-=Five Prime Therapeutics (FPRX) to be acquired by Amgen (AMGN) for $38 a share or $1.9 billion

• Amgen will buy cancer drugmaker Five Prime Therapeutics for $1.9 billion in a rare public company acquisition by the large California biotech, which has been investing heavily to build up its oncology business. 
• Five Prime's recent market rebound has been fueled by the success last fall of a mid-stage study testing the company's experimental stomach cancer treatment bemarituzumab. Results suggested adding the antibody drug to chemotherapy could improve response rates and extend survival in patients with a certain type of gastric cancer.
• Amgen's last significant public company acquisition was a nearly $10 billion buyout of Onyx Pharmaceuticals in 2013. That deal brought in the multiple myeloma treatment Kyprolis and followed two other early-decade acquisitions that gave Amgen the cancer drugs Imylgic and Blincyto.

  

 

With competition eating into the sales of franchise products like Neupogen, the first-generation biotech company Amgen has been hustling to reinvent itself with new products and acquisitions.

Thursday morning, the company (ticker: AMGN) added to its anticancer pipeline with a $1.9 billion deal to acquire Five Prime Therapeutics (FPRX), a small company that is testing a targeted treatment for stomach cancers. Investors in Amgen didn’t take much note.

Amgen stock slipped 1% in Thursday’s trading to close at $229.91, on a day when the Nasdaq Composite Index slid 2%. But Amgen’s $38 a share offer for Five Prime represented a substantial premium and Five Prime stock jumped 79% to end the day at $38.

Five Prime’s experimental drug bemarituzumab fits well with other stomach-cancer treatments that Amgen is developing, said Amgen financial chief Peter Griffiths, on a Thursday conference call. Stomach cancer is the No. 3 killer among cancers, and is particularly prevalent in Asia, where Amgen aims to increase its revenue. The acquisition should close in the June quarter.

A Thursday afternoon note by Raymond James analyst Dane Leone compared the Phase 2 trial performance of bemarituzumab against a recently reported Phase 3 trial of the Bristol Myers Squibb (BMY) product Opdivo in combination with chemotherapy as a first-line treatment for stomach cancer. The U.S. Food and Drug Administration is giving Opdivo a fast-track review after Bristol’s study showed that its drug lengthened survival by a couple of months, compared to chemotherapy alone.

The Phase 2 study of Five Prime’s drug with chemo stalled stomach cancer for a couple of months longer than chemo alone. Amgen expects to start a Phase 3 trial and says the drug could also prove effective against other solid tumors, such as lung cancer.

The Raymond James analyst expects the Bristol drug to become the standard treatment for stomach cancers driven by the cellular receptor that Opdivo targets— a worldwide population of 45,000 patients. Five Prime’s bemarituzumab could be used for patients whose cancers are driven by the different receptor targeted by that drug—a13,500 patient market, Leone estimates.

The analyst expects more deals by Amgen over the course of 2021. He rates the stock a Market Performer.

=Incyte (INCY) and Merck (MRK) : failed key Phase 3 melanoma study

• Biotech stocks (XBI) lower after important immune-oncology combo data (Incyte's IDO inhibitor plus Merck's Keytruda) fails in key Phase 3 melanoma study:  NLNK (IDO inhibitor peer) -37.57%,  INCY -18.23%,  NKTR -9.84%,  JNCE -10.20%,  LABU -5.14%,  FPRX -3.84%,  ONCS -3.72%,  SAGE -2.21%,  SGEN -1.81%,  BLUE -4.85%,  PBYI-1.85%,  SPPI -2.46%,  CRVS -9.17%,  TSRO +0.37%,  BMRN -2.01%, GLYC-2.03%, MRK-1.19% 
• IBB -1.99%,  XBI -1.78%

Incyte announces that the External Data Monitoring Committee determined that the Phase 3 ECHO-301/KEYNOTE-252 study did not meet the primary endpoint 

The co and Merck (MRK) announced that an external Data Monitoring Committee review of the pivotal Phase 3 ECHO-301/KEYNOTE-252 study results evaluating Incyte's epacadostat in combination with Merck's KEYTRUDA in patients with unresectable or metastatic melanoma determined that the study did not meet the primary endpoint of improving progression-free survival in the overall population compared to KEYTRUDA monotherapy.

• The study's second primary endpoint of overall survival also is not expected to reach statistical significance. Based on these results, and at the recommendation of the eDMC, the study will be stopped. The safety profile observed in ECHO-301/KEYNOTE-252 was consistent with that observed in previously reported studies of epacadostat in combination with KEYTRUDA.

Incyte and Merck will inform investigators of the results and work with investigators to appropriately conclude the study in a manner consistent with the best interests of each patient. Data from this study will be analyzed and submitted for presentation at an upcoming scientific congress.

