The broad-based S&P 500 (SNPINDEX:^GSPC) can't go up every day, can it? No. Unfortunately, no index is going to go straight up, but it's certainly felt that way for a while with the iconic index hitting a fresh all-time closing high in 10 of the past 13 sessions.


Most of the economic data released on this light day was generally positive and would have been conducive to push the index to another closing high. According to an early morning release from the U.S. Commerce Department, wholesale inventories rose 1.1% in April, matching the 1.1% gain in March. This increase was a bit more than economists had predicted and signals that businesses expect robust growth in the coming months (thus the increase in inventories).

However, even optimists need to step back and take profits now and then, and today appeared to be the perfect opportunity for them to do just that. By day's end the S&P 500 had dipped by a very subtle 0.48 points (-0.02%) to close at 1,950.79. Despite the dip, the biotech sector was a source of huge gains for investors looking for rays of sunshine on a moderately cloudy day.

Leading all individual companies to the upside today was Achillion Pharmaceuticals (NASDAQ:ACHN), which skyrocketed 83.3% (following yesterday's gain of 47.6%) after announcing a double-dose of good news. First, the Food and Drug Administration finally released its clinical hold on Achillion's lead drug sovaprevir, a potential treatment for hepatitis C, after elevated ALT liver enzymes were discovered in patients last year following a phase 1 study. According to Achillion's press release, the company will be allowed to continue once-daily dosing at 200 milligrams, a dose that was consistent with good tolerability in previous studies.

Also, Achillion noted that it would begin dosing genotype-1 HCV patients in a proof-of-concept phase 1 study utilizing ACH-3422, a uridine-analog nucleotide polymerase inhibitor. The seven-day treatment should yield reportable results for Achillion by the fall.

While this is clearly great news for existing shareholders, and it certainly lends credence to Achillion possibly being a buyout target with its lead drug now off clinical hold, I still can't help but be concerned about the fact that the company has yet to get any of its clinical products past midstage studies. Until that happens I'd suggest keeping your nose clean of Achillion.

Source: National Cancer Institute, Wikimedia Commons.

Following behind Achillion was clinical-stage biopharmaceutical company Receptos (NASDAQ:RCPT), which surged 36.8% after reporting positive phase 2 results for RPC1063, a treatment for relapsing multiple sclerosis. Based on the study data from its RADIANCE trial released after the closing bell last night, RPC1063 in both its 0.5 mg and 1 mg oral dose led to a statistically significant 86% reduction in gadolinium-enhancing brain lesions. Receptos has also been enrolling since December under a special protocol assessment that will compare RPC1063 to Biogen Idec's Avonex in a head-to-head phase 3 study involving 1,200 patients.

This is also good news for investors, but keep in mind that with a valuation near $900 million and only two investigational therapies in its entire pipeline, Receptos' room for error is shrinking with each tick higher in its share price. As such, I'd rather watch this company safely from the sidelines until after its phase 3 data is released.

Lastly, cancer immunotherapy drug developer Galena Biopharma (NASDAQ:GALE) saw its shares rocket higher by 16.8% despite no company-specific news today. Galena shares, however, have been practically unstoppable since releasing phase 1 study data last week. In that study, involving GALE-301, Galena noted that out of 30 enrolled patients with ovarian or endometrial cancer, seven out of 14 in the control arm had their cancer reoccur. Out of the 16 GALE-301 intent-to-treat patients, four had their cancer reoccur after completing the vaccine series, two had their cancer reoccur prior to completion, and one patient withdrew.

Possibly the biggest factor in today's continuation move higher for Galena is its nearly 23% short interest. A rapid increase in Galena's share price forces short-sellers to either endure the pain or cover their short shares, possibly sending Galena even higher.

I personally am keeping a close eye on Galena as its HER2-negative breast cancer adjuvant therapy NeuVax has the potential to put the company on the map, but until I see its phase 3 results I'm perfect satisfied sticking to the sidelines.

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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