This Week in Biotech
May 25th 2013 7:30PM
Updated May 26th 2013 11:00AM
With the SPDR S&P Biotech Index up 35% 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.
Taking a page right out of the old West, this week exposed the good, the bad, and the downright ugly of the biotech sector with regard to clinical data.
Heralding the charge higher was AcelRx Pharmaceuticals which advanced 18% on the week after disclosing on Tuesday that its post-operative pain management system, Sufentanil NanoTab PCA, met its primary endpoint in late-stage trials and reconfirmed all previous late-stage study results. This data is strong enough for AcelRx to seek approval from the Food and Drug Administration with a new drug application filing expected next quarter. I'd be cautious with AcelRx moving forward, as the possibility of an FDA rejection for opioid-based treatments is always a possibility.
Also gaining double digits on the week was the highly embattled Peregrine Pharmaceuticals which rallied after the FDA approved its late-stage trial design for its second-line non-small-cell lung cancer immunotherapy, Bavituximab. While trial design approvals are rarely big news, it is in this case because mid-stage results for Bavituximab have been all over the place. At first Bavituximab demonstrated a better than doubling in progression-free survival followed weeks later by management's insistence that investors were not to trust the data. A few months later, following a review, we were told to trust the data again. This filing helps relieve some of the confusion surrounding Peregrine's mid-stage results, and hopefully its phase 3 study will be black-and-white obvious as to whether Bavituximab provides a statistically significant benefit.
Merck delivered rather disappointing news on its late-stage Parkinson's disease medication Preladenant on Thursday, noting that three separate late-stage trials didn't provide any statistical evidence of efficacy relative to the placebo. As such, Merck no longer intends to pursue regulatory approval for Preladenant and plans on shutting down any extension trials. It will, however, present its findings at upcoming scientific meetings.
Shareholders of XenoPort are also glad for the long weekend after their stock tumbled this week following disappointing late-stage results for Arbaclofen Placarbil, or AP. Aimed at treating spasticity in patients with multiple sclerosis, AP was unsuccessful in delivering a statistically significant benefit compared to the placebo. XenoPort's management noted that the company plans to cease development of AP and instead focus on the commercial development of recently approved restless leg syndrome drug Horizant, and its remaining clinical pipeline.
Finally, in a case of "kick 'em while they're down," AVEO Pharmaceuticals was sucker-punched by partner Astellas Pharma on Friday. Astellas informed AVEO of its intent not to file for regulatory approval in Europe for Tivozanib and commented that it had no intentions of funding any additional studies of the drug with regard to renal cell carcinoma, or RCC. That's bad news for AVEO, which got the thumbs-down from the FDA's panel three weeks ago and recommended AVEO run another trial. I wouldn't completely discount the possibility that Tivozanib would show a statistical benefit in treating RCC, but the mounting costs of running another trial are certain to be burdensome on AVEO.
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The article This Week in Biotech originally appeared on Fool.com.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 has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.