-=Five Prime Therapeutics (FPRX) reported earnings on Mon 6 Nov 2017 (a/h)

Five Prime Therapeutics misses by $0.21, misses on revs 

• Reports Q3 (Sep) loss of $1.54 per share, $0.21 worse thanthe Capital IQ Consensus of ($1.33); revenues rose 24.7% year/year to $8.33 mln vs the $16.16 mln Capital IQ Consensus.
• "This is an exciting time at Five Prime, as many of our programs are reaching important inflection points," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "Importantly, later this week at the SITC annual meeting, we and BMS plan to report our first clinical data from the Phase 1a/1b immuno-oncology trial studying cabiralizumab with OPDIVO. The oral late-breaking presentation will highlight preliminary safety, PK and PD data, and initial efficacy from one of the expansion cohorts. We expect all of the cohorts in the trial to be fully enrolled before the end of 2017. Furthermore, we anticipate starting a Phase 1/3 chemotherapy combination trial with FPA144 before year end. The Phase 1 component will serve as a lead-in to our planned global registrational trial of FPA144 as a front-line therapy in patients with metastatic gastric cancer whose tumors overexpress FGFR2b. Additionally, we are on track to file an IND for FPA150, our anti-B7-H4 antibody during the fourth quarter, which would position us to initiate a Phase 1 trial early in 2018.
• Cash, cash equivalents and marketable securities totaled $320.8 million on September 30, 2017, compared to $421.7 million on December 31, 2016. Five Prime expects full-year 2017 net cash used in operating activities to be less than $120 million. The company estimates ending 2017 with slightly less than $300 million in cash, cash equivalents and marketable securities. 

This week's biggest % winners & losers : Oct. 9 - 13, 17 (wk 41)

The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

• Healthcare: ARDX (7.28 +28.76%), AERI (61.7 +17.19%), FPRX (43.36 +11.62%), LCI (23.25 +10.45%)
• Materials: PVG (12.01 +22.93%), RFP (6.4 +20.75%), FBR (16.32 +11.4%), MERC (13.18 +10.25%)
• Consumer Discretionary: CETV (4.8 +10.34%)
• Information Technology: ICHR (32.55 +23.25%), GLUU (4.35 +15.69%), NTNX (26.6 +14.93%), SOHU (64.96 +13.05%), CEVA (47.55 +11.49%), UCTT (33.54 +10.33%), TYPE (22.15 +10.2%)
• Financials: NOAH (40.13 +13.59%)
• Energy: HLX (7.86 +18.55%), SM (19.04 +12.13%), CVRR (11.35 +11.27%)

This week's top 20 % losers

• Healthcare: ATRS (2.33 -40.23%), NSTG (11.08 -31.52%), ONVO (1.55 -24.02%), SGRY (8.95 -20.8%), ARA (12.49 -19%), CYH (5.77 -18.73%), ADMS (19.05 -17.57%), CBPO (79.98 -16.84%), THC (13.15 -15.97%)
• Industrials: HDSN (5.95 -21.61%)
• Consumer Discretionary: ASNA (1.79 -18.26%), FRED (5.41 -17.15%)
• Information Technology: CCRC (12.79 -20.26%), AAOI (47.18 -18.89%), HAWK (34.9 -18.74%), HIMX (9.33 -15.41%)
• Energy: SDRL (0.29 -22.89%), PKD (0.98 -18.48%), CIE (1.05 -17.32%)
• Utilities: PCG (57.72 -16.15%)

Five Prime Therapeutics (FPRX) to present at the Society for Immunotherapy of Cancer (SITC) 32nd Annual Meeting

• Headquarters: San Francisco, CA
• Founded: December 2001
• fiveprime.com

   

Five Prime Therapeutics announces Cabiralizumab Phase 1a/1b data abstract selected for late breaking oral presentation at the Society for Immunotherapy of Cancer (SITC) 32nd Annual Meeting

• The abstract featuring data from the Phase 1a/1b clinical trial evaluating the immunotherapy combination of its CSF-1R antibody, cabiralizumab (FPA008), with Opdivo (nivolumab), Bristol-Myers Squibb's PD-1 immune checkpoint inhibitor, has been selected for a late breaking oral presentation at the Society for Immunotherapy of Cancer (SITC) 32nd Annual Meeting, being held Nov. 8-12, 2017 in National Harbor, Maryland. Abstract Title: "First in Human Phase I Dose Escalation and Expansion of a novel combination, anti-CSF1-receptor (cabiralizumab) plus anti-PD-1 (nivolumab) in patients with advanced solid tumors."
• This will be the first presentation of clinical data on a combination of a CSF-1R antibody and a checkpoint inhibitor, to the Company's knowledge 
• In the Phase 1a/1b trial, Five Prime and Bristol-Myers Squibb are evaluating the safety, tolerability and preliminary efficacy of the combination in advanced solid tumors.

FPRX — is it a buy?

• 8/8/17:   Is FPRX a buy?

• A month later:

Long trade : FPRX +80% (10/15)