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Biotech Forum Daily Digest: The Eagle Delivers! Biotech Rallies Monday. M&A To Pick Up? Spotlight On Incyte

The biotech sector got off to a good start to the week as biopharma concerns Teva Pharmaceutical and Eagle Pharma posted solid results, showing they are not Endo International.

Some big collaboration deals were announced on Monday as well that brought some of the "animal spirits" that have been missing for some three weeks back into the sector.

Today's spotlight feature is on one of the few true mid-caps in the biotech sector, Incyte. The company made a significant transaction and reported earnings this week.

The biotech and biopharma sectors got off to a good start to the week with the biotech sector clocking better than a two-and-a-half percent gain to begin the trading week. Teva Pharmaceutical (NYSE:TEVA) got the ball rolling by reporting better-than-expected results. It regain the ground the stock had lost on Friday in a knee-jerk reaction to downward reward guidance Endo International (NASDAQ:ENDP) surprised the markets with on Monday. Mylan (NASDAQ:MYL), which also got caught on that downdraft, also recovered some of its lost ground from late last week.

Eagle Pharmaceuticals (NASDAQ:EGRX) also provided one of the best earnings reports of the season as we wind down tallying up the results from Q1. I provided some reasons this Eagle was ready to "scream higher" on April 22nd, and the company delivered against that optimistic outlook. The small biopharma beat earnings estimates by 38 cents a share as revenues came in much higher than expected. This was driven by BENDEKA, which it has a large collaboration with Teva and is a better version of TEVA's drug TREANDA, which is effectively being migrated over. The stock soared more than 15% on Monday on these stellar numbers.

Also helping biotech get off the schneid was a couple of large collaboration deals that hit the tape on Monday. ARIAD (NASDAQ:ARIA) that it is selling its European operations to Incyte (NASDAQ:INCY). This larger industry player will acquire all the shares in ARIAD Pharmaceuticals European entity as well as an exclusive license to develop and commercialize ARIA's drug Iclusig in Europe and 22 other countries. ARIAD will retain commercialization rights in the U.S. and some other countries.

ARIAD will now receive $140 million in an upfront payment, tiered royalties between 32% and 50% on net sales of Iclusig and up to $135 million in potential development and regulatory milestones for new oncology indications for Iclusig in the territory. This took any current funding concerns off the table for ARIAD and will allow it to focus on commercializing Iclusig in the United States. Its second drug brigatinib could be approved before year end if upcoming trial results are positive as well.

OPKO Health (NYSE:OPK) also announced a collaboration deal with Vifor Fresenius Medical Care Renal Pharma. The transaction licenses Vifor to develop and commercialize RAYALDEE in Europe, Canada, Mexico, Australia, South Korea and certain other international markets for the treatment of secondary hyperparathyroidism in patients with chronic kidney disease and vitamin D insufficiency. OPKO retains the rights in the U.S., Latin America (excluding Mexico), Russia, China, Taiwan and Japan. The companies will collaborate to prepare the Marketing Authorization Application (MAA) in Europe.

OPKO will receive an upfront payment of $50 million in this deal. It will also get up to $52 million in regulatory and launch milestones as well as up to $180 million in sales-based milestones and double-digit royalties. Vifor has the option to acquire the U.S. rights for dialysis patients. If it exercises the option, it will pay OPKO commercial-based milestones and double-digit royalties. RAYALDEE has a PDUFA date in late October and is expected to garner approval. OPKO also delivered much better than expected revenue growth after the bell on...


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