The world might be a bright place for many but these two biotech companies have had better days. Biotech is a fast-paced, fiercely competitive industry that takes-no-prisoners if a promising new drug is delayed by the FDA or that income-generating patent runs out and the revenue stream dries up. Sometimes the setbacks are temporary and other times they are more serious.
One such company is Puma Biotechnology (NASDAQ: PBYI). Founded in 2010, they market themselves as a development stage biotechnology company that focuses on acquiring promising new therapies for the treatment of cancer. At this stage, Puma is a bit of a one-trick pony who have hedged their bets on PB-272 (oral neratinib) – a Pfizer-made drug that is supposed to help prevent the return of breast cancer. It raised red flags during the FDA’s review process due to the “marginal benefits” and the serious nature of the side effects.
Puma charged ahead with their newly-minted Nerlynx (neratinib) in 2018 and despite the tendency to give patients severe diarrhea, it was off to the races for those trying to avoid a repeat of their earlier breast cancer experiences. Fast forward to early June and Puma’s stocks plunged by 54 percent after first quarter earnings revealed a troubling plot twist – a 25 percent in product revenue since Q4 2018.
According to Puma’s powers-that-be, patients receiving the $10,00 a month treatment were deciding to opt-out earlier than expected and others had experienced a “dose delay” due which resulted in fewer bottles being sold. Stocks spiral dived after the report was released, ping from down 53.9 percent in May – hitting a new 52 week low at $12.22 USD on June 26. It’s not a good sign for a fast-growing drug revenue to so quickly after release but management isn’t about to accept defeat. There is still hope for their flagship pharmaceutical, they say, as its use becomes more widespread in international markets. Investors aren’t as optimistic.
Solid BioSciences (NASDAQ: SLDB) is another biotech that’s hit a roadblock lately. Co-founder Ilan Ganot launched Solid BioSciences after learning that his son Eytani had been diagnosed with Duchenne muscular dystrophy – a genetic disorder characterized by progressive muscle degeneration. Despite a back-story that would make even the most hard-hearted investor think twice before dumping an underperforming stock, Solid’s own tumbled as much as 40.9 percent in one day after patients dosed during a clinical trial experienced serious side effects from the treatment.
The stock hit a 52-week low on June 27, trading at $4.46 USD and investors are wondering what’s in store for Solid. With Pfizer and Sarepta Therapeutics working on competing treatments for Duchenne’s, Goldman Sachs analyst Salveen Richter wrote that Solid’s experimental SGT-001 drug was “competitively suboptimal”. With their most promising pharmaceutical product on hold, some investors are wondering if this will fell the foundering biotech once and for all.
Sources:
https://www.nasdaq.com/aspx/52-week-high-low.aspx?exchange=NASDAQ&status=LOW
https://www.fool.com/investing/2019/05/14/heres-why-solid-biosciences-fell-as-much-as-409-to.aspx
https://www.fool.com/investing/2019/06/05/heres-why-puma-biotechnology-shares-tumbled-539-in.aspx
https://www.marketwatch.com/story/acer-therapeutics-receives-crl-from-fda-for-edsivo-stock-halted-for-news-2019-06-25
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
