Why Idenix Pharmaceuticals Shares Imploded

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of hepatitis-C-focused biotechnology firm Idenix Pharmaceuticals (Nasdaq: IDIX  ) crashed as much as 35% after receiving unfavorable news for its leading experimental drug candidate, IDX184.

So what: Idenix Pharmaceuticals received word from the Food and Drug Administration in a letter today that it was placing a hold on IDX184, a mid-stage treatment for hepatitis C that had shown significant efficacy in recent studies. According to the FDA, the reason for the hold stems from an adverse cardiac event that happened with a competitors' nucleotide polymerase inhibitor. That letter is referring to Bristol-Myers Squibb (NYSE: BMY  ) , which suspended its phase 2 trial of BMS-986094 which it acquired when it purchased Inhibtex for $2.5 billion earlier this year. Gilead Sciences (Nasdaq: GILD  ) , whose GS7977 has been at the forefront of hepatitis C innovation, dropped as well since its drug is also a nucleotide-based inhibitor.

Now what: Don't for one second think this is a reason to run out and buy Achillion Pharmaceuticals (Nasdaq: ACHN  ) since it has a non-nucleotide-based treatment, because it's not! There's very little reason here to believe that Gilead Sciences will have any long-term effect from Idenix's bad news; I hold this as even more evidence that Gilead has the clear path to be the first non-interferon-based hepatitis C treatment to be approved by the FDA. Until that time, the hepatitis C market is Vertex Pharmaceuticals' (Nasdaq: VRTX  ) to lose and Incivek will remain the premier treatment. Idenix clearly has a lot of hurdles to overcome and there just may not be much of the hepatitis C pie left by the time it works out all of its kinks.

Craving more input? Start by adding Idenix Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

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.

Motley Fool newsletter services have recommended buying shares of Vertex Pharmaceuticals and Gilead Sciences. 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.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1987081, ~/Articles/ArticleHandler.aspx, 10/28/2016 6:12:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,161.19 -8.49 -0.05%
S&P 500 2,126.41 -6.63 -0.31%
NASD 5,190.10 -25.87 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
IDIX.DL $0.00 Down +0.00 +0.00%
Idenix Pharmaceuti… CAPS Rating: **
ACHN $6.47 Down -0.06 -0.92%
Achillion Pharmace… CAPS Rating: ***
BMY $51.00 Down -0.96 -1.85%
Bristol-Myers Squi… CAPS Rating: ****
GILD $73.88 Down -1.95 -2.57%
Gilead Sciences CAPS Rating: *****
VRTX $77.58 Up +1.74 +2.29%
Vertex Pharmaceuti… CAPS Rating: ****