During our conversation, Hay started with recent approvals of two new obesity drugs. Arena Pharmaceuticals Inc. (ARNA:NASDAQ) received the FDA's blessing for Belviq (lorcaserin hydrochloride) on June 27, and Vivus Inc. (VVUS:NASDAQ) saw its product Qsymia (phentermine + topiramate) get approved on July 17. Hay is still bullish on Vivus because it owns 100% of Qsymia, and it also has an erectile dysfunction drug, Stendra (avanafil), which was approved by the FDA in April. Hay is less bullish on Arena, in part because Belviq is partnered with Eisai, which gets two-thirds of revenues. But if these two companies signal anything for the future, it has to be about Orexigen Therapeutics Inc.’s (OREX:NASDAQ) obesity drug Contrave (naltrexone + bupropion), which has an important catalyst on the horizon to rule out cardiovascular risk. Those results are expected in the second half of 2013.
"After these two approvals for Arena and Vivus, I feel much more positive (on Orexigen) than I did before," he says. "If you look at the way the overwhelmingly positive votes for these two approvals come out, you see it as a green light for Orexigen. Contrave may actually have a better profile than Arena's Belviq or Vivus' Qsymia once it does hit the market."
Hay is also following NPS Pharmaceuticals Inc., with Gattex (teduglutide) for short bowel syndrome (SBS) patients who are unable to absorb nutrients properly. The PDUFA date is expected to be Sept. 28. "It hasn't had an advisory committee yet," says Hay, "But the FDA stated that it does want one. I guess there's a possibility that if that falls close to the PDUFA date, it could be extended."
On the large-cap side Hay has been following the progress of Gilead Sciences Inc.’s (GILD:NASDAQ) Quad Integrase (elvitegravir + cobicistat + emtricitabine + tenofovir) for HIV. The "Quad pill" is a once per day dose, which is expected to improve patient compliance and give new life to Gilead's aging but lifesaving product line. Its PDUFA date is Aug. 27. "We expect this drug to be approved," says Hay. "It has shown non-inferiority efficacy data versus the components and the standard of care that's on the market now."
Hepatitis C (HCV) has been of huge interest to the markets this year. Achillion Pharmaceuticals Inc. (ACHN:NASDAQ) is expecting some very important phase 2 efficacy data for its HCV candidate ACH-1625. These data are expected at any time. Hay is overall neutral on Achillion because Gilead is the 800-pound gorilla in the HCV space right now. "It's going to be tough really to beat out the drugs that already have quite a substantial lead, such as Gilead's drug, GS-7977," he says.
Sunesis Pharmaceuticals Inc. is developing vosaroxin for acute myeloid leukemia (AML), and it has an upcoming data monitoring board (DMB) decision for a large phase 2 trial. "Those can be very large movers because it happens before a trial is completed," says Hay. "An event positive or negative, either way, is somewhat unexpected. My assumption is that the DMB will probably look at it and say to continue the trial, which is expected to be completed at the end of 2012 with data coming in 2013."
1) George S. Mack of The Life Sciences Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
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