Medivation Inc (MDVN), Onyx Pharmaceuticals, Inc. (ONXX): Biotechs Take a Dive After a Standout Start to 2013

Page 1 of 2

Are investors hitting the brakes on biotech? The biotech sector’s one of the most boom-or-bust areas for investors, where fortunes can be won or lost. For most of the first half of 2013, it seemed the former was true, as the Nasdaq Biotechnology Index soared by double-digit percentage growth.

Over the past five days, however, the index shed nearly 5%, part of a 7% drop over the past month. Should investors be worried about this volatile sector, or are the past week’s losses a remote event you should discount? Let’s look at why some of the biotech index’s big names were on the move this week.

Even biotechs can’t escape Bernanke
To be fair to biotech investors, the entire market took a beating this week behind Federal Reserve Chairman Ben Bernanke’s announcement that the central bank could explore tapering back quantitative-easing bond buying later this year if the economy continues to improve. That won’t affect the biotech market much, but in a classic overreaction from Wall Street, the sector fell with every other one on Wednesday and Thursday.

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)

Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)‘ fall this week offers one example. Onyx shares plunged more than 9% over the past five days despite little news from the company. In fact, Onyx had been doing quite well with a double-digit gain year-to-date before this week; the company commands two strong oncology drugs that it’s partnered on with Bayer in kidney cancer treatment Nexavar and colorectal cancer therapy Stivarga, the latter of which Onyx predicts will reach blockbuster status, with peak sales in excess of $1 billion. All this week’s drop means for investors is a dip to buy this promising stock cheaper.

That’s not the case for the week’s biggest loser, however. Idenix Pharmaceuticals Inc (NASDAQ:IDIX) shares plunged by more than 31% this week after Friday’s 30% nosedive, completely wiping out this stock’s year-to-date gains. Thank the FDA for this one. after the agency requested more safety information from the company’s developmental hepatitis-C oral drug IDX20963. The drug’s still in preclinical stages, but the FDA put clinical holds on two of Idenix’s drugs last year, making this a very unwelcome trend at the company as competitors move ahead in the oral hep-C market.

Medivation Inc (NASDAQ:MDVN) shares also were hit hard this week, falling 7.8% over the past five days. Shares fell 8% alone on Monday, after Johnson & Johnson (NYSE:JNJ) agreed to purchase Aragon Pharmaceuticals in a $1 billion deal. It wasn’t a game-changer for J&J, considering Aragon’s developmental prostate cancer therapy ARN-509 is in phase 2 trials, although if the company can advance the drug to a regulatory victory down the road, it could one day fill in for J&J’s current blockbuster oncology drug Zytiga after its patent expires.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!