Healthcare is traditionally considered a defensive sector and in 2011 it lived up to its name. Investors flocked toward it, driving it higher by 13.2 percent for the year as new regarding advancements in cancer, AIDS and hepatitis C stood out as some of the best news amid a murky global economy.
Drug Break Throughs
On the HIV/AIDS front, research was published that confirmed that a powerful HIV drug could dramatically reduce transmission rates while improvements in gene therapy and other means of minimize the HIV infection spurred talk of a potential cure.
Cancer had a number of massive breakthroughs in areas ranging from prostate cancer to Lukemia. Medivation, Inc. (MDVN) was celebrated have trials of its experimental new prostate cancer treatment exhibited tremendous success. Along with their partner Astellas Pharmaceuticals (ALPMY), Medivation revealed that its new treatment clearly extended the lives of the men taking the drug. Excellent Results from Phase III Trial Medivation’s drug candidate MDV3100 were cheered by investors.
Pharmacyclics (PCYC), also had a breakthrough year, announcing a major deal with J&J (JNJ) and debuting promising data for its lead agent, PCI- 32765. The drug exhibited noteworthy results in attacking CLL (chronic lymphocytic leukemia) and MCL (mantle cell lymphoma) over the course of two studies. Two-thirds of patients had a response according to the announcement, especially impressive given the high safety profile of the drug.
Hepatitis C drug breakthroughs also made major news throughout 2011. Four new hepatitis C drugs dramatically increased cure rates to close to 70 percent. Among them was Vertex and Johnson &Johnson whose drug, saw sales of $75 million in its first five weeks on the market.
J&J also made headlines after merging with medical device maker Synthes in a $21.3 billion merger. The move, while pricey, positions J&J well to capitalize on the millions of baby boomers entering old age, who will be demanding the hip and knee.
Another successful merger more in the realm of biotech was the acquisition of Pharmasset (VRUS), "a clinical-stage pharmaceutical company committed to discovering, developing and commercializing novel drugs to treat viral infections, by Gilead (GILD) for $137 per share.
Prior to the merger, shares were trading at $72 a share.
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