Keep An Eye on ImmunoCellular, Merrimack, Bayer, and GlaxoSmithKline Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! This morning, let's take a look at ImmunoCellular Therapeutics , Merrimack Pharmaceuticals , Bayer , and GlaxoSmithKline -- which could loom large in health care headlines today.

ImmunoCellular could keep soaring on phase 1 data
The first stock to watch today is ImmunoCellular Therapeutics, which surged 36% yesterday after positive data was released from its phase 1 study of its lead drug candidate, ICT-107, a therapeutic vaccine for glioblastoma multiforme, a rare form of brain cancer that affects roughly 23,000 adults annually.

According to ImmunoCellular, eight of the 16 patients in the study survived for longer than five years after being diagnosed with brain cancer. That data marks a massive improvement over current treatments, which generally only extend the patient's lifespan by approximately 15 months. In addition, only 10% of patients are expected to live for more than five years.

ICT-107 is only one of ImmunoCellular's several immunotherapy vaccines -- next-generation treatments that spur an immune system response so that it can actively target certain cancers. ImmunoCellular investors are now focused on the drug's upcoming phase 2 results, which are expected to be released in the first half of next year.

Analysts believe that ICT-107 could generate annual peak sales of $576 million by 2021 -- not a blockbuster drug, but one that would substantially boost the $200 million company's profile in the biotech industry.

ImmunoCellular could continue climbing this morning, as it is already up by 14% in pre-market trading at the time of this writing.

Merrimack releases phase 2 data for MM-121
It could also be a busy morning for Merrimack Pharmaceuticals, which announced results from two trials of its experimental breast cancer drug MM-121, which is being produced in collaboration with Sanofi .

Merrimack reported results from two phase 2 studies of MM-121, the first fully human monoclonal antibody that targets ErbB3, a cell surface receptor that aids in tumor growth and survival. MM-121 targets ER/PR+ (HER2 negative) breast cancer. 75% of breast cancer cases are ER positive, and 65% of these cases are PR positive.

The first study compared MM-121 combined with Exemestane, a breast cancer drug for post-menopausal women, against a treatment of Exemestane alone. The released data showed an estimated hazard ratio of 0.75, missing the study's primary endpoint of a hazard ratio equivalent or lower than 0.5. The overall survival rate data favored the MM-121 arm, but Merrimack acknowledged that the results were not mature yet, since they only accounted for 25% of enrolled patients.

The second study compared MM-121 combined with Paclitaxel, a chemotherapy drug, followed by doses of cancer drugs doxorubicin and cyclophosphamide, against a treatment with Paclitaxel alone followed by doses of the same two drugs. The study was intended to measure the pathologic complete response, or pCR, of the treatment, but no primary endpoint was specified. The MM-121 arm showed a pCR rate of 10.8% compared to 3.3% in the control arm.

In other words, the trial results were favorable but mixed, and it's still too early to tell if this drug will eventually gain market approval. However, if approved, analysts believe that MM-121 has peak annual sales potential of $1.3 billion based on U.S. sales alone.

Merrimack also announced a new nanotechnology collaboration with generics giant Actavis, entitling Merrimack to receive up to $15.5 million in future research funding and milestone payments.

Bayer makes a big bid to expand its oncology portfolio
Meanwhile, German pharmaceutical and chemicals giant Bayer announced today that it was in talks to acquire Algeta, its Norwegian partner in a new prostate cancer treatment, for $2.4 billion -- a 27% premium over Algeta's closing price on Monday.

The two companies have been partnered in the development of the prostate cancer drug Xofigo since 2009. Xofigo was approved in the U.S. in May and in the EU in November. Analysts believe that Xofigo has peak annual sales potential of $1.4 billion by 2020.

The drug, which treats castration-resistant prostate cancer, competes against the three leading treatments in prostate cancer -- Johnson & Johnson's Zytiga, Medivation/Astellas' Xtandi, and Dendreon's Provenge.

However, Bayer might have to raise its bid, since Algeta's CFO has stated that the company would still consider rival bids. If Bayer successfully acquires Algeta, it will strengthen its pharmaceuticals business with a renewed focus on oncology -- an area that Amgen and AstraZeneca have been attempting to grow through acquisitions. Amgen acquired Onyx Pharmaceuticals in August for $10.4 billion, while AstraZeneca acquired privately held Amplimmune and Spirogen last month for $940 million.

Last quarter, Bayer's health care segment generated revenue of 4.7 billion euros ($6.4 billion), a 1% gain from the prior year quarter. The health care segment is considerably larger than its CropScience and MaterialScience businesses, which respectively generated 1.7 billion euros ($2.3 billion) and 2.9 billion euros ($3.9 billion) in revenue last quarter.

FDA lifts restrictions on GlaxoSmithKline's Avandia -- six years too late
Last but not least, the FDA announced that it was lifting restrictions on GlaxoSmithKline's diabetes drug Avandia, after concluding that it did not increase the risk of heart attacks. A 2007 study claimed that the drug raised the risk of heart attacks -- causing sales of the former blockbuster drug, which generated peak sales of $3.2 billion in 2006, to plunge to $9.7 million in 2012.

Therefore, the FDA announcement comes far too late for Glaxo, which had to withdraw the drug from Europe in 2010. In the United States, Avandia is now rarely considered a viable treatment option for diabetes.

In addition, the market for diabetes has changed drastically over the past few years, with next-generation treatments like GLP-1 analogs, which increase the body's natural production of insulin, and SGLT2 inhibitors, which increase the excretion of blood glucose through urine, capturing the attention of doctors and investors alike.

Another big stock on the move
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The article Keep An Eye on ImmunoCellular, Merrimack, Bayer, and GlaxoSmithKline Today originally appeared on

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