facing more of a potential cash crunch than DVAX. While it has more than $200 million in cash, it's $33 million per quarter operating costs only support the pipeline for another year and a half or so, which might not be enough time to get any of its products through the FDA approval regimen. Though CLDX is reportedly seeking to fast track a couple of its products through the process with orphan drug status designations. Still, not a sure bet, and at this point a secondary offering would seem likely.
In the clinical stage small-cap biotech arena cash can be a big factor. Though their commercial product, Belviq, has had modest success, Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) is seeing the anti-obesity drug's sales decline. As they turn toward their clinical development products such as their most likely candidate Etrasimod for ulcerative colitis, they will compete with biopharma giants such as Biogen and Gilead, also developing drugs for ulcerative colitis. With little more than $100 million in cash, ARNA may face a cash crunch in the near term.
Of course, the closer a company gets to FDA approval the better their fortunes fare. Yesterday Omeros Corporation (NASDAQ: OMER) announced positive data from the company's Phase 2 clinical trial of OMS721 for the treatment of kidney disorders. Statistical significance (p ≤ 0.017) was achieved on key endpoints of improvement in renal function. Omeros also reported the outcome of a recent FDA meeting regarding breakthrough therapy designation for OMS721 in immunoglobulin A (IgA) nephropathy (also known as Berger's disease). On October 10th, Exelixis, Inc. (NASDAQ: EXEL) announced results from its phase 2 CABOSUN study of Cabometyx in patients with previously untreated advanced kidney cancer. The clinical trial was structured as a head-to-head comparison between Cabometyx and Pfizer's Sutent, and Cabometyx emerged as the clear winner. Shares of both these companies were up on their news.
Another biotech company that has our attention recently received approval for an oral form of a drug it already had on the market in injectable form. The company believes that the oral form of its drug, which went on the market last month, could lead to sales of up to $1-billion. And with the milestone and royalty structure the company established with the pharmaceutical partner marketing the drug, even half of this sales figure would help support the company's robust pipeline of five oncology treatments and therapies, one of which has been fast tracked by FDA with orphan drug status designation.
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