2H:10 Milestones In Drug Discovery (ARNA, VRTX, REGN, EXEL)

Piper Jaffray is out with an industry note, where it introduces well financed biotech companies that are preparing to launch potential blockbuster drugs. These drugs are expected to face value inflection points and outperform the broader market over the next 12-24 months. In the report, analysts reiterated their “overweight” rating on all four companies. Arena Pharmaceuticals (ARNA) is coming out with the drug Lorcaserin, which in recent trials showed that 47.1% of patients lost at least 5% of their body weight vs. 22.6% on a placebo. These trials clearly met FDA approval guidelines and is said to be the safest of the three new obesity agents. Vertex Pharmaceuticals (VRTX) expects to complete Telaprevir NDA by the year-end with peak U.S. sales of $3.9B in 2013. During a 12-week Telaprevir Phase III ADVANCE study, the drug achieved a Sustain Virologic Response of 75% compared to 44% of standard care. Regeneron (REGN) expects an interim look at the 1,200-patient Afibercept VELOUR study in the second half of 2010. The analysts at Piper Jaffray noted, “While it is possible the trial will be halted early for success, we believe the efficacy stopping hurdle for overall survival is high and the most likely outcome will be continuation of the study.” Lastly, Exelixis (EXEL) delivered positive Phase II data in refractory glioblastoma (GBM), which showed that 25% of patients achieved a 6-month PFS, well above the 5% historical level. EXEL now plans to initiate a pivotal Phase III study in refractory GBM this year.