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.
This week was filled with quite a bit of clinical disappointment but attempted to make up for it with an FDA approval, the announcement that one high-profile biotech may be up for sale, and word that another one made a big purchase.
On the clinical front, Dynavax Technologies Corporation (NASDAQ:DVAX) shares were absolutely clobbered, finishing the week down 53% after reporting its findings from a biologics license application meeting with the Food and Drug Administration involving its hepatitis-B vaccine Heplisav. The reason for the haircut was based on the FDA’s findings that Dynavax Technologies Corporation (NASDAQ:DVAX) would need to run another trial — which is both costly and quite time-consuming — to establish the safety of the vaccine. We can also add this to the other complete response letter requests that asked Dynavax Technologies Corporation (NASDAQ:DVAX) to address concerns about the manufacturing of the vaccine. Right now we have more than enough reasons to avoid Dynavax Technologies Corporation (NASDAQ:DVAX) stock at these levels.
But it wasn’t just small-cap biotechnology companies taking it on the chin. Eli Lilly & Co. (NYSE:LLY) continues to stumble over its own feet in Alzheimer’s research when it pulled the plug of mid-stage trials of LY2886721 following abnormal liver tests in patients on the drug. Eli Lilly & Co. (NYSE:LLY) did mention that it has no intentions of curbing its study of BACE inhibitors with regard to their potential benefit to treating Alzheimer’s disease. This does, however, mark yet another failure for Eli Lilly & Co. (NYSE:LLY), whose solanezumab failed to meet its primary endpoint in late-stage trials last year.
If there was an FDA bright spot, it came from Amgen, Inc. (NASDAQ:AMGN)‘s Xgeva, which added another approval indication to treat adults with unresectable giant cell tumor of bone. In trials, Xgeva, which aids in reducing fracturing, delivered an overall objective response rate of 25%, with those patients exhibiting a median response duration of eight months. The FDA approved Xgeva in 2010 to treat skeletal-related events in patients with bone metastases and solid tumors.