) --"Fail" is re-entering the lexicon of the biotech investor.
Biotech stocks seemed like they could do no wrong for awhile there, but all hot streaks come to an end eventually, witnessed by a recent string of disappointing clinical trial results and FDA rejections.
announced the failure of a phase III study of ulimorelin, an experimental drug designed to accelerate the gastrointestinal recovery of patients after bowel surgery. Transyme shares plummeted 71% to $1.49 in early trading.
was forced to halt early a phase III study of its heart drug varespladib. The problem: Varespladib doesn't work. Anthera shares are trading down 55% to $2.81 in Monday pre-market session.
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from a phase II study of its lung cancer drug bavituximab, which was only able to delay tumor growth by 9 days over a control.
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These three drug blowups follow closely the setback for
lung cancer vaccine Stimuvax
, which failed to show a significant benefit after a much-hyped interim analysis of a late-stage trial.
The FDA approved a new therapy to improve lung function of premature babies from
, but a short-lived pop in the company's stock price was quickly sold off. FDA also rejected drug applications from
The Nasdaq Biotechnology Index is up 14% for the year and still outperforming the broader indices, but the gap is narrowing. What was an 11% margin in mid-February between the NBI and S&P 500 is now down to a 5% gap.
Investors are being reminded that drug development is risky, but they are also being bombarded with a glut of new stock issued by biotech and drug companies seeking to raise new cash on the sector's strength.
are among companies selling stock to raise cash in recent weeks.
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Adding insult to injury, Peregrine filed a new $150 million mixed shelf on the same day it announced the negative bavituximab data.
, a serial stock diluter with an abysmal drug development track record, signaled its intent to once again hit up investors for more cash. The company filed a $150 million mixed shelf Friday.