It has been a horrible year for biotechs, with the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) down 21%, but Ophthotech Corp‘s (NASDAQ:OPHT) 85% nosedive Monday gives the other biotechs something to be thankful for, especially Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
REGN stock is up about 6% Monday morning after Ophthotech failed to meet its primary endpoint during Phase 3 trials for the treatment of wet age-related macular degeneration using a combination of Lucentis from Novartis AG (ADR) (NYSE:NVS) and Fovista, also licensed by NVS.
“We are very disappointed in the results from these trials, particularly for patients afflicted with wet AMD,” said Ophthotech CEO David R. Guyer, M.D. “We are thankful to the patients and clinical investigators and their staff for participating in the trials. We will continue to analyze the data from these two studies to better understand the trial results.”
Essentially, Ophthotech attempted to one-up Regeneron’s Eylea drug, also used to treat wet AMD.
Novartis, for its part, was counting on a successful trial to boost sales of its flagging Lucentis sales:
“The proven efficacy of Lucentis monotherapy was not improved by the addition of [Fovista,]” said Novartis’ Chief Drug Development Officer Vasant Narasimhan. “Together with Ophthotech we continue to analyze the data.”
What This Means for REGN Stock
Prior to today’s move, Regeneron stock was off more than 30%. And it’s that underperformance that prompted Chardan Capital’s Gbola Amusa to upgrade REGN stock from “sell” to “neutral”:
“Although we continue to have caution on the potential for Praluent to be taken off the US market or for a substantial royalty to be paid from Regeneron and partner Sanofi SA (ADR) (NYSE:SNY) to Amgen, Inc. (NASDAQ:AMGN), the recent underperformance of Regeneron suggests better market appreciation of Praluent patent risks.”
Today’s failure removes a significant amount of risk from Regeneron stock, at least from a competitive standpoint (there’s still plenty of political-related risk in the air for biotechs).
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.