Ebb & Flow

With U.S. markets abruptly shut last week, companies with milestone-driven news will have to wait until this week to see if the announcements had any effect on valuations. And questions remain as to whether fundamental progress will have any bearing on valuations once the U.S markets re-open, given investors' desire for ultimate liquidity during international emergencies (read: T-bills and cash).

The experience of dual-listed companies last week did not provide grounds for optimism. Of 40 biotech stocks dual-listed on a U.S. and non-U.S. exchange, 36 traded down on their non-U.S. exchanges. Some of the drops were harrowing, with 26 slipping 10% or more (see "Ominous Signs").

The U.S. markets also will have to digest last week's news from FDA panels, which included two votes by the Oncologic Drugs Advisory Committee (ODAC) to recommend approval of Zevalin ibritumomab from Idec (IDPH) to treat non-Hodgkin's lymphoma (NHL); and a vote by ODAC not to recommend approval of IntraDose cisplatin/epinephrine injectable gel from Matrix (MATX) to treat recurrent head and neck cancer (see Regulation, A7).

Investors were able to tell little if anything from the market's reaction. IDPH fell $1.46 to $56.15 on 8.4 million shares on Monday after the FDA posted its review of the BLA, the day prior to the panel vote. MATX trading was halted for Monday's panel meeting and on the prior Friday when the FDA posted its review. MATX closed the prior Thursday at $6.79.

IDPH's opening may be complicated further by last week's news that IDPH, Corixa (CRXA) and CRXA's partner GlaxoSmithKline (GSK) all filed suits against each other, with the CRXA/GSK suit asserting that Zevalin infringes three CRXA patents. Both Zevalin and CRXA's Bexxar radioimmunotherapy target CD20, but use different radiolabels.

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