The Week's Biotech Winner and Loser

Brandy is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

What’s the best way to choose the biotech winner and loser of the past week?

The easiest route would involve the companies with the biggest share price movements. That would make Idenix (NASDAQ: IDIX) the obvious loser with its over 30% drop after the FDA requested additional preclinical safety information for a hepatitis C drug. But that movement came from volatility that arose despite the fact that this wasn’t the first time Idenix has faced a similar delay.

But there were two companies last week that moved over 4% on the days of their news. And the stories of Sarepta (NASDAQ: SRPT) and Vivus (NASDAQ: VVUS) displayed the overall industry pattern much better.

Winner: Sarepta

Sarepta shares have soared over 800% in the past year thanks solely to the Duchenne muscular dystrophy drug eteplirsen. DMD is a degenerative X-linked muscle disease that usually leaves the young male patients wheelchair-bound. The life expectancy is under 30.  

Eteplirsen’s new data comes from a phase 2b extension study that was testing the drug against placebo using the six-minute walk, an important DMD metric. Trial patients would walk for six minutes and have the distance measured over the course of 84 weeks. Boys taking eteplirsen showed an improvement of 46.4 meters over the placebo arm. The boys also showed a relatively stable overall decline in walking distance.

Sarepta is overly dependent on eteplirsen’s success. But the efficacy data continues to impress and the safety profile hasn’t thrown up any warning signs. An FDA approval would serve a disease that currently has no real treatment options, and cement Sarepta’s developer reputation at the same time.

Loser: Vivus

Vivus was a news darling last year before the launch of its obesity drug Qysmia, which limped slowly out of the gate. But the company also has the erectile dysfunction drug Stendra.

Vivus reported results from a placebo-controlled study indicating that Stendra is effective within 15 minutes. The results were meant to inspire a label addition to the product, which was previously approved with a 30 minute dosage note.  

Fifteen minutes is an improvement on the hour recommended for Pfizer’s Viagra, but there are already once-daily ED drugs available that don’t require pre-game prep time. And there’s also the pesky fact that Stendra still hasn’t launched, despite receiving FDA approval last spring and a CHMP recommendation earlier this year. That’s because Vivus is hoping for a big pharma partner to  help push Stendra out into a saturated market.

But the delay could cost Stendra a shot at even a slice of that market. ED drugs will soon begin dropping off the patent cliff like lemmings. Viagra went off-patent in Europe last week, though it has a few more years of protection in the United States. ED drugs are notoriously costly and branded drugs won’t stand up against a wave of cheaper generics.

Foolish final thoughts

Sarepta's share price skyrocket over the past year isn't sustainable. But eteplirsen continues to show fantastic data in an area of unmet need, which could lead to an approval and higher pricing to counteract the low patient population.

Vivus is entering an erectile dysfunction field that’s stiffening with competition from generics. The Stendra news at least reminds people the drug still exists -- and Stendra's potential launch could steer some attention away from Qsymia's soft launch.

VIVUS' shares were clobbered after Qsymia's dismal launch. Investors everywhere are wondering whether the tide will turn for this fledgling drugmaker or if now is the perfect time to sell. In a new premium research report, the Fool's top health care contributor breaks down this complex story and explains the details VIVUS investors must know -- including reasons to buy and sell. To find out more about this premium report, click here now.

Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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