December 31, 2015
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – It’s been an interesting year for biotech stocks, as some performers soared before plummeting, and a tweet by a presidential candidate touting price controls of prescription drugs causing the Nasdaq Biotechnology Index to stagger and shed a few points.
In all, the index is looking at a 12 percent year-to-date gain, but that’s down from the four previous years. There have certainly been strong performers in the market, such as Boston-based Sarepta Therapeutics , which is working on a treatment for Duchenne Muscular Dystrophy. The company has seen a stock gain of 168 percent over the past year. Still, there have also been some biotech stocks that have performed poorly this year. Analysts at the Motley Fool highlighted three biotech as the worst performing.
The maker of weight-loss drug Belviq has seen a loss of about 70 percent of its stock price in large part due to the fact that Belviq is not often prescribed. The company reported net product sales of Belviq at $4.9 million last quarter. Arena Pharmaceuticals is currently trading at $1.95 per share, down from a high of $6.05 per share in January. One reason the company may have had some trouble with Belviq could be related to Eisai Inc., the U.S. pharmaceutical subsidiary of Tokyo-based Eisai Col., Ltd. Eisai markets BELVIQ throughout much of the world. Eisai has had its own troubles. In April, the company announced it planned to lay off about 25 percent of its employees in the U.S. It employed about 1,800 people in the U.S.
PDL BioPharma has lost about half of its value this year. Stock for PDL BioPharma is currently trading at $3.49 per share, down from a high of $7.72 per share in January. One of the reasons for the stock’s steady decline over the year, as the Motley Fool reported, is the company’s business model “to purchase the patents to pharmaceutical products and then monetize them to generate a profit.” One of the patents owned by the company for a human antibody expired at the end of 2014 and the Fool predicts company revenue will decline as a result, by as much as 70 percent, analysts predict.
MannKind Corporation has had a tumultuous year. In October, the company went through its third round of layoffs for the year. MannKind’s shares have dropped nearly 70 percent this year. The stock is currently trading at $147 per share, down from a high of $7.58 per share in February following regulatory approval of its inhaled insulin. MannKind produces Afrezza, a rapid-acting inhaled form of insulin to treat diabetes. It was approved by the U.S. Food and Drug Administration (FDA) in 2014 and hit the market in the U.S. in a partnership with Sanofi in February 2015. Sales have been less than expected, some analysts suggesting the novelty of inhaling the insulin rather than injecting it is not worth the additional price.
While these three stocks may have poorly performed in 2015, a new year is around the corner, which could lead to sharp turnarounds for these companies. David Klaskin, chief investment officer at Oak Ridge Investments, told the Wall Street Journal that biotech is “one of the best areas for growth.” He said he is strong on those stocks in large part due to the aging U.S. population and the Affordable Care Act, which he said should boost health care spending in the future.
