Down Down Down Goes Biotech - But Insiders Are Optimistic and Buying
The S&P Select Biotech Index remains near the lows for the year as negative headlines seem to outnumber the positive at the moment.
Pfizer (PFE) cast a pall over earnings season with a preannouncement FY2023 guidance cut based on a weaker COVID-19 revenue outlook. PFE is now down 35% on the year and it trading at levels last seen prior to COVID-19 vaccine and therapeutics approvals.
Ambrx Biopharma (AMAM) slid ~20% on the release of data contained in an abstract for an upcoming oncology meeting. Analysts generally viewed the data for ARX517 in prostate cancer to be favorable, but the stock is up ~400% YTD and some investors may be looking to lock in profits.
Cassava Sciences (SAVA) showed that lighting can strike twice in Alzheimer’s disease investing as one of the academic researchers responsible for much of the foundational work on lead experimental drug simufilam was accused of misconduct. Recall, Alzheimer’s disease company Athira (ATHA) made waves in 2021 when then CEO Leen Kawas was ousted after an investigation found she altered images in graduate research that underpinned the company’s lead drug program. In SAVA's case, City University of New York (CUNY) conducted an investigation into allegations of data manipulation and fraud. CUNY neuroscientist Hoau-Yan Wang failed to provide the original data that was under scrutiny and a number of the associated scientific papers are being withdrawn.
Harmony Biosciences (HRMY) surprised investors with the early release of data from the phase 3 INTUNE study evaluating Pitolisant in patients with idiopathic hypersomnia (IH) noting no statistically significant difference observed in primary endpoint. HRMY shares were down nearly 40% before recovering given Pitolisant is FDA approved for other indications and is generating meaningful cash flow.
Akero therapeutics (AKRO) was cut in half upon releasing data from the Ph2b SYMMETRY 36-week NASH trial that failed to show a clear fibrosis benefit. Investors were hoping the data in these later stage F4 patients would show clear differentiation from GLP-1 drugs that are garnering outsized attention for weight loss and associated benefits. Once again competitive pressures are setting a high bar for success for indications with multiple potential therapeutic alternatives.
Silk Road Medical (SILK) crashed to a new low upon releasing updated guidance that was below prior expectations and announcing the retirement of the CEO. SILK shares are now down 86% YTD.
Regulatory pain was felt by Aldeyra Therapeutics (ALDX) as shares crashed 75% on the announcement FDA had major issues with the company's new drug application and rejection of the application was anticipated.
Insider buying can provide a beacon of hope during difficult times and Erasca's (ERAS) CEO provided 2 million reasons not to give up on life sciences companies just yet.