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Products, or DMEP, delayed its decision on whether to reinstate Vascepa's special protocol assessment, which was rescinded in October.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
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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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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