With the SPDR S&P Biotech Index up 23% 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.
We received a wide variety of news this week out of the biotech sector including FDA decisions, buyout rumors, drug recalls, and even earnings reports, so let’s not waste any time and just dig right in.
Dynavax Technologies Corporation (NASDAQ:DVAX), maker of Heplisav, a vaccine for hepatitis-B, received a complete response letter on Monday for its experimental drug — and the news was worse than investors imagined. The FDA noted that the data provided was insufficient to adequately determine the safety of the drug for the 18- to 70-year-old target audience and remained concerned about the potential for Heplisav to cause rare autoimmune events. Had this simply been a matter of conducting additional safety trials, I would have declared this a victory for Dynavax Technologies Corporation (NASDAQ:DVAX) and assumed Heplisav would be approved within 12 to 18 months. Because of the latter concern regarding autoimmune events, Heplisav could be a tough sell, and even if it does get approved by the FDA, it may be with restricted use labeling. To top things off, Dynavax’s CFO, Christine Larson, stepped down midweek. All told, Dynavax Technologies Corporation (NASDAQ:DVAX) shares tumbled 33% this week.
On the flipside, Zogenix, Inc. (NASDAQ:ZGNX) shares rallied 46% after the FDA announced that it was delaying its PDUFA decision on Zohydro ER for moderate to severe pain management. Although the FDA didn’t list a reason for the extension, it did note that the extension would be brief and last up to only a few weeks. This led many on the Street to assume that Zohydro ER may be approved sooner than later. The FDA is under no obligation to agree with its panel, but it is worth noting that it often does and its panel voted overwhelmingly (11-2 with one abstention) against recommending approval because of the potential for abuse of the drug.