With the SPDR S&P Biotech Index up 47% 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.

Under normal circumstances we examine the five most important biotech news stories each week. However, this week we have a problem -- there were 11, and each one is equally important! With that being said, I'm breaking this series into two parts this week. First we'll look at five instances where the Food and Drug Administration or collaboration announcements heavily influenced biotech stocks this week, and then we'll focus on six clinical trials that made waves during the week in Part 2 of "This Week in Biotech."

An A-OK from the FDA
Let's first have a look at two fresh approvals by the FDA this week.


The most notable approval, though highly expected, comes from Gilead Sciences , which announced that the FDA had approved Sovaldi (previously known as sofosbuvir) for the treatment of genotype 1 through 4 hepatitis-C. This oral treatment is revolutionary in that it doesn't need to be administered in combination with interferon in genotype 2 and 3 patients. Interferon has a nasty side effect of making patients feel like they have the flu, so it should dramatically improve patient quality of life through lessening side effects, and it's been proven in clinical trials to eliminate detectable levels of the HCV virus faster and more effectively than the current standard of treatment. With sales of $1.9 billion expected next year alone, Gilead is sitting in the driver's seat.

However, let's not forget about Auxilium Pharmaceuticals , which also announced on Friday the FDA approval of Xiaflex for the treatment of Peyronie's disease (PD), a curvature deformity of the penis that is greater than 30 degrees. Auxilium notes that many of the 65,000 to 120,000 men who are diagnosed with PD every year go untreated, so its next challenge will be in ensuring they are treated with Xiaflex. This is Auxilium's second indication for Xiaflex; however, sales thus far for Dupuytren's contracture, its other FDA-approved treatment indication, hasn't lived up to estimates, so hopefully having the sole FDA-approved indication for PD treatment will help.

Walk this way ...
Shares of clinical-stage antibody-drug conjugate, or ADC, development company Immunomedics received a nice boost mid-week, when the FDA announced that it had granted IMMU-132, an experimental small cell lung cancer ADC compound, orphan drug status. This particular status is noteworthy because it allows Immunomedics to claim tax credits on qualified clinical trials and, most importantly, grants the company a seven-year period of marketing exclusivity if approved. I've been a big fan of ADC-based therapies, which piggyback a toxin onto an antibody, which then releases that toxin when it comes into contact with a protein found only in cancer cells. I would strongly suggest adding Immunomedics to your watchlist if you haven't done so already.

Not so fast!
However, not every company was so lucky. Ambit Biosciences saw its shares lose 36% on the week after its relapsed/refractory acute myeloid leukemia drug, quizartinib, was denied an accelerated approval pathway by the FDA. According to Ambit's press release, the FDA didn't agree that "complete remission with incomplete hematological recovery represents a surrogate endpoint reasonably likely to predict clinical benefit." What this means for Ambit is the need to run a confirmatory phase 3 trial and spend its precious cash in doing so. I believe the drop was a bit of an overreaction to the downside, but now it's up to Ambit to prove critics wrong.

Two heads are better than one
On the collaborative side of the coin, OncoMed Pharmaceuticals appears to have sealed the collaborative deal of a lifetime with Celgene to develop up to six anti-cancer stem cell therapies. The partnership will earn OncoMed $155 million in upfront cash, will let Celgene purchase $22.5 million in OncoMed's common stock, and could generate what amounts to billions in milestone and development payments to OncoMed if its developed drugs prove successful. Rather than targeting existing cancerous cells, these treatments would go after the source of the cancer itself, which is why the investing community is so excited. With little fear of running out of cash, OncoMed shares exploded higher by 97% on the week.

Click here to continue to Part 2 of this week's biotech wrap-up where we review six important clinical trial updates from the past week.

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The article This Week in Biotech: Part 1 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 recommends Celgene and Gilead Sciences. 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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