This drug maker hammered analysts’ earnings estimates, posting EPS of $2.62 last quarter, vs. the -$1.16 previously forecast. Analysts are forecasting double-digit growth rates for the rest of this year.
The Medicines Company (MDCO)
From The Medical Technology Stock Letter
On its Q2 quarterly call, The Medicines Company (MDCO) management outlined the process of the interim look on the first 40 patients enrolled in the MDCO-216 Phase II trial called the PILOT study (https://clinicaltrials.gov/ct2/show/NCT02678923?term=MDCO-216&rank=1). By the end of August, an independent monitoring committee would tell the Company one of three things—a) the trial would be stopped early for efficacy; b) the trial would continue; or b) the trial would be stopped for safety and/or futility. As the Company is blinded to the data, no other details would be disclosed.
Therefore, we were not surprised when they announced that a) the trial would continue as planned and at this stage the data are inconclusive; b) there were no safety issues; c) all 120 patients have been enrolled and d) the study has been accepted as a Late Breaker presentation on November 15 at the Annual Meeting of the American Heart Association (http://professional.heart.org/professional/EducationMeetings/Meetings/ScientificSessions/UCM_316900_Scientific-Sessions.jsp).
With just 40 patients enrolled combined with the statistical penalty assessed for taking an early look, the p=value needed to reach significance at this early stage was most probably quite high (p=0.01 or less by our estimate). At this stage, not stopping the trial due to safety/futility and with no modifications to us is fine (a Late-Breaker acceptance at the biggest cardiology meeting of the year is often a positive event). With the full study results just a few months away and a more normalized p=0.05 applying to the data, we remain optimistic and believe the chances of success remain the same as before the interim look was announced.
In addition, the other key APO-A Milano compound, CSL-112 from CSL Behring, will have their late-stage Phase II trial also presented at the AHA (https://clinicaltrials.gov/ct2/show/NCT02742103). The AHA meeting will be a very big event for MDCO. In addition to the ‘216 data, MDCO’s cholesterol blockbuster Phase II trial—ORION—will also be presented, noting the compound’s 90- and possible 180-day LDL lowering efficacy (https://clinicaltrials.gov/ct2/show/NCT02597127?term=the+Medicines+Company+PCSK-9&rank=1).
Lastly, and not insignificantly, at the same conference AMGN is expected to present data of their PCSK-9 antibody, Repatha, and its ability to (like 216) reduce the thickness of the artery wall (PAV) (https://clinicaltrials.gov/ct2/show/NCT01813422?term=Amgen+Repatha+IVUS&rank=1).
Therefore, the AHA meeting will have at least 4 very impactful trials for MDCO.
In a way, the presentations are a bit ironic—CSL data will have a MACE endpoint (MACE includes: cardiovascular death, MI, ischemic stroke and hospitalization for unstable angina)—and investors (and us) are awaiting PCSK-9 outcomes data. And the Amgen data will have the atherosclerosis results we are watching for in the APO-A (e.g.,’ 216) trials.
MDCO has four key value added assets in carbavance, ABP-700, MDCO-216 and MDCO-PCSK9si. Carbavance is set for an NDA filing early next year, ABP-700 data will also be presented at two conferences in October and both cardiovascular drugs will be at the major AHA meeting. The data on PCSK-9 is key and expectations are high, but they are relatively low/non-existent for ‘216 and the others. The AHA meeting will be big for MDCO and we expect it will be very positive for the Company.
MDCO is a BUY under 50 with a TARGET PRICE of 75.
John McCamant, The Medical Technology Stock Letter, www.bioinvest.com, September 8, 2016