It was an eventful week for the biotech sector – highlights included FDA approval for a diabetes product and highly-awaited pivotal phase III data on a cystic fibrosis combination. Acquisitions also made it to the headlines with companies continuing to eye deals that will lower tax rates. Major stocks were up last week with the NASDAQ Biotechnology Index gaining 3.04%.
Recap of the Week’s Most Important Stories
1. Vertex Pharmaceuticals (VRTX) was a major gainer with shares shooting up 40.4% on highly-awaited phase III data on a combination of Kalydeco (ivacaftor) and lumacaftor for cystic fibrosis patients. With Vertex deciding to exit its hepatitis C franchise, the company is banking on the cystic fibrosis franchise for growth. The phase III data came at the right time and should allow the company to file for approval by year end (read more: www.zacks.com/stock/news/138039/vertex-pharma-skyrockets-on-cystic-fibrosis-drug-trial-results).
2. It proved to be third time lucky for MannKind Corporation (MNKD) with the company finally gaining FDA approval for its diabetes product, Afrezza. Afrezza’s approval is a major milestone for MannKind as it is the first approved product in the company’s portfolio (read more: http://www.zacks.com/stock/news/138551/mannkinds-afrezza-approval-a-key-milestone).
3. Auxilium Pharmaceuticals (AUXL), which is going through a challenging period with Testim expected to record a significant drop in 2014 revenues, has decided to merge with Canada-based QLT Inc. (QLTI). The company is looking to benefit from cost synergies and lower taxes (read more: http://www.zacks.com/stock/news/138360/auxilium-and-qlt-to-merge-on-tax-saving-attractions).
4. AbbVie (ABBV) provided additional details on its proposal to acquire Shire even though Shire has refused AbbVie thrice. The acquisition, if it goes through, would not only boost AbbVie’s product portfolio and pipeline, the company would also benefit from a globally competitive tax rate (read more: http://www.zacks.com/stock/news/138236/shire-snubs-abbvie-offer-again-favorable-ruling-for-).
5. Gilead (GILD) continues to seek ways to increase the sales of its blockbuster hepatitis C virus (HCV) treatment, Sovaldi. The company is now seeking approval for Sovaldi in the highly lucrative Japanese market (read more: http://www.zacks.com/stock/news/138564/gilead-seeks-japanese-approval-for-sovaldi).
Performance
Last week, Regeneron (REGN) easily led the way higher for the big stocks in this market as it added about 9.1% for the week. Amgen did not gain much last week with the stock rising just 1.3%. Over the last six months, Vertex is a clear winner gaining 29.9% thanks to the impact of the pivotal phase III data on the Kalydeco-lumacaftor combination.
| Company | Last Week | Last 6 Months |
| AMGN | 1.28% | 5.00% |
| BIIB | 3.34% | 15.84% |
| GILD | 5.54% | 13.40% |
| CELG | 3.26% | 2.94% |
| REGN | 9.09% | 10.49% |
| ALXN | 2.52% | 21.99% |
| VRTX | 2.48% | 29.83% |
What’s Next in the Biotech World?
While nothing specific is lined up later this week, stay tuned for the usual pipeline and regulatory updates. There could also be an update on AbbVie’s pursuit of Shire.
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