With the SPDR S&P Biotech Index up 48% 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.

An eight-year wait
It's been eight years of clinical trials! In that time MannKind (MNKD 1.24%) has received a complete response letter, and completely revamped its phase 3 study of investigational inhaled insulin medication Afrezza. Yesterday, MannKind finally received approval from the Food and Drug Administration to market Afrezza to type 1 and type 2 diabetics.

Source: MannKind.

On one hand, this represents a victory for diabetics and for investors. Afrezza is a fast-acting inhaler that reaches peak insulin levels far quicker than an insulin injection. It's also considerably more convenient than an injection, meaning diabetic patient quality of care may improve. For MannKind it gives the company fuel for the fire to seek out a partner and generate revenue to help offset research and development costs for the inhaled compound.

However, Afrezza's approval also came with a boxed warning label that persons with chronic lung conditions such as asthma and chronic obstructive pulmonary disorder, or COPD, shouldn't use it since it was shown in trials to cause breathing spasms in select patients. In addition, the FDA cautioned that smokers not take Afrezza, either.

To add, there are a lot questions left to be answered, such as what sort of market will be left after smokers and asthma/COPD sufferers are removed, and what will MannKind price Afrezza at? Its shrinking cash balance is another serious concern.

The best way I can describe MannKind right now is "cautiously optimistic."

Aside from MannKind's late approval, the week was dominated by four successful clinical trial updates.

Breathe easier Vertex shareholders
Perhaps none was more vaunted than Tuesday's surge by Vertex Pharmaceuticals (VRTX -0.27%), which gained upwards of $6 billion in market value after announcing positive phase 3 results from two trials involving the combo of VX-809 and FDA-approved Kalydeco as a treatment of cystic fibrosis patients with two copies of the F508del mutation, the most common form of CF.

As Vertex noted in its TRAFFIC and TRANSPORT studies, all four treatment arms in the 24-week study demonstrated a statistically significant improvement in forced expiratory volume in one second, or FEV1. Specifically, there was a mean absolute improvement in percent predicted FEV1 of between 2.6 and 4 percentage points from baseline relative to the placebo. Following this data Vertex announced its intentions to seek U.S. and EU approval in the fourth quarter. Keep in mind that trial success is only half the battle for biopharmaceutical companies these days which also have to worry about successfully launching their drug. However, as of now the chance for a U.S. approval appears pretty good.

And just to add icing on the cake for Vertex investors this week, on Friday morning the company announced a positive opinion by Europe's advisory panel on Kalydeco to treat CF patients who have one of eight non-G551D gating mutations. 

I can see clearly now
Clinical-stage biopharmaceutical company Aerie Pharmaceuticals (AERI) gave investors something to cheer about this week when it announced positive phase 2b data for roclatan, an investigational treatment for glaucoma.


Source: Orbis, Flickr.

In its studies, roclatan outperformed all other controls, including latanoprost, which is the generic name for Xalatan, the most commonly prescribed glaucoma medication. Based on the results, roclatan hit all of its clinical endpoints, including reducing diurnal intraocular pressure by 34% from baseline at day 29 – and it did so with minimal adverse events. Aerie anticipates moving forward with phase 3 studies of roclatan and, if all goes well, filing for a new drug application by mid-2016.

Given that Aerie's roclatan outperformed the top-selling glaucoma drug on the market at every step along the way instantly makes it a developing therapy to watch. However, ensure that you don't get too caught up in any of the recent emotional trading in Aerie's shares. Management has cautioned that we're two years away from an NDA filing at the earliest, and nearly three away from a possible FDA approval. With few catalysts in the offing, Aerie's recent run higher may soon fizzle out. 

"Ultra"-positive data
On Tuesday, Ultragenyx Pharmaceuticals (RARE 4.25%) delivered positive phase 1/2 data from its study of investigational subcutaneous anti-FGF23 monoclonal antibody KRN23 as a treatment for X-linked hypophosphatemia, or XLH. XLH is an inherited metabolic bone disease that can cause skeletal pain and bowed legs.

Ultragenyx's KRN23 was tested in 28 patients and over a four-month period led to serum phosphorous increases in every single patient! In total, 89% of patients reached the low-end of the normal range for serum phosphorous, potentially signaling that KRN23 works at any stage of XLH (i.e., newly diagnosed or lifelong sufferer). Ultragenyx and its trial partner Kyowa Hakko Kirin Pharma which conducted the study plan to move the development of KRN23 forward in adults and also plan to test KRN23 on pediatric patients in a phase 1/2 study later this year.

To echo a similar theme this week, while this data is notably positive, at a valuation of more than $1.3 billion, and as a wholly clinical-stage company, Ultragenyx's valuation may already be too frothy at these levels to be considered as a viable investment opportunity.

Source: ZaldyImg, Flickr.

Clinically impressive
Lastly, clinical-stage biopharmaceutical company Agenus (AGEN -14.29%) briefly surged intraday on Thursday after it reported positive phase 2 data on its synthetic vaccine HerpV as a treatment for patients with genital herpes simplex virus-2, or HSV-2. As Agenus' press release noted, "more than half of those vaccinated developed a robust anti-HSV cytotoxic T-cell immune response, and in those patients there was a statistically significant 75% reduction in viral load." Furthermore, Agenus also pointed out that durable viral shedding of approximately 14% was noted after the six-month booster vaccinations, signaling that HerpV has a potentially long-lasting effect on viral load reduction.

This data comes on the heels of additional positive data released in November which demonstrated a 34% reduction in viral load for HerpV. However, this study also had a particularly high p-value of 0.08, which means chance could have played a big enough role to modestly cloud HerpV's viral load-reducing effectiveness. As I noted on Thursday, this drug could still prove to be wildly successful, but I'm going to need to see a larger patient pool of data before I'm sold on its efficacy.