Active Biotech in focus

Active Biotech (OMX: ACTI) has made an impressive rebound in the past few weeks. In the aftermath of the news that relapsed MS treatment candidate Laquinimod failed to reach primary endpoint in the second phase 3 study the stock briefly broke down below 20 SEK.

That sell-of was seen as a buying opportunity by many particularly since the company also has two clinical-stage oncology drugs in the pipeline. The company has around 50 million Euros in cash remaining for clinical development.

Active Biotech and Ipsen (Euronext: IPN) presented long-term safety data, along with other data, on a phase 2 study with quinoline-3-carboxamide derivative Tasquinimod (TASQ) in castrate resistant prostate cancer at the 27th Annual EAU Congress in Paris on 24-28 February 2012. The poster is available here. Phase 3 study in the indication is expected to report towards the end of 2013.

The next major catalyst could be a read-out from a pivotal Phase II/III study of ANYARA (naptumomab estafenatox), a fusion protein between a 5T4 binding antibody fragment and an engineered superantigen, in combination with interferon-alpha compared to stand-alone interferon-alpha treatment in over 500 advanced renal cancer patients. The enrolment was completed in June 2009 and initially Active Biotech said it was expecting final survival data, that is to be presented after 384 events, in H1 2011. Currently this is projected for H2 2012.

Partner Teva Pharmaceuticals (NASDAQ: TEVA, TASE: TEVA) has made it known that the FDA said that a new phase 3 study would be required prior to U.S. approval of Laquinimod could be possible. At the Citi 2012 Global Health Care Conference a company representative told that FDA is putting an SPA in place for the third study, where the protocol will be changed and the company will start the study within several months.

There has been some speculation on switching to combination treatment as well. In Europe the company is considering whether it should file based on the current data. The situation is different in Europe where the agencies have said it may not be necessary to have all endpoints reach statistical significance in both studies. Should Teva decide to file, Active Biotech would receive a milestone.

Yesterday after Pareto-Öhman hiked recommendation from hold to buy with a target price hike from 27 to 50 SEK, the stock went parabolic and gained over 25%. This morning it even climbed above 60 SEK before some serious profit taking combined with renewed concerns over Greece has led to a major correction. The stock is now trading around 46 SEK, which translates to a market cap around 3.2 billion SEK or around 350 million Euros.