Many individual investors have opted to invest in biotech ETFs and mutual funds. The XBI and SBIO funds have performed well because they focus more on small and mid-sized biotech companies. The IBB, which has emerged as something of a proxy for the industry for many investors, is weighted much more heavily to bigger, more proven biotech companies.
The volatility of small- and mid-sized biotech stocks mean they will fall sharply once the inevitable correction comes, whether they have promising drugs in the works or not. The wildcard in the sector is the possibility of a wave of M&A, which could drive up some stocks.
But if picking which company has the next blockbuster drug is tough, anticipating the next M&A target is even trickier. And the longer the biotech rally continues, the more important it becomes to pick the winners from the losers.
On the trading floor, shares of Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) dropped 0.35% to close at $8.62. The $1.18B company on August 3, 2015 announced that Alios Biopharma Inc., part of the Janssen Pharmaceutical Companies (Janssen) has initiated a phase I clinical trial to evaluate the potential effect of simeprevir and odalasvir (also known as ACH-3102) on the pharmacokinetics of AL-335 in healthy volunteers.
This phase I study is an open-label, two-group study of simeprevir and odalasvir, a HCV NS5A inhibitor, on the pharmacokinetics of AL-335, a nucleotide-based HCV polymerase inhibitor. The primary objective of the study is to investigate the potential effect of simeprevir and odalasvir on the pharmacokinetics of AL-335 when administered in combination to healthy volunteers.
Exelixis, Inc. (NASDAQ:EXEL) closed at $5.72 with a decrease of 5.45%. The $1.36B company on August 11, 2015 reported financial results for the second quarter of 2015.
Net revenues for the quarter ended June 30, 2015 were $8.0 million, compared to $6.6 million for the comparable period in 2014. Net revenues consisted entirely of product revenue related to the sale of COMETRIQ.
Research and development expenses for the quarter ended June 30, 2015 were $24.5 million, compared to $51.0 million for the comparable period in 2014. The decrease was primarily related to a net decrease in clinical trial costs, predominantly due to decreases in costs related to COMET-1 and COMET-2, the company’s phase 3 trials in metastatic castration-resistant prostate cancer, and decreases in personnel related expenses resulting from an overall reduction in headcount.
Net loss for the quarter ended June 30, 2015 was ($43.4) million, or ($0.22) per share, basic, compared to ($73.4) million, or ($0.38) per share, basic, for the comparable period in 2014. The decreased net loss for the quarter was primarily due to decreases in research and development expenses and selling, general and administrative expenses and an increase in product revenues.
Cash and cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totaled $167.0 million at June 30, 2015 compared to $242.8 million at December 31, 2014. The June 30, 2015 cash position was prior to the launch of the company’s public offering of stock on July 21, 2015, as noted above.
MannKind Corporation (NASDAQ:MNKD) ended at $4.06 by losing 2.17%. The $1.72B company on August 10, 2015 announced the appointment of Dr. Raymond Urbanski as its Chief Medical Officer. As Chief Medical Officer, Dr. Urbanski will lead MannKind’s overall drug development activities and will be a member of the Executive Leadership Team.
Dr. Urbanski has more than 25 years of research, clinical and pharmaceutical industry experience developing numerous new drugs and indications across oncology, rheumatology, cardiology, endocrinology, and immunology. He has held CMO roles at Mylan and Metabolix. Previously he was Vice President at Pfizer, and Vice President and CMO at Suntory Pharmaceuticals. He earned both his MD and Ph.D., Pharmacology and Toxicology from the University of Medicine and Dentistry of New Jersey – New Jersey Medical School.
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