With the SPDR S&P Biotech Index up 75% 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 a quick note, if you dislike good news turn back now, because I have a heavy dose of positive data to report this week!

An A-OK from the FDA
We received not one, but two approvals from the Food and Drug Administration this past week.

First up, on Tuesday the FDA approved AstraZeneca (NASDAQ:AZN) and Bristol-Myers Squibb's Myalept (previously metreleptin) as an adjunct therapy to treat leptin deficiency complications in patients with congenital or acquired generalized lipodystrophy (LD). The approval was no sure thing, with the Endocrinologic and Metabolic Drugs Advisory Committee splitting its view on what indications metreleptin should be approved for -- recommending against approval in treating partial LD while favoring approval in generalized LD. AstraZeneca will soon have all rights to Myalept under its acquisition of Bristol-Myers diabetes alliance assets, but its limited approval (generalized LD, not partial LD), may cap its peak sales potential around, or just over, $100 million in my opinion.

Anika Therapeutics (NASDAQ:ANIK), on the other hand, had a much different reaction, soaring to the upside by as much as 52% on Wednesday after the FDA approved its single injection supplement to synovial fluid to improve joint mobility and reduce pain for patients with osteoarthritis of the knee. The injection, known as Monovisc, will entitle Anika to a $5 million royalty payment upon its first commercial sale through partner DePuy Synthes, a division of Johnson & Johnson, and has the opportunity to earn more royalties and other sales threshold milestones. However, shares have already backed 25% off those highs set intraday on Wednesday as the reality of Anika's valuation versus its current sales potential sunk in with investors. Another 10%-20% more downside (i.e. a valuation of sub $500 million) and I'd consider myself intrigued.

A trio of clinically impressive results
No discussion of clinical data releases can begin without first discussing InterMune (NASDAQ:ITMN.DL) which rocked Wall Street with a gain of 171% on Tuesday after a late-stage study of pirfenidone (known as Esbriet in Europe) met its primary and secondary endpoints in treating idiopathic pulmonary fibrosis, or IPF. Overall, pirfenidone reduced the risk of death or disease progression by 43% relative to the control arm, and delivered a 48% reduction in the number of patients who had a 10% decline in forced vital capacity or death in the study compared to the placebo. InterMune notes that it plans to file for a new drug application for pirfenidone in the third-quarter. Having been rejected once previously, I don't believe there's much of a way for the FDA to turn away InterMune's IPF drug now. However, I would also suggest keeping your expectations in check given that pirfenidone sales should peak, according to RBC Capital analyst Michael Yee, at $300 million to $500 million. This would make InterMune's current valuation of $2.7 billion perhaps a bit frothy.

Small-cap biopharma Hyperion Therapeutics (NASDAQ: HPTX) also jumped on the bandwagon by posting positive phase 2 data for glycerol phenylbutyrate, or GPB, as a treatment for hepatic encephalopathy, or HE, in the March issue of Hepatology. As noted in the publication, GPB reduced the proportion of patients experiencing an HE event in studies (21% versus 36%), and prolonged the length of time it took for patients to experience their first HE event (i.e., a degradation in brain function due to reduced liver function). With a hazard ratio that implied a 44% clinical risk reduction in first-time HE events, Hyperion's GPB will be moving onto phase 3 trials later this year or in early 2015.

Finally, Pacira Pharmaceuticals (NASDAQ:PCRX) on Wednesday announced that Exparel, a therapy for femoral nerve block for total knee arthroplasty, had met its primary efficacy endpoint in a late-stage trial. Currently Exparel is approved by the FDA as a postsurgical analgesic via a single-dose injection into a surgical site. Pacira's results showed that Exparel demonstrated statistical significance for cumulative pain score over a 72-hour period in the study, giving it more than enough reason to file for a supplemental new drug application next quarter. Similar to the above two companies, with Pacira valued at roughly four times the peak sales estimates of Exparel, it might be wise to consider taking some money off the table here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.