Ebb & Flow
If there’s a silver lining in last week’s high profile clinical setback from Genentech (DNA), it’s that the biotech market held up fairly well in the face of the well publicized event. It wasn’t too long ago that a late-stage setback from a bellwether would take the entire sector down. But last week, the BioCentury 100 gained 2% even as DNA was shedding $1.27, or $657.7 million in value, on news that its Avastin anti-VEGF antibody failed in a Phase III study in relapsed metastatic breast cancer (see Product Development, A7).
The divergence was apparent at the outset, as the BioCentury 100 inched forward 0.6% while DNA dropped $3.11 (10%) to $28.89 on 14.7 million shares on Tuesday after its post-market announcement on Monday. Another positive sign is that DNA’s news did not trigger wholesale selling of other companies with angiogenesis compounds in development (see "No Effect").
The BioCentury index also outpaced the NASDAQ Composite, which slipped 0.3% on the week.
DNA’s selloff could have been a lot worse. The stock bounced Friday - adding $1.88 to $30.43 on 3.1 million shares - on hopes that the Raptiva psoriasis compound it is developing with Xoma may be able to make up some time on Biogen. BGEN’s Amevive psoriasis compound got a six-month review window, pushing its probable launch into the first quarter. DNA expects to submit a BLA for Raptiva by year end.
It should be noted that DNA had some Avastin failure priced into it. The company had advised investors that the breast cancer trial was high risk, and that its success or failure shouldn’t affect its lead colorectal cancer indication (see BioCentury, July 15).The MAb also is in