They say good things come in threes. If so, biotech companies could be in for not just another year of outperformance, but another decade. The first era of biotech was a building phase, when companies created their first blockbuster drugs. The second, current one, has resulted in a four-year rally that reflects the sector’s transition from a cluster of one-hit wonders to mature companies with multiple blockbuster products. And now the third is just starting to emerge – Credit Suisse calls it Biotech 3.0 – that looks likely to continue to 2020 and beyond.
For the past four years, biotech stocks have been the top-performing industry in the S&P 500, and the recent outperformance has been notable: a 74 percent gain in 2013 (versus 30 percent for the S&P 500) and a 42 percent gain in 2014 (versus 11 percent). And Credit Suisse Head of Global Biotechnology Research Ravi Mehrotra expects the stocks to beat the market once again this year. “This multi-year outperformance has not been a simple sentiment-driven bull run, but rather a fundamental rerating of the biotech sector,” he writes in a recent report published this year.
On the trading floor, shares of Biogen Inc (NASDAQ:BIIB) dropped 4.60% to close at $295.64. The $72.88B company on july 27, 2015 announced the formation of a strategic alliance focused on enhancing the understanding of the underlying biology of Parkinson’s disease (PD) and the creation of novel tools and programs that could accelerate research and the development of new PD treatments. The agreement will combine the unique clinical expertise and data of the Institute with Biogen’s focus on neurodegenerative disease and approach to clinical development.
Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) closed at $7.86 with a decrease of 1.38%. The $1.09B company on August 3, 2015 announced today 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.
As previously announced on May 19, 2015, Achillion has granted Janssen an exclusive, worldwide license to develop and, upon regulatory approval, commercialize HCV products and regimens containing one or more of Achillion’s HCV assets which include odalasvir (ACH-3102), ACH-3422, and sovaprevir.
Anthera Pharmaceuticals Inc (NASDAQ:ANTH) ended at $7.04 by losing 9.40%. The $308.50M company on August 10, 2015 announced financial results and an operational update for the second quarter ended June 30, 2015.
Net loss for the quarter and six months ended June 30, 2015 was $8.9 million and $16.6 million, respectively, compared to $7.3 million and $15.2 million for the corresponding periods in 2014. The increase in net loss both quarterly and year-to-date is mainly driven by higher clinical development expense for our blisibimod program and manufacturing and study preparation expenses for the Sollpura(TM) development program.
The increase in operating expense both quarterly and year-to-date is offset by revenues of $0.3 million and $0.5 million in connection with the amortization of license fee and FTE reimbursement from our collaborative partner, and $0.4 million and $0.9 million in cost share reimbursement from our partner. Furthermore, operating expense is reduced by $1.1 million in connection with our achievement of certain milestones specified in a research award granted to us by the Cystic Fibrosis Foundation Therapeutics (“CFFT”) for the development of Sollpura(TM). Included in operating expense are $0.7 million and $1.2 million of non-cash stock-based compensation recorded for the three and six months ended June 30, 2015, compared to $0.5 million and $1.3 million in the corresponding periods in 2014.
As of June 30, 2015, we had cash and cash equivalents of $35.5 million, compared to $2.6 million as of December 31, 2014. On July 14, 2015, we further increased our cash position by approximately $27 million from the sale of 3,833,334 shares of our common stock at $7.50 through a public offering. From January to July, 2015, we have increased our cash position by approximately $73 million, which comprised of $54 million from the two public offerings in March and July, $11.5 million from the sale of common stock through an at-the-market offering, $7.0 million from an equity investment by our partner, and $1.1 million from a research award from CFFT.