This Week in Biotech


With the SPDR S&P Biotech Index up 33% year to date, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.

You might have thought that the week leading up to Christmas would be pretty tame for the biotech sector. In reality, it was a ridiculously busy week filled with both extremely positive and downright awful news.

In the plus column, Halozyme Therapeutics shot higher by 27% following news that Pfizer would be licensing its Enhanze technology. As my Foolish colleague Brian Orelli notes, this technology allows previously IV-only drugs to be injected subcutaneously. The licensing will result in $8 million of upfront payments to Halozyme and could give Halozyme the opportunity to earn an additional $507 million in payments.

Fat-busting drug producer VIVUS also put on a few pounds to the delight of shareholders following conflicting, yet positive, reports from Symphony Health Solutions and IMS Health that Qsymia sales are growing by double digits as of the week ended Nov. 12. A key point I noted earlier in the week is the recent coverage initiated on Qsymia by Aetna , which should coerce other insurers to jump on board.

The results were somewhat mixed for Alexza Pharmaceuticals , which announced late yesterday that the FDA has approved its Adasuve inhalation powder for the treatment of agitation associated with schizophrenia and bipolar disorder. Investors didn't take nearly as kindly to the news after the bell, however, as a safety warning on the box will indicate that the drug has been linked to "bronchospasms and increased mortality in elderly patients with dementia related psychosis." The first few quarters of sales should give us an indication of whether the black box warning is a death knell for Alexza.

And then this happened ...

Shares of Oncothyreon were slaughtered this week after the clinical-stage company reported late-stage results for its advanced non-small-cell lung cancer drug, Stimuvax. Guessing by the greater than 50% haircut, the results weren't good. In a study of spanning more than 1,500 patients in 33 countries, the drug failed to meet its specified endpoints, although development partner Merck KGaA, which conducted the studies, noted that some subgroups showed "noticeable treatment effects." In short, Stimuvax isn't dead, but any near-term hope for approval certainly is.

Finally, Amicus Therapeutics held true to its stock symbol and folded under pressure. Shares lost more than 50% on the week after its late-stage, six-month, study featuring experimental drug Amigal to treat Fabry disease failed to meet its endpoint. The drug, which was being co-developed with GlaxoSmithKline , failed to cut down a targeted type of fat in kidney blood vessels relative to the placebo.

Is this stock about to slim down?
The ravages of America's obesity epidemic are a challenge of epic proportions. However, a group of drug companies is looking to change everything. Newly approved drugs, including one developed by VIVUS, could help to reverse this deadly course while reaping massive profits for investors in the process. The profit opportunity is immense, but plenty of risks still exist, so make sure you understand the full story behind VIVUS in the Fool's brand-new premium research service. It's such an important story that we have our top health-care writer on the job, so make sure to secure a copy today by clicking here now.

The article This Week in Biotech originally appeared on

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.