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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!