Biotech Week in Review: Onyx Is Star of the Week

A very minor advance was the best that biotech could do last week.

The Centient Biotech 200™ rose just 4 points, which equates to a small one-tenth of one percentage point, ending at 4054. That is not much in the way of change. But even if last week was not very exciting, biotech remains much closer to the highs than to any lows.

To recapitulate, so far in 2007, biotech began with three straight weeks of advance that took the CBT 200™ to a new all-time high. In the four weeks since then, biotech has backed off from the peak, but it hasn’t given up much ground. The CBT 200™ now is down 57 points or 1.4% from the all-time high, set four weeks ago, while holding on to a gain of 3.3% so far in 2007. The index is also 15.3% above its 52-week lows, set last summer. So, even if the last week wasn’t edge-of-the-seat stuff, biotech seems fairly healthy.

However, breadth was slightly negative, though not so much that it could be called a divergence. There were 103 biotech companies that traded higher, a number that was slightly eclipsed by the 111 biotechs that gave up some value. Thus, there was a small plurality of 1.1 decliners for every advancing issue. Among companies with big changes in price, there were 15 biotechs that gained 10% or more, against just 7 companies that lost a double-digit percentage, a ratio of 2.1 big winners for every big loser. The average share of a biotech company (taking out the market capitalization factor of the index) shows a substantial gain of .88%.

Once again, the cause for the discrepancy between this figure and the much smaller gain of the CBT 200™ can be laid at the feet of Amgen (AMGN), which dropped 3.4% over the course of the week. Given Amgen’s size, it makes a huge impact on the index.

The IPO market took a week off during the last week, and it will do the same in the upcoming week. After that, two biotechs are scheduled to make their public market debut: OncoGenex (OGXI), a company seeking to develop products that fight resistance to chemotherapies, and Rosetta Genomics (ROSG), which develops microRNA products for diagnostic and therapeutic purposes.

Filing last week were two biotechs, NovaBay and BioHeart, and two device companies, Insulet and TomoTherapy. Also of interest was the initial IPO filing for JMP Securities, an investment bank with a strong presence in life sciences, led by Bob Carey.

The best performing sector of biotech is currently the group of companies that have come public over the past four quarters, a group that boasts an average gain of 41%. The group took a rare week off, however, slipping .5% last week, But after all, they’re entitled. The best advance in the sector was a 30% jump by SGX Pharma (SGXP), which received an analyst upgrade from JMP Securities (see above). SGX also provided an update on its cancer drug candidates, all in pre-clinical testing. Since the failure of its leukemia drug last August, SGX had to go back into the lab. SGX gained $1.23 to end at $5.31, which puts the stock 12% under its IPO price of $6.

On the CBT 200™ list, the leader last week was Onyx Pharma (ONXX), which posted a spectacular 126% gain. On Monday, Onyx reported that Nexavar, its kidney cancer drug, was also effective against liver cancer (see story). Onyx will report specific information about the trial at ASCO in June, but the data committee recommended stopping the trial early to give Nexavar to the placebo cohort. Later in the week, Onyx and its partner Bayer (BAY), reported higher than expected revenues for Nexavar, which is just completing its first year of sales. Speculation is widespread that Bayer will make a bid of Onyx, which now has a market cap of $1.2 billion. Onyx rose $15.49 to $27.75.

Dyax (DYAX) enjoyed a 34% run-up after the Motley Fool website ran a story on the company as a low-price, high-value stock. Motley Fool highlighted DX-88, a small protein being studied for use against a number of medical disorders, including hereditary angioedema [HAE]. Genzyme (GENZ) is a partner on the drug. Dyax climbed $1.18 higher to $4.63, enough for a market cap of $203 million.

CytRx (CYTR) was 26% higher, benefiting from a positive write-up in BusinessWeek. BusinessWeek pointed out that CytRx will present at the Roth Conference being held this week, discussing its new move into RNAi. The new initiative is under the supervision of Ralph Mello, who received a Nobel Prize for discovering the technology. CytRx added on 85 cents to end at $4.10, making the company worth $289 million.

Tiny Avalon Pharma (AVRX) was up 19%, and Immunomedics (IMMU) rose 18%, both without releasing any news.

In sixth place, Germany-based GPC Biotech (GPCB), a company with a market value of over $1 billion, was a 16% winner last week. The company completed its request for FDA approval of satraplatin, a platinum-class drug for prostate cancer, last week, and it will discuss results of the Phase III trial at a conference next week. GPC in-licensed the drug from Spectrum (SPPI), and it sold the European rights for satraplatin to Pharmion.

In honor of President’s day, all markets will be closed Monday, February 19. Trading resumes on Tuesday.

Disclosure: none.