Trial results, M&A lead biotech to hot July

A lot of attention has been paid to the biotech industry's struggles this year. A derth of funding options have caused many biotechs to cut jobs, suspend programs or go out of business entirely. But while the industry has been suffering through some challenging times, July proved to be a hot month for biotech stock as several key announcements led the sector to its best July performance in years.

Unexpectedly positive late-stage data [1] from Human Genome Sciences' experimental lupus drug Benlysta drove the company's stock up 395 percent last month, and the company quickly took advantage of its good fortune to raise $310 million in a public offering. Those kinds of returns have caused more investors to take a closer look at the industry as a whole in the hopes of finding similar diamonds in the rough.

And HGS wasn't the only biotech with something to celebrate. Targacept landed a $10 million milestone payment from partner AstraZeneca as the pharma company elected to development of Targacept's ADHD therapy. That was followed by more good news [2]: positive results from a Phase II trial of depression drug TC-5214. That sent Targacept's stock up 338 percent. Meanwhile, Orexigen Therapeutics posted good results from three Phase III trials of its diet drug Contrave, clearing the way for FDA approval.

On the M&A side of things, Medarex's shares skyrocketed when Bristol-Myers Squibb announced a $2.1 billion buyout [3] of the company. At $16 a share, the deal represented a 90 percent premium over Medarex's closing stock price before the buyout was announced.

"The general markets have now experienced four excellent months of gains," Steven Burrill told Lab Manager Magazine. He warned, however, that the biotech industry's growing pains aren't over yet. "We don't yet believe biotech is fully back on track as many companies are still struggling to find the necessary funding to maintain their operations, almost half of US public biotechs have market caps below $100 million and we are seeing companies still consistently turning off their lights for the last time."

- here's the report [4]