With the SPDR S&P Biotech Index up 31% year to date, 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.
Unlike previous weeks, the news out of the biotech sector was overwhelmingly negative this week. The only piece of non-negative news to report came from Johnson & Johnson's (JNJ -1.74%) subsidiary Janssen Biotech that it's submitted a biologics license application with the FDA and a type II variation to the European Medicines Agency to expand the use of Stelara beyond just psoriasis. Specifically, J&J and Janssen are targeting its use as a treatment for psoriatic arthritis and noted its successful late-stage trial results as a reason it should eventually be approved.
And then came the cluster of bad news...
This year's worst-performing biotech, Chelsea Therapeutics (NASDAQ: CHTP), received yet another throttling after releasing mixed late-stage data on its neurogenic orthostatic hypotension drug, Northera. Chelsea's drug was denied approval by the FDA in March and has since been running additional long-term efficacy trials per the FDA's request. Data released this week showed that while Northera demonstrated a reduction in dizziness in patients within the first week, the effect beyond that wasn't statistically significant. Approval is beginning to look less and less likely now.
Anika Therapeutics' (ANIK 0.54%) problems this week were much more direct that just mixed late-stage data. Anika had appealed the FDA's decision to reject its osteoarthritis treatment, Monovisc, and found out this week that the FDA was going to uphold its decision to reject the drug. Monovisc has been approved for use in treating osteoarthritis pain in patients' knees in Canada and Europe, but it can't seem to get past the more stringent FDA. While not a crippling defeat, it nonetheless took the wind out of Anika's sails this week.
Cancer-focused biotech Geron (GERN 4.43%) lost more than a fifth of its value this week after announcing it'll stop the development of GRN1005 for brain cancers and would instead turn its attention to imetelstat, a cancer drug that hasn't impressed in recent clinical trials. In addition, Geron also said it'll shelve 40% of its staff to reduce costs. Someone get the life support machine, because we're going to need it!
Rounding out the week was the one biotech company I noted to keep your eyes on this week, Zogenix (ZGNX), which went before the FDA panel with its moderate-to-severe chronic pain management drug, Zohydro ER, and came out bloodied (and put egg on my face). Although trading was still halted as of this writing, the FDA panel recommended against approval by an 11-2 vote, with one member abstaining. Specifically, the panel worried about patient addiction. Needless to say, I'm not expecting a positive opening come Monday.
