Tiers of disappointment

Bad year for biotech ends on sour note in 4Q16 with all market cap tiers in red

A bad year for biotech was closed with an even worse 4Q16 as volatility ahead of the U.S. elections and continued concerns around drug pricing held every market cap band in the red despite a brief rally post-election.

Large cap biotechs fared best in 4Q16, posting a loss of 6.2%. Large cap gainers during 4Q were led by Tesaro Inc., which graduated to the top tier in 3Q16. The oncology play gained 34% as it continued to deliver positive clinical and regulatory news. Additional data reported from the Phase III NOVA trial of niraparib could support a broad label for the PARP inhibitor in ovarian cancer, and the company completed regulatory submissions to both FDA and EMA.

Alnylam Pharmaceuticals Inc. led the decliners thanks to a major clinical setback. In early October, less than a week after the RNAi company discontinued development of ALN-AAT to treat alpha-1 antitrypsin (AAT) deficiency-associated liver disease because of safety concerns, it had to scrap lead program revusiran. The company reported an “imbalance in mortality” in the Phase III ENDEAVOR trial to treat familial amyloidotic cardiomyopathy (FAC), a form of transthyretin (TTR)-mediated amyloidosis (ATTR).

Alnylam plummeted $34.09 (48%) to $36.21 following the news and finished the quarter down 45%. For the year, Alnylam was off 60%.

The top large cap gainer for the year was Swiss biotech Actelion Ltd., which was up 58%. Much of the gains - 31% - came in 4Q16 as the cardiovascular, endocrine/metabolic and autoimmune play disclosed it had entered discussions with Johnson & Johnson about a strategic transaction.

Companies in the $1-$4.9 billion tier were the second-worst performers in 4Q16, down 8.7%. For the year, the band’s 21.4% decline was the third worst of

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