Last week was an exciting one for anyone with shares of Arvinas (NASDAQ:ARVN) or Biogen (NASDAQ:BIIB) in their portfolio. Both soared more than 30% during the week ended Oct. 25, and investors who didn't have these rockets in their portfolio might feel they're missing out.

Purchasing biotech stocks simply because they're going up is a great way to lose a lot of money, but that doesn't necessarily mean these two won't climb further. Let's look at the recent events that made these stocks into top performers and see if they can do it again.

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1. Arvinas: Protein degradation

Shares of this biotech soared 38% last week, after the company gave investors their first look at clinical trial data produced by its potential first-in-class treatments. Arvinas is taking a different route and developing drugs that degrade troublesome proteins instead of simply inhibiting their activity. 

In March, Arvinas began treating people for the first time with ARV-110, a potential first-in-class protein degrader that targets androgen receptor (AR) proteins that are overactive in patients with prostate cancer. Today's prostate cancer treatments target AR, but they either limit the amount of testosterone available to activate it, like Xtandi, or attempt to block hormones from making contact with AR, like Zytiga. More often than not, sneaky tumors develop resistance to these drugs by dramatically increasing the amount of AR produced.

Removing troublesome proteins that drive tumor growth seems like an elegant solution for overpowering treatment-resistance mechanisms, but it could prove disastrous if ARV-110's protein-degrading activity isn't limited to AR. Arvinas stock soared last week because a dose determination study showed ARV-110 was unusually well tolerated for a cancer drug, at least for the first three groups given ascending dosages.

Safety's important, but we still don't know if ARV-110 actually works in humans. Arvinas will try higher dosages and share efficacy results in the first half of 2020. By the end of next year, we should also have efficacy results for ARV-471, a protein degrader for breast cancer patients that began its first clinical trial in August. 

If Arvinas can produce proof of efficacy along with the remarkable safety data we've already seen, its stock will skyrocket, but that's a lot to ask for. It's probably best to keep this stock in a watchlist until we know the company's newfangled treatment method actually shrinks tumors.

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2. Biogen: An interesting discovery

This former top-performing biotech stock jumped 31% higher last week, after the company revived aducanumab, an Alzheimer's disease (AD) candidate that had been left for dead earlier this year. Millions of AD patients and their caregivers are still waiting for the first disease-modifying treatment for this ultimately fatal form of dementia, and peak sales estimates for such a drug begin at $10 billion annually. 

Biogen enrolled around 3,215 patients into a pair of identical phase 3 studies called Engage and Emerge, which tested two doses of aducanumab versus a placebo. Once 1,748 of them had been treated for at least 18 months, the study's independent data monitors performed a futility analysis that said there wasn't any chance of success. The trials were halted a few months after the data cutoff date used for the futility analysis, and by then 2,066 patients had been treated for at least 18 months.

After months of analyzing the extra data, Biogen decided that the effort wasn't futile, because AD patients treated with the highest dosage in the Emerge study showed 23% less cognitive decline than the placebo group. Unfortunately, patients treated with the same dosage in the identical Engage study fared slightly worse than the placebo group when measured with the same yardstick.

Biogen will submit an application based on the new data from the Emerge trial while hoping the FDA ignores results from Engage. The company backed up the decision with a weak argument commonly espoused by desperate clinical-stage biotechs when they're hanging by a thread. According to Biogen, the FDA essentially said that if the company wants to send in an application along with the standard $2,942,965 prescription drug user fee, the agency would be happy to accept the fee and give said application a thorough review.

Biotech investors need to understand that the FDA will accept user fees for nearly any new drug application that ticks the required boxes, even if its flaws are painfully obvious. That rarely stops companies without any products to sell yet, but investors can usually expect profitable industry giants like Biogen to quietly scuttle programs with dismal odds of approval.

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Looking out

The FDA will most likely tell Biogen it has enough data to warrant another phase 3 trial, and that's all. At recent prices, Biogen's shares can be purchased for the ultra-low price of just 8.7 times forward earnings expectations, but the company's recent behavior is a blinking red flag that investors ignore at their own peril. 

While Biogen's recent gains will be short-lived, Arvinas' protein-degrading candidates are still a black box. That said, Arvinas stock still has a better chance to continue climbing through 2020 than Biogen shares.