Image Source: Celgene Corporation

Did the biotech industry have a good or bad year in 2015? Probably the best answer is "both." Halfway through 2015, biotech was booming. A couple of months later, though, investors were talking about a bear market for the industry. As the year winds down, things are looking up yet again. What happened in biotech during 2015? Here are three of the top stories.

1. Politics
That great first half of 2015 for biotech stocks fizzled in part because of a downright hostile political environment. Concerns about sky-high drug prices certainly aren't a recent development. Gilead Sciences (GILD -0.25%), for example, encountered a big backlash over pricing of its hepatitis C drugs Harvoni and Sovaldi last year. But 2015 brought the price issue to a boiling point.

Image Source: Wikimedia Commons

Turing Pharmaceuticals received heavy criticism when the company hiked the price tag of Daraprim, a drug that has been around for over 60 years, from $13.50 per tablet to $750. Democrat presidential candidate and former Secretary of State Hillary Clinton accused the company of price gouging in a tweet. One day later, Clinton unveiled a plan to control prescription drug prices, with language attacking "excessive profiteering" by drug companies. Biotech stocks plummeted.

One biotech particularly felt the brunt from these and similar accusations. Valeant Pharmaceuticals (BHC -0.64%) shares had already begun to fall after Clinton's comments but absolutely tanked after Democrats in the House of Representatives pushed to subpoena the company's documents related to drug price increases. Valeant's market cap plunged more than 70% over the following weeks as even more issues emerged.

While Valeant's shares have begun to claw their way back a little, the drug pricing issue still hovers over the company. It's an issue that isn't likely to go away anytime soon for many biotechs.  

2. Buyouts
Every year seems to bring at least one big acquisition in the biotech world, and 2015 was no exception. There were quite a few key buyouts -- but none that made as much of a stir as Celgene's (CELG) acquisition of Receptos for $7.2 billion.

Usually when a buyout is announced, the stock of the company being acquired shoots up. And that happened for Receptos. However, the striking thing about this deal was that Celgene's stock jumped 7% on the news. That reaction from investors underscores just how smart this buy was for Celgene.

Ozanimod ball-and-stick model.Image Source: Wikimedia Commons

With the Receptos acquisition, Celgene added Ozanimod to its stable of drugs. Ozanimod, which is in late-stage clinical trials, targets treatment of ulcerative colitis and relapsing multiple sclerosis, and could eventually bring in annual sales of as much as $6 billion if approved. If all goes well, Ozanimod could hit the market as a treatment for relapsing multiple sclerosis in 2018. 

3. Approvals
Buyouts and politics can generate plenty of headlines, but biotechs are in business to develop and sell drugs. That selling can't happen unless a biotech manages to get its drugs approved by regulators. 2015 saw its fair share of significant approvals. Which was the most important approval of the year? My vote is for the new class of cholesterol drugs known as PCSK9 inhibitors.

Image Source: Sanofi/Regeneron

In July, Sanofi (SNY -0.11%) and Regeneron (REGN -0.58%) won the first FDA approval for a PCSK9 inhibitor for Praluent. Between 8 million and 10 million patients in the U.S. have a genetic condition that leads to high cholesterol levels that often can't be lowered by statins. PCSK9 inhibitors can potentially help these patients.

Estimates for peak annual sales for Praluent vary widely -- from $2 billion to more than $5 billion. However, Praluent and other PCSK9 inhibitors, including Amgen's (AMGN -0.19%) Repatha, face resistance from payers concerned about high prices.  

Looking ahead
2016 is an election year in the U.S. Look for the politics of drug prices to remain a hot-button issue. Biotechs with high-priced specialty drugs could experience considerable volatility in their stock prices as a result.

Will the New Year bring more merger and acquisition activity? You can pretty much count on it. Celgene and Gilead by themselves have more than $23 billion in cash stockpiled. I suspect they will spend some of that money in 2016 buying smaller biotechs.

As for regulatory approvals next year, I'm especially interested in the fate of Gilead's Sovaldi/velpatasvir combo. The FDA is scheduled to make its decision on the treatment by June 28, 2016. If that treatment is approved, Gilead will have the first all-oral, single-tablet regimen for treating every type of hepatitis C. 

I'll even make a prediction for the New Year: It will be both good and bad for biotech. Just like 2015 -- but with its own twists and turns.