With the SPDR S&P Biotech Index up 29% 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.

This week was filled with quite a bit of clinical disappointment but attempted to make up for it with an FDA approval, the announcement that one high-profile biotech may be up for sale, and word that another one made a big purchase.

On the clinical front, Dynavax Technologies shares were absolutely clobbered, finishing the week down 53% after reporting its findings from a biologics license application meeting with the Food and Drug Administration involving its hepatitis-B vaccine Heplisav. The reason for the haircut was based on the FDA's findings that Dynavax would need to run another trial -- which is both costly and quite time-consuming -- to establish the safety of the vaccine. We can also add this to the other complete response letter requests that asked Dynavax to address concerns about the manufacturing of the vaccine. Right now we have more than enough reasons to avoid Dynavax stock at these levels.


But it wasn't just small-cap biotechnology companies taking it on the chin. Eli Lilly continues to stumble over its own feet in Alzheimer's research when it pulled the plug of mid-stage trials of LY2886721 following abnormal liver tests in patients on the drug. Lilly did mention that it has no intentions of curbing its study of BACE inhibitors with regard to their potential benefit to treating Alzheimer's disease. This does, however, mark yet another failure for Eli Lilly, whose solanezumab failed to meet its primary endpoint in late-stage trials last year.

If there was an FDA bright spot, it came from Amgen's Xgeva, which added another approval indication to treat adults with unresectable giant cell tumor of bone. In trials, Xgeva, which aids in reducing fracturing, delivered an overall objective response rate of 25%, with those patients exhibiting a median response duration of eight months. The FDA approved Xgeva in 2010 to treat skeletal-related events in patients with bone metastases and solid tumors.

Elan continues to make waves in the biotech sector, as it announced plans, just yesterday, to put itself up for sale. If you recall, Royalty Pharma has made two bids for Elan, with the latest being a $13 cash bid with the option of receiving up to an additional $2.50 per share. Elan rejected the offer as too low and is seeking more for itself and shareholders.

I'm not sure what Royalty Pharma sees in Elan. Having sold off its global rights in Tysabri to Biogen Idec, Elan doesn't have much, if anything, going for it. The company paid a hefty $1 billion for a 21% royalty interest in Theravance's line of COPD drugs, but Elan isn't primed to turn a meaningful profit from this royalty stream for years. This is a situation and stock I'd strongly suggest avoiding.

Finally, Questcor Pharmaceuticals shocked and pleased investors when it announced the $135 million purchase of Synacthen from Novartis. As my Foolish colleague Keith Speights noted, Synatchen was slated to be a potential rival to Questcor's lead drug, Acthar Gel, which it currently holds indications to treat 19 ailments. With this potential competition now under its control it lifts some uncertainty from Acthar's growth outlook.

Is Questcor now cleared for take-off?
Questcor is one of the most debated names in all of biotech. Its premium priced drug, Acthar, is growing at a torrid pace -- and minting money in the process. However, recent events have created significant doubts about Questcor's future. Will insurance companies continue to cover the drug? Will a government investigation lead to huge fines? We highlight these high-profile issues inside our brand-new premium research report on Questcor. In it, you'll learn about the key opportunities and threats facing the company, as well as multiple reasons to buy and sell the stock. So make sure to claim a copy today by clicking here now.

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.

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