The protracted takeover battle for Medivation (NASDAQ:MDVN) and a healthy M&A scene elsewhere helped keep shares in small and mid cap drug developers buoyant in the third quarter. The likes of Actelion (OTCPK:ALIOY), Seattle Genetics (NASDAQ:SGEN) and Exelixis (NASDAQ:EXEL) have added billions in value so far this year.
There have also been some substantial fallers, of course. The decline of Endo (OTCPK:ENDO) continues, crushed by its debt pile, while clinical setbacks mean Ionis (NASDAQ:IONS), Alkermes (NASDAQ:ALKS) and Infinity (NASDAQ:INFI) rank as some of the sectors biggest share price disappointments.
Pfizer’s $14bn acquisition of Medivation had a knock-on effect on Seattle Genetics and Actelion, raising hopes that the similarly sized biotechs might also be bought out. A spending spree by Allergan (NYSE:AGN), which has been enthusiastically consolidating some early-stage bets since its merger with Pfizer (NYSE:PFE) fell through, has also helped drive M&A hopes throughout the sector.
Meanwhile, Celltrion benefited from the rise in biosimilars, with Inflectra, its version of Johnson & Johnson’s (NYSE:JNJ) antirheumatic antibody Remicade, reaching the US in April, making it the second biosimilar approved there.
The biggest mid-cap fallers have all been the victims of either clinical setbacks or strategic disruptions.
Endo International saw its valuation tumble as its Valeant (NYSE:VRX)-like strategy of debt fueled acquisition fell out of favor with investors. Perrigo (NASDAQ:PRGO), meanwhile, has seen its chief executive defect to rival Valeant.
On the clinical side, Ionis has suffered from a safety concern over amyloidosis project IONS –TTRRx, as has Juno with its CAR-T project JCAR015. Alkermes saw its big pipeline hope, depression drug ALKS 5461, stumble in a phase III trial.
Exelixis takes the top spot among the smaller players partly thanks to positive data on its renal cell carcinoma treatment Cometriq.
Indivior’s (OTCPK:INVVY) shares have climbed after the group won a crucial legal battle in the US over its Suboxone film. A pivotal trial hit for its follow-on asset RBP-6000 also helped the company.
Meanwhile GW Pharma (NASDAQ:GWPH) is still gaining ground with its cannabis-based product Epidiolex. Since June 30 the anti-epilepsy drug has performed well in two trials for the rare disorder Lennox-Gestaut syndrome, fanning the flames of acquisition rumors.
Among the small-cap fallers, clinical setbacks were mostly responsible for share price collapses, with the demise of Infinity’s duvelisib, and failure for Novavax’s (NASDAQ:NVAX) RSV F vaccine.
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