2:20 PM
Jan 06, 2017
 |  BioCentury  |  Finance

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 the sectors.

The top mid-cap gainer for the quarter and the year was public market debutant Betta Pharmaceuticals Co. Ltd. The Chinese cancer play, which raised RMB720 million ($106.3 million) in a November IPO, was up 320%. The company markets Conmana icotinib, an EGFR tyrosine kinase inhibitor to treat non-small cell lung cancer (NSCLC).

The second best mid-cap performer in 2016 was Exelixis Inc., up 164%. Exelixis’ performance was driven by positive data for Cabometyx cabozantinib in renal cell carcinoma (RCC) and FDA approval for the indication.

Ophthotech Corp. was the worst-performing company in the tier last quarter. The ophthalmic company saw 86% of its value disappear on Dec. 12 after the company announced its Fovista pegpleranib missed the primary endpoints in the Phase III OPH1002 and OPH1003 trials to treat wet age-related macular degeneration (AMD). Ophthotech ended the year with a market cap of $161.2 million, down 90% for the quarter.

The $500-$999 million market cap band declined 7.4% in 4Q16, wiping out the 7.5% gains seen in 3Q16 and leaving the group down 16.7% for the year.

Evotec AG was the group’s best performer in 4Q16. The company’s shares started to climb in November after announcing that revenues for the first nine months of 2016 were up 37% to €120.6 million ($135.5 million) vs. the same period in 2015. Evotec was up 48% for the quarter and ended the year with a market cap of $1 billion.

The group’s worst-performing member was Arrowhead Pharmaceuticals Inc. In early November the drug delivery play fell 31% following a clinical hold of...

Read the full 2837 word article

User Sign in

Trial Subscription

Get a 4-week free trial subscription to BioCentury

Article Purchase

$150 USD
More Info >