If you were ever needed examples of the phenomenal risk and reward of investing in baby biopharma look no further than what’s going on in the sector today.
Shares of Seattle Genetics are taking it on the chin on the news that the company is stoppinga mid-stage study of a lymphoma drug because it didn’t work well enough. Roche/Genentech were partnered with SGEN on it.
Shares of Amicus Therapeutics are also getting hammered on disappointing datafor its developmental drug for Gaucher disease. Amicus has a ticker symbol that is a play on a major piece of its drug technology, FOLD, but most people who aren’t familiar with the science probably don’t get it. I think the company would be better off going with something more straightforward. The problem is AMCS, ACUS and AMIC, just to name a few possibilities, are all taken. But FOLD is such an easy target especially when they’ve got bad news and investors fold.
Meantime, Xenoport and GlaxoSmithKlineannounced positive mid-stage test resultsfor their post-shingles pain drug. XNPT shares are higher. And microcap AVI BioPharma is rallying on a full-page bullish piece in Barron’s (sub-headline, “This little biotech could become a big player.”) Separately, the company announced todaythat it’s getting another $11.5 million from the feds for biodefense drug development.
But as the news out of SGEN and FOLD illustrates, there are no guarantees. Drug development has been, is and always will be risky business. Buyer beware.