Biotech Stocks Sharply Rise, Fall

Joel Anderson  |

Several biotechnology stocks moved sharply upwards today with good news ranging from strong earnings reports to beneficial court rulings helping to drive buying activity despite a down day for markets worldwide. Several other companies, though, took major losses on the day.

Court Ruling Buoys Momenta

Momenta Pharmaceuticals, Inc. (MNTA) had a bullish day, seeing its stock jump 20.92 percent on news of a court ruling in Massachusetts that will ban Amphastar Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc. (WPI), and International Medical Systems, Ltd. from selling a generic version of their drug Lovenox, which is used for treating blood clots in the legs. Momenta, a Cambridge, MA-based company specializing in the characterization and process engineering of complex molecules, saw its stock price spike in after hours trading Friday following news of the court ruling and the gains persisted into trading Monday. "In granting the motion, the District Court found that Momenta Pharmaceuticals demonstrated a reasonable likelihood of success on the merits of their claim," the company said in a statement. Watson Pharmaceuticals, meanwhile, saw its shares drop over 3 percent on the day.

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Spectrum Also Posts Significant Gains

Elsewhere in the sector, Spectrum Pharmaceuticals, Inc. (SPPI) saw its stock price surge to a 52-week high and finished the day up 7.36 percent. Spectrum released their Q3 earnings statements Friday, revealing record profits over three and nine month ranges. Product revenues for three and nine months were $48 million and $131 million respectively, meaning year-over-year gains of 300 percent and 350 percent. Profit in Q3 was $20.25 million, or $0.34 a share, as compared to analyst expectations of only $0.10 per share and well over last year's $4.17 million, or $0.08 per share loss. The record profits have benefited a stock that some viewed as suspect given that their profits are being driven by sale of the drug Fusilev, a drug that has benefited from a shortage of a cancer drug called generic leucovorin, which is manufactured by Teva Pharmaceuticals (TEVA), Bedford Laboratories, and APP Pharmaceuticals.

Other Biotech Stocks Sharply Up, Down

Zalicus, Inc. (ZLCS) saw shares jump by 15.75 precent today on heavy trading, over three times its normal volume. Zalicus releases its earnings report on Nov. 2nd and the buying could be in anticipation of good news there. Complete Genomics, Inc. (GNOM) jumped 14 percent today on light trading, most likely in response to the perception by analysts that the stock was undervalued.

Not all biotech stocks had a good day, though, as NPS Pharmaceuticals, Inc. (NPSP) was sharply down. NPS stock went into a free fall and finished the day down 33.38 percent on very heavy volume after news that three people had developed cancer and two had died in their Polish-based study on experimental Gattex. Gattex is intended to help reduce parenteral nutrition and intravenous fluid volume in subjects with short bowel syndrome. The Bedminster, NJ-based NPS stated that the patients were the only three to develop cancer out of the 566 studied. “The three cases of cancer have been reviewed by a safety review board comprised of independent experts and at this time no changes in study design or current monitoring of subjects in the trial have been requested,” the company said. The study, meanwhile, found that 91 percent of participants required less IV nutritional support.

Other biotech stocks down today include BioSpecifics Technologies Corp. (BSTC), down 10.88 percent; WuXi PharmaTech (WX), down 10.7 percent; and Auxilium Pharmaceuticals, Inc. (AUXL), down 9.64 percent.

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