Biotech’s Got ‘Bad News and Worse News’ as Stocks Suffer
(Bloomberg) -- Investors are seeing little good news in the latest experimental drug data from the biotechnology industry.
On Thursday, after results from several clinical trials were released ahead of the upcoming American Society of Hematology, or ASH, meeting in San Diego, Spark Therapeutics Inc., Bluebird Bio Inc., and Trillium Therapeutics Inc. all plunged. Their drops led to an as much as 1.7 percent decline in the Nasdaq Biotechnology Index, which is now down 26 percent this year.
“There are two kinds of news in biotech these days, there's bad news and worse news,” Eric Schmidt, an analyst at Cowen & Co., said by phone. “Sentiment in this space is about as low as it's been in any point in time over the last few years.”
Those negative feelings are causing investors to read ASH data with a “glass half empty,” Schmidt said.
Spark fell as much as 25 percent, the most ever, and was down 23 percent to $35.98 at 1:13 p.m. in New York after it said that a patient on its gene therapy for hemophilia showed signs of resistance to the treatment. Bluebird slid as much as 20 percent, the most since Jan. 11, after its own gene therapy for sickle cell disease didn't help patients as much as hoped. And Trillium fell as much as 51 percent to $7.15, the most since November 2014, after two out of five patients taking a high dose of its drug for relapsed lymphoma had side effects that limited how much treatment they could take.
Drugmakers face increasing pressure from politicians such as U.S. Senator Bernie Sanders and payers such as prescription benefit manager Express Scripts Holding Co. Together, that's started to hamper companies' ability to raise the price of expensive therapies -- and is cutting into profit forecasts.
The next major moment for the industry may be the U.S. presidential election on Tuesday. The Democratic candidate, Hillary Clinton, has promised to take action on drug pricing.
To contact the reporter on this story: Doni Bloomfield in Boston at mbloomfiel12@bloomberg.net. To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Stephen West
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