With the SPDR S&P Biotech Index up 26% year to date, it's very 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.
I wish I could say I had plenty of positive news from the biotech sector to make up for the plethora of bad news coming out of the East Coast from Hurricane Sandy, but it was predominantly a bad week across the board.
Cornerstone Therapeutics (NASDAQ: CRTX) surprised absolutely no one when it announced on Thursday that it had received a complete response letter back from the Food and Drug Administration requesting additional clinical trials and information on Lixivaptan, its hyponatremia drug. Lixivaptan failed to impress the FDA panel during clinical trials and got a unanimous panel rejection as a recommended treatment for patients suffering from heart failure. In short, it's back to the drawing board for Cornerstone, but at least its shares declined by only 2% on the shortened week.
Both BioCryst Pharmaceuticals (BCRX -3.88%) and Pain Therapeutics (NASDAQ: PTIE) suffered much larger haircuts.
BioCryst shed a staggering 37% on the week after announcing that it will withdraw its regulatory application for BCX5191, an experimental treatment for hepatitis C, after concerns were raised over the drug's safety and toxicity. BioCryst plans to test the drug at lower doses in animals and hopes to eventually resubmit BCX5191 for regulatory approval in the future assuming it proves effective at lower doses.
Pain Therapeutics was truly the disaster du jour of the week, ending lower by 38%, following comments from its marketing partner Pfizer that it intends to carry out additional safety tests on Pain Therapeutics' painkiller drug, Remoxy. New questions over Remoxy's safety, as well as a delay in bringing the drug to market, aren't sitting well with shareholders.
Even VIVUS (VVUS) fell under the wheels of the bus this week after a report from TheStreet.com implied that it could fall well short of its sales estimates for its anti-obesity drug Qsymia this quarter. According to the health-care research firm IMS Health, physicians have written 5,802 prescriptions for Qsymia since it launched, and VIVUS has recommended each physician write two separate prescriptions (each with a different dosage) for each patient. Thus, the roughly 2,900 patients that have been written a prescription would be well below the 59,600 patients that the average Wall Street estimate currently implies. Ouch!
Finally, as one ray of sunshine on a dismal week of news, Dendreon (NASDAQ: DNDN) showed signs of life by reporting improved sales of its Provenge late-stage prostate cancer treatment for the third quarter. Sales improved by 27% over the previous year (although they did fall from the second quarter), and Dendreon noted that cost-cutting measures have it on pace to save $150 million annually when it's finished cutting jobs and making itself more operationally efficient. This may be the beginning of a turnaround for Dendreon.
A good way to end a bad week
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