Biotech Sector on Track to Close Year in Positive Territory

Print 04 December 2015
Peter Winter / Thomson Reuters BioWorld

Biotech investors had a great deal to be thankful for heading into the Thanksgiving holiday. With just one month to go before biotech closes the curtains on another year, the sector appears to be back on track and stands poised to finish 2015 in positive territory, a performance which is much better than some pundits were predicting when valuations nosedived during August and September as the heated debate over drug prices got into high gear.

After suffering a 20 percent drop in value during that period, the BioWorld Blue Chip Biotech Index, comprising 20 of the leading companies ranked by market cap, has recovered more than half of its losses, with an 11 percent jump since the end of September.

Most of the bounceback occurred last month; overall, stock prices of biotech’s elite companies held steady this month, despite the prevailing uncertain and choppy general markets.

The index recorded a modest 0.8 percent gain in value in November and is up 9.7 percent year to date (YTD). The Nasdaq Composite index and the Dow Jones Industrial average performed similarly, recording gains of 1 percent and 0.8 percent, respectively. At the end of the month, Nasdaq stands up at 8 percent YTD, with the Dow valued at the same point it was at the beginning of the year. 

There was plenty of news flow to keep investors engaged in the sector this month. Top of mind was Pfizer Inc.’s megadeal with Allergan plc in an all-share transaction, which values the latter firm at $160 billion. It represents the largest deal in the history of the pharmaceutical industry and valued Dublin-based Allergan at $363.63 per share, based on Pfizer’s share price of $32.18 immediately before the deal became public. 

That certainly added an exclamation point to the number of M&A transactions recorded this month, starting out with Shire plc adding to its hereditary angioedema (HAE) portfolio with a $5.9 billion cash acquisition of Dyax Corp. Shareholders of Dyax could get an additional $646 million on FDA approval of DX-2930, a prophylactic antibody treatment for HAE set to enter phase III. In addition, Shire still has a $33.9 billion all-stock offer on the table for hemophilia specialist Baxalta Inc. 

APPROVALS ABOUND

In addition to dealmaking, it is looking like another banner year for the approval of new molecular entities by the FDA, with biotech’s innovation engine continuing to pay dividends. In November, several companies lit up FDA’s green lamp for their new drugs. Gilead Sciences Inc., for example, continued to raise the bar in treatments for HIV with the FDA approval of its once-daily single-tablet regimen branded Genvoya – the first tenofovir alafenamide (TAF)-based regimen, which combines elvitegravir 150 mg, cobicistat 150 mg, emtricitabine 200 mg and TAF 10 mg. It was approved to treat HIV-1 – the most common and pathogenic strain of the virus – in adults and pediatric patients 12 years and older who have no antiretroviral treatment history or to replace a current antiretroviral regimen in those who are virologically suppressed on a stable antiretroviral regimen for at least six months with no history of treatment failure and no known substitutions associated with resistance to the individual components of Genvoya. 

Almost four months ahead of the FDA PDUFA date of March 9, 2016, the agency granted accelerated approval to Genmab A/S’s anti-CD38 multiple myeloma antibody, Darzalex (daratumumab) injection, administered as a single agent for the treatment of patients with multiple myeloma who have received at least three prior lines of therapy, including a proteasome inhibitor (PI) and an immunomodulatory (IMiD) agent or who are double-refractory to a PI and an IMiD agent. 

Lightlake Therapeutics Inc., a small New York-based biopharma, gained FDA approval of Narcan (naloxone hydrochloride) for emergency treatment of known or suspected opioid overdose. Lightlake developed the nasal spray, which will be marketed by partner Adapt Pharma Ltd., of Dublin. Last year, the companies inked an exclusive global license for the product, which becomes the first naloxone-based nasal spray indicated for emergency treatment of opioid overdose. 

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