This Week in Biotech

With the SPDR S&P Biotech Index up 34% 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 definitely a mixed bag, with an FDA approval and plenty of positive clinical and preclinical data pushing some biotech companies to the upside, while new drug application filing delays and analyst comments soured others.

What's popping ...
Perhaps the most exciting news of the week comes from small-cap biotech company Osiris Therapeutics (NASDAQ: OSIR  ) , which reported absolutely stunning top-line results from its late-stage therapy Grafix to treat diabetes-related foot ulcers. In trials, Grafix achieved 62% primary wound closure at 12 weeks, compared with just 21.3% for the current standard of care, easily meeting its primary endpoint and the pre-specified stopping point to end the trial early because of overwhelming efficacy. In addition, Osiris' therapy had far fewer adverse events than the current standard of treatment and completely closed 80% of wounds in patients that crossed over from the initial standard of care after it proved ineffective. As I said ... stunning! Shares ended the week higher by 86%.

GlaxoSmithKline (NYSE: GSK  ) also provided some pep in shareholders' step when it announced on Monday that the Food and Drug Administration had approved Tivicay (previously dolutegravir) for the treatment of HIV-1. In one trial in particular, Tivicay demonstrated a fully suppressed viral load (i.e., non-detectable levels of HIV-1 antibodies) in 63% of patients at 24 weeks. What's really intriguing about Tivicay is that it's approved to treat children as young as 12 (as long as they weigh 40kg and haven't taken a drug with the same action mechanism before) and can be used to treat patients that have taken HIV-1 medications before and treatment-naive patients. While I fully expect Gilead Sciences Stribild will remain the go-to drug in HIV-maintenance, Tivicay should fill the sub 18-year-old age gap and non-Stribild responsive patient gap perfectly.

Micro-cap synthetic cancer and infectious disease vaccine maker Inovio Pharmaceuticals (NASDAQ: INO  ) also excited investors following a Thursday press release that its SynCon DNA vaccine for malaria delivered through its proprietary cellectra electroporation device, demonstrated effective and durable antibody and T-cell responses in non-human primates and small animals in a preclinical study. While some malaria vaccines have improved immune resistance to this infectious disease, certain age groups, like infants, remain quite vulnerable and open up a big market potential for Inovio. I'd still caution that this is but a preclinical trial that won't even move into human studies until next year, but it's a promising start. 

What's dropping ...
Just when you thought that Forest Laboratories (NYSE: FRX  ) was getting its act together, it went and fumbled at the goal line. With patent expirations expected to wipe away a significant chunk of Forest Labs' revenue by 2015, many eyes were looking at its co-developed COPD maintenance combo drug, aclidinium/fomoterol, to make a dent in the COPD space. Instead, Forest and partner Almirall will delay their new drug application filing until 2014 to address chemistry, manufacturing, and control issues raised by the FDA in a pre-NDA filing meeting. In the meantime, GlaxoSmithKline and Theravance have already brought Breo Ellipta to market and also have Anoro Ellipta being reviewed by the FDA for long-term COPD maintenance. Forest Labs' window of opportunity in gaining COPD market share may have already closed.

Finally, MannKind (NASDAQ: MNKD  ) delivered what looked like amazingly good news earlier this week, when it reported positive late-stage data on its inhaled insulin drug, afrezza. In both trials, according to MannKind, afrezza met its primary endpoint and delivered reduced A1C levels compared to the placebo. However, research firm Summer Street isn't buying into the optimism, noting that MannKind only reported its results on two of its three late-stage trials while withholding the results from its Medtone-C trial. By week's end, MannKind has given up all of its big gains and actually ended lower by 23%.

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