Hollis-Eden stock jumps on positive preclinical data; Inspire to present results on cystic fibrosis drug

By Sheri Kasprzak

New York, June 16 - Hollis-Eden Pharmaceuticals, Inc. saw its stock improve Friday after presenting positive preclinical results on five oral candidate compounds to reduce lung inflammation related to cystic fibrosis.

The news was announced early Friday, and by 9 a.m. ET, the stock had gained 18.06%, or 91 cents. The stock went on to gain 11 cents, or 2.18%, to close the session at $5.15 (Nasdaq: HEPH).

The compounds have been tested on mouse models of lung inflammation and septic shock. The data also showed that the compounds limited pre-inflammatory cytokines in vitro using human whole blood. Hollis-Eden is in the preliminary stages of testing the compounds on monkeys to determine their effectiveness on primates.

The data was presented at the European Cystic Fibrosis Conference in Copenhagen, Denmark.

"Chronic inflammation of the lungs is a significant factor in the damaging effects of [cystic fibrosis]," said a statement released Friday morning from Hollis-Eden. "Hollis-Eden's class of compounds have demonstrated anti-inflammatory effects in early clinical studies in HIV and AIDS patients and anti-mycobacterial activity in preclinical models of tuberculosis.

"The company believes that these anti-inflammatory and immune-stimulating properties of its hormonal signaling technology platform may contribute to a decrease in the chronic lung inflammation associated with cystic fibrosis and limit and prevent pulmonary infections in CF patients."

In the next phase, Hollis-Eden said it plans to compare the five compounds in preclinical toxicity studies to arrive at the optimal compound for continued clinical development.

Hollis-Eden, based in San Diego, develops small molecule compounds used to treat metabolic disorders, autoimmune disorders, pulmonary diseases, cancer and infectious diseases.

In the broader market Friday, sellside traders said activity was light.

"There are a few things trading here and there, but mostly on news," said one sellside trader. "The [stock] market is off in general."

In other cystic fibrosis news, Inspire Pharmaceuticals, Inc. will release phase 2 trials on denufosol tetrasodium to treat cystic fibrosis at the European Cystic Fibrosis Conference currently being held in Copenhagen.

The drug is used to treat cystic fibrosis patients with mild to moderate lung function impairment.

This news was announced Friday morning and, after making initial gains early in the session, the stock slipped by a penny to close at $4.61 (Nasdaq: ISPH). At 2 p.m. ET, the stock had climbed 1.52%, or 7 cents.

Based in Durham, N.C., Inspire develops therapeutic treatments for ophthalmic diseases, respiratory ailments, cystic fibrosis, allergic rhinitis and other disorder.

Micromet stock climbs

Micromet, Inc.'s stock advanced after the company released encouraging preclinical data on its MT203 antibody to treat inflammatory conditions.

The stock gained 6.31%, or 27 cents, to end at $4.55 (Nasdaq: MITI).

Volume of the company's shares stalled with 16,914 shares traded compared to the average 35,714.8 shares.

In a study published in Molecular Immunology, Micromet reported that the antibody successfully neutralizes human GM-CSF, a key pro-inflammatory cytokine responsible for the progression of inflammatory diseases like rheumatoid arthritis, asthma, multiple sclerosis and other diseases.

"Results from in-vitro studies demonstrate the MT203 binds human GM-CSF with low picomolar affinity and potently prevents GM-CSF-induced proliferation as well as production of the chemokine IL-8," said a statement from Micromet. "Moreover, the human antibody was observed to significantly reduce both the activation and survival of human eosinophils, which are involved in the development of a number of inflammatory lung diseases."

Located in Carlsbad, Calif., Micromet is focused on treatments for cancer, inflammation and autoimmune diseases.

Tm Bioscience, Sanbio reach deal

Tm Bioscience Corp.'s stock climbed by more than 5% on Friday after the company signed a distribution agreement with Sanbio BV to commercialize the ID-Tag Respiratory Viral Panel in the Netherlands.

Tm's stock gained 6 cents to end the session at C$1.23 (Toronto: TMC).

"Signing our first European distribution agreement for our ID-Tag RVP is an important milestone in our global commercialization strategy for this product," said Greg Hines, Tm's chief executive officer, in a statement. "We intend to complete a series of distribution agreements across Europe over the coming months to be well positioned for the rapid commercialization of this test upon gaining European regulatory clearance, which we anticipate will be achieved in 2006."

The ID-Tag detects respiratory diseases, including avian flu and SARS.

Toronto-based Tm develops treatments for human genetic disorders and infectious diseases.

Sangamo stock drops on follow-on sale

Sangamo BioSciences, Inc.'s stock slipped 9.8% after it priced a $20.925 million follow-on offering of common stock at $6.75 after market hours Thursday, discounted from the closing level of $7.35.

The stock closed down 72 cents to end at $6.63, but gained 27 cents in after-hours trading (Nasdaq: SGMO). On Thursday, the stock gained 41 cents to end at $7.35.

The Richmond, Calif., company sold 3.1 million shares.

There is a greenshoe for a further 465,000 shares.

Piper Jaffray & Co. was underwriter for the off-the-shelf sale.

Sangamo, which is focused on the research and development of novel DNA-binding proteins for therapeutic gene regulation and modification, will use net proceeds of $20.15 million to continue the development of its ZFP Therapeutic product candidates and research programs and for other general corporate purposes.

"We believe that the initial results of our clinical and commercial development efforts put us in a position to complete this firmly underwritten offering quickly, without a lengthy marketing effort," said Edward Lanphier, Sangamo's president and chief executive officer, in a news release. "As we prepare to enter into our first phase 2 clinical trial, this $20.15 million of additional capital puts us in a stronger position to accelerate this program and to simultaneously bring additional ZFP Therapeutic programs into the clinic."

Sangamo expects to end fiscal 2006 with $50 million in cash and cash equivalents, up from $30 million previously projected.

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