With the SPDR S&P Biotech Index up 40% 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.
Yet again, this week was absolutely dominated by earnings-driven events. Given that we at the Fool have covered many of these stories already this week I want to instead focus on five non-earnings driven events that caught my attention.
As I prefer to always start you off with the good news, let’s turn our attention to Celgene Corporation (NASDAQ:CELG), which, on Friday, announced that the European Commission had approved its oral relapsed and refractory rare blood cancer drug pomalidomide in combination with dexamethasone. Celgene Corporation (NASDAQ:CELG) will be launching the drug in Europe under the trade name Imnovid, and it’ll be used in cases where patients have tried at least two previous cancer therapies. In late-stage trials, Imnovid delivered progression-free survival of 15.7 weeks, which was a dramatic improvement over the placebo. Worldwide peak sales estimates for the drug are around $1 billion, so this is certainly a good start.
On Monday, small-cap biotechnology company Compugen Ltd. (USA) (NASDAQ:CGEN) gave investors something to cheer about when it announced a collaboration and licensing agreement with Bayer for two of its antibody-based immunotherapies. The deal could be worth as much as $540 million for Compugen Ltd. (USA) (NASDAQ:CGEN) and gives the company $10 million upfront, as well as the potential for $30 million more in milestone payments during preclinical trials. The two companies will co-develop these drugs, with Bayer getting worldwide rights upon commercialization (though Compugen Ltd. (USA) (NASDAQ:CGEN) would still receive a mid- to high-single-digit royalty). This is great news for Compugen Ltd. (USA) (NASDAQ:CGEN), as it solves the problem of seeking out a partner later, helps reduce its clinical testing costs, and staves off the need to dilute shareholders with a secondary offering to raise cash. Shares added 44% this week.
But as you might imagine, not all news this week was good. Although ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)‘ share price hardly moved, it delivered disappointing news on Monday that ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)-CRPrx failed to demonstrate a statistically significant improvement in inflammation reduction as compared with the placebo in a mid-stage rheumatoid arthritis trial. Isis noted that its drug did cut the C-reactive protein by 67%,
but it was done in by an exceptionally strong performance by the placebo. Isis will still be researching CRPrx for other indications. However, as I noted earlier this week, having 31 potential sources of revenue as well as 12 ongoing collaborations, I’d suggest Isis is in much better shape than investors realize.
The end of the week didn’t bring good tidings for shareholders of Novo Nordisk A/S (ADR) (NYSE:NVO), which, according to a report from BioCentury, received a second complete response letter (i.e., a rejection letter) from the FDA for its recombinant Factor VIII therapy to treat a form of hemophilia. According to the report, the rejection is based on unresolved issues at Novo Nordisk A/S (ADR) (NYSE:NVO)’s manufacturing facility and merely adds to a series of struggles the company has had with regard to advancing its hemophilia-related pipeline. As you might expect, Novo Nordisk A/S (ADR) (NYSE:NVO) is working with the FDA to resolve this issue as quickly as possible.
Finally, off in its own world this week is Onyx Pharmaceuticals (NASDAQ:ONXX) , which purportedly has received a $130-per-share buyout offer, or $9.5 billion, from Amgen, as Reuters reported earlier this week. According to people familiar with the matter, Onyx Pharmaceuticals (NASDAQ:ONXX) is still exploring interest from other suitors, but it may be interested in accepting Amgen’s offer, which is $10 a share higher than its original offer roughly six weeks ago. This news comes on the heels of Onyx Pharmaceuticals (NASDAQ:ONXX)’s second-quarter results, which showed losses were halved to just $53 million and revenue more than doubled to $153 million. If Onyx Pharmaceuticals (NASDAQ:ONXX) accepts the deal at $130 per share, I’d suggest Amgen is still getting itself a decent bargain.
The article This Week in Biotech originally appeared on Fool.com is written by Sean Williams.
Fool contributor 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.The Motley Fool recommends Celgene.
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