Biotech is notorious for clinical trial pipeline failures, and 2018 had its fair share of setbacks in that area.

In this clip from The Motley Fool's Industry Focus: Healthcare, analyst Shannon Jones and Todd Campbell discuss a few of the highest-profile clinical trial letdowns, including disappointments at Celgene (NASDAQ:CELG), Incyte (NASDAQ:INCY), and Geron (NASDAQ:GERN).

A full transcript follows the video.

This video was recorded on Dec. 12, 2018.

Shannon Jones: Todd, it would not be biotech if it weren't for the pipeline blow-ups and setbacks that always seem to happen. 2018 was no exception to that. There were some notable pipeline blow-ups this year.

Todd Campbell: We could have done an entire show on swings and misses. Unfortunately, it's just the nature of the beast in biotech. It's notorious for its failed trials. 90% of clinical trials end up failing to pan out. It's not shocking that there were a number of setbacks.

One that might have been a little shocking, we've talked about it on the show before, is Celgene's refuse to file letter that it got in February from the FDA for its arguably most important pipeline drug, Ozanimod, which is a drug that is hoping to be used in multiple sclerosis. It's an oral drug that would compete against Gilenia, which is a $3 billion plus drug. Celgene went out and paid $7 billion to land that drug. And everybody was looking forward to that one getting filed early this year, and then getting approved before the end of this year. Didn't happen. Unfortunately, the FDA looked at the application and said, "No. We can't review this. You're going to have to get together more information and resubmit it to us."

Jones: I think that's truly one of the more embarrassing stories of 2018. This is Celgene, this is one of the big biotechs that every little biotech hopes to become one day. So, to have that management misstep, to where there's not even enough evidence for the FDA to review to say that this drug is approvable, is unquestionably disappointing. I am encouraged, though, with Celgene. I know they've had some management shuffles throughout the year. I think they're getting back on track. But, certainly, that was one that had a lot of people scratching their heads.

The next one, we talked a little bit about. Of course, that was Incyte and their Phase III flop.

Campbell: Yeah, the IDO inhibitor being used with PD-1. That came up short in April. Obviously, that caused a big sell-off in Incyte shares, and it caused IDO programs at various different companies to get shuttered. That was a devastating blow.

But even more devastating than Incyte's failure was probably the news that J&J was abandoning development of Geron's Imetelstat, a therapy for myelofibrosis, myelodysplastic syndromes.

Jones: I know we've talked about this at length with Geron. This has been one of the more polarizing biotech stocks to watch. You definitely saw the red flags have been there leading up to this breakup with J&J. Ultimately, what you have now is Geron just holding on, hoping maybe a partner might come in. But really, their cash is dwindling. This will be a stock that, if I had to rank the ones that I don't think will make it, this would probably be near the top of that list.

Campbell: 2019 will be key. They could theoretically suffer a cash crunch by the end of next year. It'll be very interesting to see what they do with this drug. If J&J had gone forward, had taken this drug into Phase III, it would have been a huge payday. It'd be a very different story for investors in Geron. Geron shares lost 62% of their value when J&J walked away. I looked earlier this morning, only trading at $1.40 a share. That's down from $6 prior to the decision back in September. Obviously a big bummer for those shareholders.

The list goes on and on, though, Shannon. You hinted at the top of the show, Synergy Pharmaceuticals probably making that list even longer this year, this morning announcing that they're actually going to go and declare bankruptcy in order to sell their assets off to Bausch + Lomb for about $200 million. Synergy had launched a constipation drug to battle against Linzess, the top-seller in the indication. However, they had too much debt on the books, they weren't able to refinance that debt. With sales not ramping up nearly as quickly as was necessary, now, they've had to basically shut down their operations and fire sale the rest of their assets.

Jones: I'm sure there'll be many more to come in 2019.

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