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 Halozyme Therapeutics, Inc. (NASDAQ:HALO) dropped 1.68% to close at $18.71. The $2.43B company on August 6, 2015 announced the Pancreas Center at the University of California, San Francisco (UCSF) has initiated a clinical research study of Halozyme’s investigational new drug, PEGPH20 in pancreatic cancer patients who are candidates for potentially curative surgery. The trial will be conducted within the UCSF Helen Diller Family Comprehensive Cancer Center.
The Phase 2 study will investigate PEGPH20 in combination with gemcitabine and nab-paclitaxel (ABRAXANE) in patients with borderline resectable Pancreatic Ductal Adenocarcinoma (PDAC). The study will track the progress of up to 36 patients through chemotherapy and surgical treatment.
PEGPH20 (PEGylated recombinant human hyaluronidase) targets the degradation of hyaluronan (HA), a chain of natural sugars that can accumulate around cancer cells, inhibiting other therapies. By degrading HA, PEGPH20 may increase the access of co-administered chemotherapeutic and immunotherapeutic agents.
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) closed at $184.96 with a decrease of 1.31%. The $42.39B company on July 6, 2015 announced that Japan’s Ministry of Health, Labour and Welfare (MHLW) approved the Company’s New Drug Application (NDA) for the use of Strensiq®(asfotase alfa) as a treatment for patients in Japan with hypophosphatasia (HPP), a life-threatening, ultra-rare metabolic disorder. Strensiq, a bone-targeted enzyme replacement therapy, is the first therapy approved in Japan for the treatment of patients with HPP. Alexion expects that initial patients with HPP in Japan will start commercial treatment with Strensiq by late Q3 2015.
HPP is a genetic, progressive, ultra-rare metabolic disease in which patients experience devastating effects on multiple systems of the body, leading to debilitating or life-threatening complications. It is characterized by defective bone mineralization that can lead to deformity of bones and other skeletal abnormalities, as well as systemic complications such as profound muscle weakness, seizures, pain, and respiratory failure leading to premature death in infants.1-5 As reflected in the prescribing information in Japan, infants with HPP treated with Strensiq had 84% overall survival, as estimated by Kaplan-Meier analysis, at 168 weeks.
Intrexon Corp (NYSE:XON) ended at $47.03 by losing 2.08%. The $5.27B company on August 10, 2015 announced an agreement to acquire Oxitec Ltd., a pioneer in biological insect control solutions. Oxitec’s safe, innovative, self-limiting approach to control mosquitoes that spread disease and to limit pest-related crop damage is well aligned with Intrexon’s growth and investment strategies.
Utilizing advanced genetics and molecular biology, Oxitec has developed a new and innovative solution to controlling insect populations through the production of ‘sterile’, self-limiting insects whose offspring do not survive.
Unlike conventional approaches to insect control using insecticides that can affect the broader ecosystem, Oxitec programs are exquisitely directed at a single species. Intrexon intends to integrate its synthetic biology platform to advance Oxitec’s existing initiatives to protect communities from diseases like dengue fever as well as against agricultural pests that impact food supply worldwide.
According to the World Health Organization, dengue is the world’s fastest growing mosquito-borne disease spread by the Aedes aegypti mosquito. A recent estimate indicates a potential 390 million dengue infections per year, of which 96 million manifest clinically. Dengue continues to grow in both prevalence and severity as current methods, relying mostly on insecticides, have not been adequate to control the spread of the mosquitoes.
Open field trials with Oxitec’s mosquitoes have taken place in Brazil, Panama, Grand Cayman and Malaysia, with over 90% reduction of the Aedes aegypti pest population reported in each efficacy trial. Brazil’s National Technical Commission for Biosecurity (CTNBio) approved the safety of Oxitec’s mosquitoes in 2014, an important step towards full commercialization of this groundbreaking, and potentially life-saving, technology.