Shocking Results Rock 5 Biotech Stocks

Everyone hold on tight, the biotech roller coaster is in fine form. Five stocks are experiencing the highs and lows of the sector thanks to several critical FDA decisions and trial results. Let's take a look at today's roller-coaster riders before diving into what is causing these pops and drops.

Index

Intraday % Change

Year-to-Date Performance

Market Cap

Onyx Pharmaceuticals (Nasdaq: ONXX  ) 43% 1% $4.0 billion
Chelsea Therapeutics (Nasdaq: CHTP  ) 24% (75%) $0.1 billion
Ligand Pharmaceuticals (Nasdaq: LGND  ) 12% 23% $0.3 billion
Pozen (Nasdaq: POZN  ) (16%) 89% $0.2 billion
Celgene (12%) (1%) $26.4 billion

Source: Yahoo! Finance and Finviz.com.

Three of these companies are tied together in one FDA advisory committee decision. Onyx is soaring because the panel voted overwhelmingly, 11-0 with one abstention, to recommend approval of Kyprolis to treat multiple myeloma. The drug will be used for patients who have failed other treatments, and it will cost a pretty penny. Assuming the FDA follows its committee's recommendation, that premium pricing will benefit royalty partner Ligand, which provides key ingredient Captisol. Onyx needs to be careful not to price Kyprolis out of what doctors feel is a justifiable range, or potentially suffer the same difficulties Dendreon (Nasdaq: DNDN  ) has seen with its prostate cancer vaccine Provenge.

Celgene's blockbuster Revlimid already treats multiple myeloma, so Onyx's improved chance at approval brings a potential new competitor. But Celgene also suffered its own setback today; EU officials are concerned about Revlimid's link to other cancers, causing the big biotech to remove its application expanding the drug's indication. Becoming a maintenance therapy could have significantly expanded Revlimid's potential, which explains the sell-off.

Chelsea Therapeutics recently tasted FDA rejection for NOH treatment Northera. The company thought it was a question of durability or efficacy, and was running trials to that end, but the FDA's concern came from one trial site contributing an overwhelming percentage of the positive results. Without that trial site, the drug would not have reached its primary endpoint successfully. With the FDA unwilling to accept Study 301 alone, Chelsea's results today are more about reassuring investors. The key thing to watch is a new trial the company is running that should wrap up early next year.

Pozen is down 16% after the FDA sent the company a letter disagreeing with its bioequivalence study for aspirin PA32540. The FDA is requesting that Pozen run an in vivo bioequivalence study for the combination product. The company will discuss the matter with the agency in the coming weeks, so investors should stay tuned as Pozen gets closer to filing its NDA.

For biotech investors looking for explosive growth but without the fear of FDA rejection, look no further. Motley Fool co-founder David Gardner has recently identified a small-cap health-care company poised for monster returns. To uncover this top pick today, enjoy the special free report: "Discover the Next Rule-Breaking Multibagger." Don't miss out on this limited-time offer and your opportunity to discover this game-changing company before the market does. Access your report -- it's totally free.

David Williamson owns shares of Dendreon, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Dendreon. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1920332, ~/Articles/ArticleHandler.aspx, 10/26/2014 3:39:55 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement