This Week in Biotech: Actions Speak Louder Than Words

Regulatory actions provided the impetus to big moves for these five biotech stocks.

Jun 14, 2014 at 11:20AM

With the SPDR S&P Biotech Index up 39% 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.

Normally we look at five or six of the biggest stories of the past week. With earnings reports out of the way the floodgates opened and 11 (yes, eleven!) important events transpired this week, and we're going to cover them all.

In part one of "This Week in Biotech" we'll look at how regulatory actions shaped the week for a handful of companies, while part two will focus on a number of clinical actions and a major buyout that sent some stocks soaring and others reeling during the past week.

Source: Pan American Health Organization, Flickr.

Given the green light
It's a rare week when even one biopharmaceutical company has a clinical hold lifted by the Food and Drug Administration. This week, we had two!

Perhaps no company saw a greater benefit from its clinical hold being lifted than Achillion Pharmaceuticals (NASDAQ:ACHN) whose shares essentially tripled at one point this week following the OK to resume trials for lead compound sovaprevir. If you recall, sovaprevir was placed on clinical hold almost a year ago after elevated ALT liver enzyme levels were discovered in phase 1 patients. The resumption of this study could put the company on the fast path to being the next biotech buyout with big pharma looking at all avenues of growth in the hepatitis C market. I would, however, suggest that investors exercise extreme caution as Achillion has yet to advance any of its studies beyond phase 2, and by the time sovaprevir makes it to market (if it's even approved) both of its major peers will have likely established themselves as blockbuster players with most of the market share.

Also joining the green light crowd, at least partially, was clinical-stage biopharma Geron (NASDAQ:GERN) which was advised by the FDA that its investigator sponsored trial involving imetelstat for myelofibrosis would be allowed to continue. Imetelstat was placed on partial clinical hold in its IST by the FDA in March following concerns with regard to the reversibility of patient liver damage. After the Mayo Clinic's lead investigator provided the FDA with additional information the regulatory agency gave its OK to continue with its study. On one hand, Geron's imetelstat is extremely intriguing in that it's the first investigational therapy to show clinical benefits in treating myelofibrosis and delivering partial responses in its IST rather than simply mitigating symptoms. However, Geron's pipeline lacks depth, and its full clinical hold pertaining to its in-house studies for polycythemia vera and multiple myeloma remains in place. It's another stock I'm perfectly happy to watch from afar.

Go for launch
Small-cap Navidea Biopharmaceuticals (NYSEMKT:NAVB) waited until the end of the week, but the fireworks certainly hit the skies on Friday with more than 6 million shares trading hands after it announced the FDA approval of its supplemental new drug application for Lymphoseek as a sentinel lymph node biopsy radiopharmaceutical agent for squamous cell carcinoma of the oral cavity. In English, this just means physicians have a better way of diagnosing cancer-positive lymph nodes in early stage oral squamous cell carcinoma as opposed to surgical biopsies and excisions. The approval should help improve Lymphoseek's sales potential and will hopefully move Navidea closer to profitability, which I suspect is still a few years off.

Get out of jail free card
Also waiting until the end of the week to dole out good news was Nektar Therapeutics (NASDAQ:NKTR) which on Friday confirmed that the FDA's Anesthetic and Analgesic Drug Products Advisory Committee voted against a proposal that would have required all opioid-induced chronic constipation drug developers to run long and expense cardiovascular outcomes trials on their respective therapy. Nektar's investigational drug Movantik is part of the OIC constipation crowd, and the FDA panel's vote against a full-length CV study clears a path for its potential approval (it's under review in the US, EU, and Canada at the moment). With an extensive clinical, preclinical, and royalty-based product pipeline, Nektar is the type of hedge bet that biotech-savvy investors should really dig a bit deeper into.

Red light
Lastly, Orexigen Therapeutics' (NASDAQ:OREX) shareholders ducked and covered this week after the FDA announced a three-month extension to its PDUFA decision date for Contrave to Sept. 11. The reasoning behind the extension was to allow Orexigen time to complete the post-marketing obligations tied to its 8,900-person cardiovascular outcomes study known as the Light Study. In an interim analysis late last year the Light Study demonstrated no abnormal adverse events from the Contrave intent-to-treat arm compared to the control arm, which may give the company a clean path for approval, assuming it can indeed provide the data the FDA wants to see in time. With neither of its weight control management peers performing well in the early going investors are anxiously waiting to discover what will happen with Contrave's second go-around in front of the FDA. Orexigen's shares fell 10% for the week.

Stay tuned for Part 2 of "This Week in Biotech," where we'll look at five clinical studies and a surprising buyout that made waves within the sector last week.

If you think these regulatory actions can lead to big gains, just wait until you get a gander at this huge small-cap opportunity
This smart device -- kept secret until now -- could mark a new revolution in smart tech (with big implications for health care). It's a gigantic market opportunity, as ABI Research predicts 485 million of its type will be sold per year. To learn about the small-cap stock making this device possible -- the stock that could mint millionaires left and right when its full market potential is realized -- click here.

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 has no position in any of the stocks mentioned. 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

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, 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

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