With the SPDR S&P Biotech Index up 62% 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.
One long-awaited approval
It only took seven years -- yes, seven years -- and three complete response letter rejections, but on Thursday the Food and Drug Administration finally approved Endo Health Solutions' (NASDAQ:ENDP) Aveed as a testosterone replacement therapy for men with hypogonadism. The efficacy of Aveed was never much of a question mark, but the FDA had been expressing concerns about the potential for serious adverse events with the once-every-10-week injection, such as anaphylaxis and pulmonary oil embolism. Following the FDA's guidelines for this fourth go-around, which included strict dosing guidelines, Endo Health Solutions and Aveed can now enter what is an incredibly crowded testosterone replacement market. This isn't to say this is bad news for Endo, but Aveed will have its work cut out for it to garner any significant market share. Aveed should be available by prescription in early March.
Possibly printing profits
This was also a big week for clinical data, with four companies delivering some form of clinical results. Two of them chose to put those results in print.
Rigel Pharmaceuticals (NASDAQ:RIGL), on Thursday, announced that the American Journal of Physiology had published select preclinical research results for its oral AMPK activator, R118. The publication notes that there is strong preclinical evidence that AMPK activation may be useful in treating peripheral artery disease, or PAD, a chronic disease affecting close to 5% of people over age 50. Separately, Rigel also announced that it had begun a phase 1 study of R118 as a treatment for intermittent claudication, which is a weakness, numbness, fatigue, or aching of the lower extremities that's caused by PAD. Shares of Rigel ended the week higher by 31%.
Sangamo Biosciences (NASDAQ:SGMO) also took to print on Wednesday in the New England Journal of Medicine with the publication outlining its zinc finger nuclease-based genome editing technology and experimental therapy SB-728-T as a therapy for HIV. The publication notes Sangamo's ZFN-technology can use T-cell genomes to mimic a natural mutation in the body, making the CCR5 gene resistant to the most common form of the virus. Data from additional trials has confirmed a number of cases of stable HIV disease levels in patients. While still incredibly early in the development process, this new way of approaching HIV treatment has the opportunity to completely change the way we treat HIV. It's a company worth keeping a close eye on.
Good, but not great
Sometimes "expected" results simply aren't what investors are expecting, as shareholders of NewLink Genetics (NASDAQ:NLNK) found out the hard way on Friday. Shares of the immunotherapeutic drugmaker fell 16% on Friday (and are down 37% over the past eight session) after announcing that the independent data safety monitoring committee had recommended that its IMPRESS study involving algenpantucel-L for pancreatic cancer continue without modification. This was the first planned interim analysis of two for this study, and investors had clearly been hoping that the DSMC would stop the trial early because of highly statistical significance. Since that didn't happen, investors are left wondering just how much of a statistical benefit algenpantucel-L will provide. Although NewLink isn't going to get an instant boost here, I would still recommend keeping a close eye on this company as its immunotherapeutic HyperAcute platform demonstrated a lot of promise in mid-stage studies.
Do not pass go. Do not initiate late-stage development.
The dubious honor of disaster du jour this week goes to XOMA (NASDAQ:XOMA), which, on Tuesday, provided a disappointing update on the development of gevokizumab. In its press release, XOMA announced that it would not be advancing gevokizumab into later-stage development as a treatment for erosive osteoarthritis of the hand based on clinical data, but was still reviewing that data to see if specific subsets of patients would benefit from further clinical studies. Gevokizumab is being studied in quite a few other indications, so the concern is front-and-center that this therapy may not work. What investors should keep in mind, though, is that different ailments can respond to the same therapy very differently. In my opinion, as long as gevokizumab shines in its ophthalmic disease targets, then XOMA should be OK. Shares of XOMA ended the week lower by 24%.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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