With the SPDR S&P Biotech Index up 32% 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.

Just as we've seen in previous weeks, it was relatively quiet in the beginning, but wow, did things pick up in a big way on Friday. In fact, Friday is the basis for this week's three most important biotech stories.

On the bright side, GlaxoSmithKline (NYSE:GSK) and Theravance (NASDAQ: THRX) received a much-expected drug approval for once-daily inhaled COPD maintenance treatment Breo Ellipta from the Food and Drug Administration. Having proved non-inferior to the placebo in trials, and delivering a favorable safety profile while reducing flare-ups and helping relieve air flow obstruction, Breo Ellipta has a good shot at being a blockbuster drug within the next couple of years. Breo Ellipta is expected to be available to patients next quarter. In addition, as I've alluded to on numerous occasions, it could be the impetus that encourages Glaxo to gobble up Theravance's Royalty Management -- one of two proposed entities that Theravance plans to split into. This is certainly a big win for both companies.

However, all isn't well when it comes to the future of abuse-resistant painkiller Remoxy, which was developed by Pain Therapeutics (NASDAQ: PTIE), using Durect's special technology-based gel capsule to prevent abuse, and is licensed by Pfizer (NYSE:PFE). Remoxy has been rejected twice by the FDA -- the most recent coming in mid-2011 -- and Pfizer commented this morning that if it were to seek reapproval for the drug it wouldn't be for at least two more years. Given Pfizer's extensive product pipeline, losing Remoxy wouldn't be a big deal. For micro-cap clinical-stage companies like Pain Therapeutics and Durect, it'd be a gigantic blow. Fittingly, Pain Therapeutics and Durect shares imploded by 50% and 34%, respectively, on Friday.

Finally, Eli Lilly (NYSE:LLY) broke the stalemate in favor of the pessimists this week, when it announced that it'll be discontinuing the study of late-stage experimental kinase inhibitor enzastaurin as a second-line treatment for diffuse large B-cell lymphoma. According to Eli Lilly, the drug failed to provide a statistically significant improvement in disease-free survival relative to the placebo. Lilly expects to take a $30 million writedown related to the discontinuation of its study. With late-stage failures piling up for Eli Lilly (let's not forget how disappointing the results were for its late-stage Alzheimer's drug solanezumab) and patent expirations growing in number, I still feel confident in labeling Lilly pharma's most perilous pipeline.

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