If there is such a thing as a poster child for volatility in the stock market, the biotech sector would likely take top honors.
Biotech stocks are unique. While stocks in other sectors are typically valued based on their past performance and future earnings potential, the majority of biotech stocks don’t have a cent in recurring revenue. Instead, biotech stocks are (typically) valued by Wall Street and investors based on the peak annual sales potential of their key pipeline products. This valuation allows some degree of emotion and opinion to come into play, which can lead to wild swings in biotech stock share prices to both the upside and the downside.
On the trading floor, shares of Radius Health Inc (NASDAQ:RDUS) gained 8.45% to close at $72.51. The $2.86B company on August 6, 2015 reported its financial results for the second quarter ended June 30, 2015, and provided recent corporate highlights. As of June 30, 2015, Radius had $224.0 million in cash, cash equivalents and marketable securities, and on July 28, 2015, raised approximately $323.8 million of net proceeds in a follow-on public offering of its common stock.
For the three months ended June 30, 2015, Radius reported a net loss of $23.0 million, or $0.61 per share, as compared to a net loss of $12.6 million, or $2.22 per share for the three months ended June 30, 2014. The net loss per share calculation for the three months ended June 30, 2015 includes the impact of the conversion of Radius’ convertible preferred stock into common stock upon the completion of its initial public offering in June 2014. The increase in net loss for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 was primarily due to an increase in research and development and general and administrative expenses, which were partially offset by a decrease in other (expense) income, net.
As of June 30, 2015, Radius had $224.0 million in cash, cash equivalents and marketable securities. Based upon Radius’ cash, cash equivalents and marketable securities balance following the public offering of shares of its common stock in July 2015, Radius believes that, prior to the consideration of revenue from the potential future sales of any of its investigational products, it has sufficient capital to fund its development plans, U.S. commercial scale-up and other operational activities into 2018.
Agenus Inc (NASDAQ:AGEN) closed at $7.75 with an increase of 6.60%. The $612.92M company on July 24, 2015 announced that GlaxoSmithKline (GSK) received a positive opinion for its Malaria vaccine candidate from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). The vaccine candidate, named Mosquirix™ (RTS,S) is the first QS-21 Stimulon containing product to receive a positive regulatory decision. Agenus’ adjuvant QS-21 is designed to increase immune response to antigens in vaccines. The positive opinion signals that Mosquirix meets the necessary quality, safety and efficacy requirements according to EU standards.
The CHMP scientific opinion is a key step in the regulatory process toward making a vaccine against Malaria available. The positive opinion follows review by the CHMP of the candidate vaccine’s safety, efficacy and quality. Clinical data supporting the filing were mainly from a Phase 3 clinical program involving more than 16,000 infants and young children.
NewLink Genetics Corp (NASDAQ:NLNK) ended at $53.05 by gaining of 14.46%. The $1.33B company on July 31, 2015 announced that the international partnership studying the VSV-ZEBOV (Ebola) vaccine candidate in Guinea has released interim data suggesting that it is effective against Ebola in a large clinical trial. According to the announcement, the interim results suggest that the vaccine candidate demonstrates efficacy within about 10 days of administration to a person without the infection.
The VSV-ZEBOV (Ebola) vaccine candidate was originally developed by the Public Health Agency of Canada (PHAC), and was subsequently licensed to a subsidiary of NewLink Genetics. In late 2014, Merck licensed the vaccine from NewLink Genetics to apply Merck’s vaccine expertise to help accelerate the development of this promising candidate. Merck is now responsible for research, development and manufacturing of the rVSV-ZEBOV vaccine.