These are grim days for biotech investors. The backlash over high drug prices, and the uncertainty over whether drugmakers will face some kind of crackdown in the U.S., has cast a cloud over those who invest in the development of new medicines.
Heading into the final trading day of the first quarter, the NASDAQ Biotech Index is down 24.7% year-to-date. The broader NASDAQ Composite Index is only down 2.8%. Investment capital, which had been flowing into the sector for a couple of years, is suddenly looking for greener pastures. About $5.4 billion of net capital has flowed out of biotech year-to-date, according to a Raymond James analysis on Mar. 28.
Which individual companies had the most extreme ups and downs in this bearish time? Which ones were able to defy gravity, however long that might last? Here’s a quick look at the five biggest winners and losers in the first quarter of 2016, among companies with market valuations of $200 million or more.
The Big Losers
PTC Therapeutics (PTCT). The South Plainfield, NJ-based drugmaker has suffered a breathtaking 81.2% drop in its value since the start of the year. It closed yesterday at $6.09 a share, down from its 52-week high of $78.72 (not a misprint). Most of the collapse occurred on Feb. 23. That’s when the company said the FDA declined to review the company’s application to start selling ataluren (Translarna) for patients Duchenne muscular dystrophy. This was a humiliating public beatdown, as the FDA didn’t just reject the drug, as it essentially used bureaucratic niceties to say “Don’t Waste Our Time With This Half-Baked Application.” Three days later, things got even worse. The company said it couldn’t agree on an acceptable pricing and reimbursement deal with German authorities, where its drug is cleared for sale. Last week, the company said it was cutting its workforce by 18% to save cash.
Celldex Therapeutics (CLDX). Celldex lost 77.0% of its value in the first quarter. Most of that fall came after its experimental brain cancer drug, rindopepimut (Rintega), failed in a pivotal clinical trial. Hopes were high for this “off-the-shelf” cancer vaccine approach, designed to stimulate the immune system in patients with certain types of glioblastoma. (See my Forbes coverage from November, based on results from a smaller study.) The company has some other drugs in its pipeline, but investors are saying they aren’t worth much. The company’s market value as of today is about $355 million. It entered the year with $290 million of cash in the bank.
BioCryst Pharmaceuticals (BCRX). The Research Triangle Park, NC-based company lost 73.5% of its value in the first quarter. The big hit came on Feb. 8, when the company said that both doses of its experimental drug for hereditary angioedema (HAE) were unable to beat a placebo in a clinical trial of 110 patients.
Puma Biotechnology (PBYI). Los Angeles-based Puma’s chart looks different than the others on this list, as its value has eroded more steadily since the start of the year, ending down 64.9%. Puma stock fell 21% on Monday when the company said that it wouldn’t be able to submit a new drug application to the FDA for its breast cancer drug until mid-2016. Investors had been hoping that event would occur by the end of the first quarter. The delay, according to the company’s version of events, was caused by the FDA’s request to amend the statistical analysis plan of a trial that evaluated Puma’s neratinib. The drug, biotech observers know well, also causes a lot of diarrhea.
Portola Pharmaceuticals (PTLA). South San Francisco-based Portola Pharmaceuticals tumbled 60.7% in the first quarter. Much of the drop came last week when the company said its long-lasting anti-clotting drug failed to reach the usual standard of statistical significance (p-value of .05 or lower) in a majority of the 7,500 patients studied.
The Winners
MediciNova (MNOV). The San Diego-based developer of neurology medicines saw a steady rise in the first quarter, climbing 116.9%. The company, still only worth $231 million, issued 11 press releases in the first quarter. These were generally minor updates about securing patents, or research summaries being accepted at an upcoming scientific meeting. By comparison, Biogen, one of the biotech industry’s biggest companies, issued nine press releases. Did little MediciNova really have more news than Biogen?
Biotie Therapies (BITI). Finland-based Biotie gained 82.5% in the first three months of the year. The reason was simple. Ardsley, NY-based Acorda Therapeutics agreed to acquire the company for $363 million, or $25.60 a share, on Jan. 19.
Editas Medicine (EDIT). Cambridge, Mass.-based Editas Medicine gained 71.4% in the quarter. The company, which uses the genome editing technology CRISPR-Cas9 to develop new medicines, went public and began trading Feb. 3. It is now worth more than $1.1 billion. The company has exciting technology that was named the Breakthrough of the Year by Science magazine last year. It has raised a lot of money, and has prominent scientists and businesspeople. Editas also doesn’t yet have a drug in clinical trials, where most of the value in biotech is created.
AveXis (AVXS). Bannockburn, IL-based AveXis has climbed 41.6% since its IPO and first trading day of Feb. 11. The company is developing a gene therapy for spinal muscular atrophy type 1.
Inovio Pharmaceuticals (INO). Plymouth Meeting, Penn.-based Inovio gained 28.4% in the first three months of the year. It has vaccine technology which it seeks to apply to cancer and infectious diseases. The company didn’t appear to do anything newsworthy, although it did issue a press release that said it was able to make a vaccine that stimulated an immune response against Zika virus in mice. Last week, an investor website tried to make a case that Inovio is a like a bargain-rack version of Juno Therapeutics, the high-profile cancer immunotherapy company.
