This Week in Biotech
With the SPDR S&P Biotech Index up 29% over the trailing-12-month period, 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.
As promised, while last week was relatively tame when it came to biotech news, we were somewhat overwhelmed this week with earnings news. But earnings stories aside, we had plenty in the way of clinical studies, an approval by the Food and Drug Administration, and a federal appellate court ruling to keep us entertained.
On the bright side, three biotech companies had a very good week.
Shareholders "nudged" Array BioPharma higher by nearly 18% on the week after it announced positive mid-stage data on ARRY-502, a treatment for mild to moderate persistent allergic asthma. In its mid-stage trial, ARRY-502 met its primary endpoint of improving lung function as measured by forced expiratory volume in one second, or FEV1. In the overall trial, FEV1 increased by 3.9% compared to the placebo, while a specified subset of patients in the Th2 Biomarker group saw their FEV1 jump by 6.8% relative to the placebo. ARRY-502 also met a number of secondary endpoints. Since the asthma market is a crowded field, Array also put the feelers out there that it's looking for a licensing partner to help take this experimental drug into the next stage.
Perhaps no shareholders jumped for more joy over the past week than those of BioCryst Pharmaceuticals , whose shares shot up 88% this week on word of a positive early-stage clinical trial for BCX4161. In a different context, shares have now jumped 155% in just the past two weeks. The oral experimental drug, BCX4161, which is designed to treat a rare condition known as hereditary angioedema (HAE), was considered safe and well tolerated among patients, and the company anticipates moving on to mid-stage testing soon. However, as the Fools Brian Orelli was quick to point out, this data came from a subset of healthy volunteers, and there's little guarantee it will translate into success in future trials on patients that do suffer from HAE.
Believe it or not, Forest Laboratories continued its string of good news following word from the Food and Drug Administration on Friday that Fetzima, a drug co-developed with Pierre Fabre Laboratories, had been approved to treat major depressive disorder. This is a big step for Forest Labs, which lost MDD drug Lexapro to patent expiration last year and now could be set to capitalize on a disease that can affect as many as 15 million people in the U.S. -- all with Eli Lilly's Cymbalta, a $5 billion-a-year drug, set to lose patent protection itself in the fourth quarter.
But they can't all be winners, and two biotech companies found that out the hard way.
Vertex Pharmaceuticals suffered through an unpleasant week, with shares down 9% after it announced a partial clinical hold on Friday for its all-oral hepatitis-C drug, VX-135. The drug, which is currently in midstage trials, was placed on clinical hold by the FDA after it noted elevated, but reversible, liver enzyme levels in patients receiving the 400mg dose with ribavirin. To me this looks like a precautionary hold, but it will be perceived as painful, since it puts Vertex's oral hepatitis-C medication that much further behind its competition. Kalydeco is becoming the future of Vertex with regard to its potential to treat various mutations of cystic fibrosis, so I wouldn't worry too much about this minor setback with VX-135.
The big loser this week, even if the share price doesn't reflect it, is hybrid branded and generic-drug maker Teva Pharmaceutical , which saw several of its patents on blockbuster multiple sclerosis drug Copaxone overturned in a federal appellate court. This ruling could potentially open the door for generic-drug makers to begin marketing generic versions of Copaxone, a $4 billion-per-year drug, by May instead of two years from now as Teva had initially expected. The move comes as good news for generic-drug developers suchas Momenta Pharmaceuticals, which, with Novartis, will make one of the two competing generic versions of the drug. For Teva, it gives the hybrid drugmaker all the more reason to continue to fight for its patents in court, and to search for potentially accretive acquisitions before it loses its Copaxone patent exclusivity.
It's no secret that most biotech stocks have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.
The article This Week in Biotech originally appeared on Fool.com.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.The Motley Fool owns shares of, and recommends, Momenta Pharmaceuticals. It also recommends Vertex Pharmaceuticals. 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 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.