With the SPDR S&P Biotech Index up 19% 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.
As to be expected during a very volatile week, we had a smattering of good and bad news with regard to clinical trials in the biotech sector.
Nektar Therapeutics (NASDAQ:NKTR) delivered a double-digit gain for shareholders this week after reporting positive top-line data for NKTR-181, its oral chronic pain-treatment drug. NKTR-181 is an opioid-based compound that's designed to enter the brain slower than traditional opiates like oxycodone without sacrificing effectiveness and ultimately reducing addiction-like qualities to the medication. In trials, the data demonstrated that NKTR-181 had a statistically significant lower "drug liking" and "feeling high" score than oxycodone. While I'd certainly exercise caution in getting too excited, as the Food and Drug Administration is very harsh with regard to its regulation of opioid-based drugs, it's nonetheless good news for Nektar.
Shareholders in Novartis (NYSE:NVS) also have a reason to rejoice this week following an announcement from the FDA that its investigational acute heart failure drug, RLX030, also known as serelaxin, had been granted the "breakthrough therapy" designation. The FDA's decision to grant this status for Novartis' heart failure drug was based on having demonstrated in phase 3 trials a 37% reduction in mortality six months after an acute heart failure episode, compared with patients receiving standard treatment. The breakthrough therapy designation should allow it an expedited pathway to approval, assuming it continues to demonstrate safety comparable with the placebo in trials.
It certainly wasn't smiles for everyone on the clinical front, though, as Idenix Pharmaceuticals (UNKNOWN:IDIX.DL) took a late-week 31% tumble after announcing that the FDA was requesting additional safety information about its preclinical investigational hepatitis-C drug, IDX20963. As my Foolish colleague Brian Orelli noted, it's not exactly clear what information the FDA is looking for, but this inquiry puts a hold on Idenix's starting clinical trials until it satisfies the requests of the FDA. This marks the third pipeline candidate that's been placed on clinical hold in just the past year and could be the last straw for fed-up investors.
Beyond clinical data, rare disease-focused biopharmaceutical company ViroPharma (UNKNOWN:VPHM.DL) rose after a Reuters report noted multiple unnamed pharmaceutical companies showing early interest in acquiring the company. Although ViroPharma itself may not be interested in selling itself, big pharmaceutical companies with aging pipelines certainly have to like the way sales of hereditary angioedema drug Cinryze have exploded higher. In addition, ViroPharma received orphan drug status in Europe for maribavir, its anti-cytomegalovirus drug, just over a week ago. Even if a buyout isn't on the table, there are plenty of reasons ViroPharma should be on your Watchlist.
Last, but certainly not least, Johnson & Johnson (NYSE:JNJ) made waves by announcing the acquisition of Aragon Pharmaceuticals for $650 million upfront, with the potential for an additional $350 million in royalty payments, to get a hold of its clinical-stage metastatic prostate cancer drug, ARN-509. The move is particularly intriguing because J&J already has an FDA-approved drug for advanced prostate cancer in Zytiga. This could signal J&J's expectations that the prostate cancer market is growing rapidly enough that it can accommodate what could wind up being a few potential blockbuster treatments without getting overcrowded.