This Week in Biotech

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

With the SPDR S&P Biotech Index up 31% 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.

Consider this the calm before the earnings season storm as there wasn't an overwhelming amount of clinical data and dealings to absorb this week in the biotech sector. Still, five key stories caught my attention and are certainly worth noting.

Johnson & Johnson (NYSE: JNJ  ) continued its recent string on exciting pharmaceutical news, when its subsidiary Janssen Pharmaceuticals announced on Thursday that the Food and Drug Administration had approved the expanded indication of Simponi Aria for infusion for the treatment of moderately to severely active rheumatoid arthritis, or RA. About 1.3 million people in the U.S. suffer from chronic RA, and Simponi Aria with methotrexate drastically improved signs, symptoms, and function at 24 weeks. Trial results showed significant improvement of 59% for patients taking Simponi Aria plus methotrexate compared to only 25% significant improvement among patients on the control drug.

Biopharmaceutical company Alkermes (NASDAQ: ALKS  ) also did its best to excite shareholders by unveiling a huge expansion to its product line. On its analyst day, Alkermes outlined its plan to focus on treating chronic diseases moving forward and pointed to three specific early-stage compounds that will help it achieve its goals. The first is an MMF prodrug modeled after Biogen Idec's Tecfidera that it anticipates could be taken less frequently and have fewer side effects. The second, ALKS-7106, is a pain treatment that will incorporate anti-abuse technology. The third is RBD-1419, an anti-cancer immunotherapy booster that could be effective against metastatic cancer types. You can read a more thorough synopsis of my take on the "new Alkermes" here.

Not all clinical news was good news, though, with Novartis (NYSE: NVS  ) delivering disappointing late-stage results for once-promising kidney cancer drug dovitinib this week. The drug, which had been hailed as a potential successor to Onyx Pharmaceuticals' Nexavar in treating kidney cancer, failed to meet its primary endpoint in a head-to-head trial against Nexavar. Thankfully, Novartis has such a diverse pipeline that it didn't represent a huge blow to shareholders. The real disappointment comes for patients with metastatic renal cell carcinoma who were hoping for a new breakthrough treatment. 

Not all of this week's news was clinical in nature. Consider Quest Diagnostics (NYSE: DGX  ) , for instance, which took the opportunity on Thursday to sell its small single-digital royalty stake in Pharmacyclics and J&J's experimental rare blood cancer drug ibrutinib for $485 million in cash to Royalty Pharma. It certainly wasn't a bad deal for Quest which acquired its royalties to ibrutinib through its acquisition of Celera in 2011. The sale netted Quest a gain after taxes, which it will record as a one-time gain in its upcoming quarter results and use to help fuel diagnostic research. 

Also of note (and don't say I didn't warn you!), Regulus Therapeutics (NASDAQ: RGLS  ) lost nearly 17% of its value this week after pricing a dilutive secondary offering of 4.5 million shares at $9.50 -- roughly 20% below its closing value when the week started. Considering that Regulus' entire pipeline is currently in the preclinical stage of its existence, now is a poor time for shareholders to be chasing shares higher. I'd suggest waiting until we receive at least some early-stage clinical results before betting on the promise of its pipeline.

It's no secret that most biotech stocks have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.

Read/Post Comments (0) | Recommend This Article (2)

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: 2547222, ~/Articles/ArticleHandler.aspx, 9/28/2016 8:33:16 AM

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 11 hours ago Sponsored by:
DOW 18,228.30 133.47 0.74%
S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

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

9/27/2016 4:00 PM
ALKS $49.79 Up +1.21 +2.49%
Alkermes CAPS Rating: ****
DGX $84.88 Up +0.27 +0.32%
Quest Diagnostics CAPS Rating: ****
JNJ $119.22 Up +1.44 +1.22%
Johnson and Johnso… CAPS Rating: *****
NVS $80.88 Up +0.15 +0.19%
Novartis CAPS Rating: ****
RGLS $3.51 Up +0.09 +2.63%
Regulus Therapeuti… CAPS Rating: ***