With the SPDR S&P Biotech Index up 48% 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.
Despite the shortened week, it was nonetheless a busy one, with clinical data, FDA actions, and even legalities playing into some of this week's biggest moves. As always, let's have a look at some of the more positive stories to start us off!
What's popping
Perhaps nothing was more exciting this week than the approval by the Food and Drug Administration of United Therapeutics' (UTHR 0.17%) Orenitram (previously known as treprostinil) for the treatment of pulmonary arterial hypertension. The approval of this oral medication marks United Therapeutics' fifth PAH-approved therapy and is slowly helping to build a base that could make United Therapeutics the go-to provider of PAH therapies. One thing you should keep in mind, though, is that United Therapeutics' marketing practices are currently being investigated, so you may want to temper your optimism for the time being.
Also benefiting from the approval is Supernus Pharmaceuticals (SUPN 0.81%), which helped develop this oral extended-release formulation of Remodulin. Supernus is on track to receive a $2 million milestone payment, as well as single-digit royalties, from the sale of the Orenitram.
Specialty biopharmaceutical company Aratana Therapeutics (PETX) which is a clinical-stage developer of therapies to treat pets, moved higher by 14% on the week after announcing that it had met its 2013 development goals and providing additional data on its existing pipeline. The biggest boost came from additional data in its osteoarthritis study involving client-owned dogs that showed AT-001 delivered a clinical success rate of 61.6%, compared with just 42.2% in the placebo arm. Aratana also noted that it's begun enrolling client-owned dogs in a study of its inappetence drug (AT-002), with top-line results expected by the first-half of 2015. Aratana is clearly a way off from a full-fledged pet-based pharmaceutical pipeline, but the allure remains there with people willing to spend a proverbial arm and a leg on the health of their pets.
As I mentioned previously, "legalese" also played into this week's moves, with Idenix Pharmaceuticals (NASDAQ: IDIX) continuing to rocket higher following the approval of Gilead Sciences Sovaldi a little more than two weeks ago. Idenix, which is attempting to develop its own hepatitis-C pipeline, filed to two claims against Gilead alleging that it infringed on Idenix's patents. Three weeks ago, the U.S. Patent and Trademark Office declared Idenix the senior party in one of the patent interference cases, implying that the burden of proof is on Gilead to demonstrate that it developed the questioned patent first, otherwise it could be liable for a settlement or royalty payments to Idenix. With Idenix's pipeline an absolute mess, this could be Idenix's best chance at creating value for shareholders.
What's dropping
Of course, it certainly didn't feel like a holiday weekend for shareholders of clinical-stage cancer and cancer-ailment therapy company Tesaro (NASDAQ: TSRO), which shed 26% this week after reporting its results from two late-stage trials involving rolapitant for the prevention of chemotherapy-induced nausea and vomiting, or CINV. Although Tesaro met the primary endpoint in both trials of inducing a complete response (i.e., no vomiting or need for a rescue medication) during the delayed period (24 to 120 hours after initiating treatment), rolapitant didn't demonstrate statistical significance in any of its secondary endpoints. Wall Street was counting on these secondary endpoints to help differentiate Tesaro from the current standard of treatment for CINV, Merck's Emend. Without that clearly positive data, rolapitant's upside may be limited.
Finally, Takeda Pharmaceuticals delivered its second disappointment of the month late in the week by noting that it was going to scrap the development of TAK-875, also known as fasiglifam, for the treatment of diabetes after independent trial monitors noted a high degree of liver toxicity in trial patients. In a statement from Takeda, it noted that "the benefits of treating patient with fasiglifam do not outweigh the potential risks." Following the loss of diabetes blockbuster Actos to patent expiration in 2012 and being thrown a curveball in its attempt to get vedolizumab approved because of concerns about an increased risk of progressive multifocal leukoencephalopathy two weeks ago, this has been a month to forget for Takeda and its shareholders.
