This Week in Biotech: 3 FDA Surprises and a Mammoth Collaboration

Along with the J.P. Morgan Healthcare Conference, these three FDA actions and this major partnership announcement took center stage!

Jan 18, 2014 at 1:20PM

With the J.P. Morgan Healthcare Conference going on this past week and approximately 300 of the most innovative pharmaceutical, biotechnology, and medical device companies presenting, you sort of knew that this week's wrap-up was going to be stretched into two parts.

In Part 1 of "This Week in Biotech," which you can view by clicking here, we discussed the five most important clinical data releases over the past week. Now, in Part 2, we're going to take a closer look at three surprising actions from the Food and Drug Administration, as well as a whopper of a collaboration involving one of pharma's largest companies.

A complete 180
You could certainly say that shareholders of Chelsea Therapeutics (NASDAQ:CHTP) weren't all that hopeful heading into this week's FDA advisory panel meeting, the reason being a nearly 30% drop on Friday last week after the release of the briefing documents for its symptomatic neurogenic orthostatic hypotension drug, Northera, which revealed the possibility of a complex decision ahead. What followed on Tuesday was a complete shock, with the FDA's panel voting overwhelmingly, 16-1, in favor of approving Northera to treat dizziness in Parkinson's disease patients. The vote doesn't guarantee Northera an approval, as the FDA isn't required to follow the advice of its panel, and the FDA has quibbled over Northera's long-term effectiveness previously, but this does give the drug a better than 50-50 chance of being approved at this point. The real date with destiny comes next month, when Chelsea gets its PDUFA decision date with the FDA.

Wait for it ... wait for it ... no, really, wait for it!
Shares of cardiovascular drug developer Amarin (NASDAQ:AMRN) rose rapidly then sank hard by midweek after the Division of Metabolism and Endocrinology Products, or DMEP, delayed its decision on whether to reinstate Vascepa's special protocol assessment, which was rescinded in October. DMEP had originally set Jan. 15 as the date by which it would make its decision, but at least Amarin doesn't anticipate a long wait beyond the original Jan. 15 deadline. The bad news is that with or without the SPA, it seems extremely likely that the only way Amarin is going to expand its LDL-cholesterol-reducing drug to a wider swath of high-triglyceride patients is through a large and time-consuming cardiovascular safety and efficacy study. As such, I suspect it could be years before Amarin's losses have any hope of shrinking significantly.

A technical knockout!
Johnson & Johnson
(NYSE:JNJ) may be a well-oiled machine, but that doesn't mean it doesn't have a misfire in the engine every now and then. On Thursday the FDA's advisory panel rejected Xarelto, a drug already approved to treat atrial fibrillation, for acute coronary syndrome, or ACS. The rejection, which is actually Xarelto's third for the ACS indication, wasn't the surprise so much as the resounding 10-0 vote against the recommendation! The FDA's panel noted that a single trial with missing trial data would not be enough to demonstrate the benefits and safety of Xarelto in the much more expansive ACS indication. I'm not sure this will be enough to dissuade Johnson & Johnson to give up, but it seems evident that Xarelto's chances of approval are minimal at best at this time.

Sharing is caring
Finally, pharmaceutical giant Sanofi (NYSE:SNY) and RNAi-therapy developer Alnylam Pharmaceuticals (NASDAQ:ALNY) made waves on Monday by announcing a mammoth partnership. Under the terms of the deal, Sanofi will gain access to familial amyloidotic polyneuropathy drug patisiran, ALN-TTRsc, a midstage drug for familial amyloid cardiomyopathy, two additional early-stage compounds, and Alnylam's rare genetic disease drugs through 2020, in all areas of the world except for North America and Western Europe. In return, Sanofi will pay $700 million to take a 12% stake in the company at what was a closing price premium of 27% from the previous trading day (i.e., last Friday). While the deal makes a boatload of sense for Sanofi, which is struggling to expand its next-generation pipeline, the current valuation of Alnylam is enough to scare even the more risk-willing investors to the hills. From the perspective of Alnylam shareholders, I would suggest waiting until we have significantly later-stage data before getting too excited about this pact.

Alnylam may have soared this week, but it could have a hard time keeping up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar 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.

The Motley Fool owns shares of , and recommends Johnson & Johnson. It also recommends Alnylam Pharmaceuticals. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers