JMP Sees A 'Negative Market Tone' In Biotechnology

In a new report, analysts at JMP Securities focused on biotech stocks and recent developments in the world of biotechnology. Overall, much of the sector has been under pressure recently from a negative market tone and “puzzling” Endocrinology and Metabolic Drug Advisory Committee (EMDAC) discussions.

EMDAC commentary
JMP analyst Michael King, Jr. was surprised by some of the recent actions and statements made by the EMDAC. King describes a perceived lack of consideration on the part of panelists when it came to some important issues.

“The explanations given by the FDA, specifically concerns over mixed studies of fibrates and the negative studies of CTEP inhibitors and niacin, strike us as disingenuous, at best,” King writes.

The EMDAC sent Amgen Inc AMGN and the partnership of Sanofi SNY and Regeneron Pharmaceuticals Inc REGN home with a recommendation in favor of all indications they sought except for the largest one (patients with mixed dyslipidemia intolerant to statins). King believes that this decision set a “negative tone” and has certainly influenced biotech stocks.

Other news
Recent news from the American Diabetes Association was generally good, especially regarding Merck & Co Inc MRK’s TECO study.

Data presented at the European Hematology Association (EHA) conference was also positive for names like Acceleron Pharma Inc XLRN, Alny Pharmaceuticals Inc ALNY, Ariad Pharmaceuticals Inc ARIA and Karyopharm Therapeutics Inc KPTI.

Stock picks
JMP believes that there are plenty of opportunities remaining in the biotech space for selective investors. The group of biotech stocks that JPM currently rates Market Outperform includes oncology companies Celgene Corp CELG, Incyte Corp INCY, Medivation Inc MDVN and Pharmacyclics Inc PCYC.