Everyone hold on tight, the biotech roller coaster is in fine form. Five stocks are experiencing the highs and lows of the sector thanks to several critical FDA decisions and trial results. Let's take a look at today's roller-coaster riders before diving into what is causing these pops and drops.


Intraday % Change

Year-to-Date Performance

Market Cap

Onyx Pharmaceuticals (Nasdaq: ONXX) 43% 1% $4.0 billion
Chelsea Therapeutics (Nasdaq: CHTP) 24% (75%) $0.1 billion
Ligand Pharmaceuticals (Nasdaq: LGND) 12% 23% $0.3 billion
Pozen (Nasdaq: POZN) (16%) 89% $0.2 billion
Celgene (12%) (1%) $26.4 billion

Source: Yahoo! Finance and Finviz.com.

Three of these companies are tied together in one FDA advisory committee decision. Onyx is soaring because the panel voted overwhelmingly, 11-0 with one abstention, to recommend approval of Kyprolis to treat multiple myeloma. The drug will be used for patients who have failed other treatments, and it will cost a pretty penny. Assuming the FDA follows its committee's recommendation, that premium pricing will benefit royalty partner Ligand, which provides key ingredient Captisol. Onyx needs to be careful not to price Kyprolis out of what doctors feel is a justifiable range, or potentially suffer the same difficulties Dendreon (Nasdaq: DNDN) has seen with its prostate cancer vaccine Provenge.

Celgene's blockbuster Revlimid already treats multiple myeloma, so Onyx's improved chance at approval brings a potential new competitor. But Celgene also suffered its own setback today; EU officials are concerned about Revlimid's link to other cancers, causing the big biotech to remove its application expanding the drug's indication. Becoming a maintenance therapy could have significantly expanded Revlimid's potential, which explains the sell-off.

Chelsea Therapeutics recently tasted FDA rejection for NOH treatment Northera. The company thought it was a question of durability or efficacy, and was running trials to that end, but the FDA's concern came from one trial site contributing an overwhelming percentage of the positive results. Without that trial site, the drug would not have reached its primary endpoint successfully. With the FDA unwilling to accept Study 301 alone, Chelsea's results today are more about reassuring investors. The key thing to watch is a new trial the company is running that should wrap up early next year.

Pozen is down 16% after the FDA sent the company a letter disagreeing with its bioequivalence study for aspirin PA32540. The FDA is requesting that Pozen run an in vivo bioequivalence study for the combination product. The company will discuss the matter with the agency in the coming weeks, so investors should stay tuned as Pozen gets closer to filing its NDA.

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