Conatus (CNAT - Free Report) is ending the year on a high note with the company signing a lucrative deal with Swiss pharma giant, Novartis. Investors applauded the deal sending the company’s shares soaring 141.3%. Meanwhile, Gilead (GILD - Free Report) was hit by a jury decision awarding $2.54 billion to Merck in a patent infringement lawsuit.

Recap of the Week’s Most Important Stories

Conatus Skyrockets on Novartis Deal: Conatus, which is focused on the development and commercialization of liver disease treatments, saw its shares shoot up on an agreement with Novartis. The deal will see the companies collaborating for the development and commercialization of Conatus’ lead pipeline candidate, emricasan, which is being developed for nonalcoholic steatohepatitis or NASH, a common but often “silent” liver disease. Conatus will get $50 million upfront, $7 million following the exercise of the license option and up to $650 million on the achievement of development, regulatory and commercial milestones as well as royalties on future sales. The agreement covers emricasan single-agent indications and future emricasan combination products.

Interest in NASH has picked up with companies like Allergan pursuing deals in this area, which represents significant commercial opportunity. In a few years’ time, NASH is expected to become the leading indication for liver transplant ahead of chronic hepatitis C and alcoholic liver disease. The market could be worth billions of dollars and many companies are hoping to cash in on this opportunity.

Clovis Drug Gets Accelerated Approval: Clovis (CLVS - Free Report) got a boost with the accelerated FDA approval of its advanced ovarian cancer treatment, Rubraca. Approval came a couple of months ahead of the PDUFA date with Rubraca being the first and only PARP inhibitor in the U.S. for the treatment of advanced ovarian cancer patients who have been treated with two or more chemotherapies and who have deleterious germline or somatic BRCA mutations.

Priority Review for TESARO Drug: Cancer-focused TESARO’s (TSRO - Free Report) PARP inhibitor niraparib has been granted priority review in the U.S. which means that a response from the FDA regarding the experimental ovarian cancer treatment should be out by Jun 30, 2017. Importantly, the agency said that it is not planning to hold an advisory committee meeting for the candidate. TESARO’s shares have been on an upward trend ever since the company announced promising data on niparinib in late Jun 2016. The company has outperformed the Zacks-categorized Medical-Drugs industry year-to-date (YTD) with shares gaining 160.9% during this period compared to the industry decline of 25.3%.

Gilead Hit by Jury Decision in HCV Case: Gilead suffered quite a setback with a jury in the U.S. District Court for the District of Delaware ordering the company to pay $2.54 billion to Merck in damages for infringing upon a patent for methods used to develop sofosbuvir-based medicines for the treatment of patients with hepatitis C virus (HCV) infection, including Gilead’s blockbuster drugs Sovaldi and Harvoni. With the jury also concluding that Gilead willfully infringed upon the patent, the judge may increase the damages award up to a multiple of three times.

Ionis Presents Volanesorsen Data: Ionis presented late-stage data on its antisense drug, volanesorsen. The company said that volanesorsen met the primary endpoint in the study that was conducted in patients with severe hypertriglyceridemia. The results were consistent with phase II findings. Not much information was provided on the safety front though the company noted that 13% of treated patients discontinued due to injection site reactions (ISRs) and 7% due to other non-serious adverse events. Moreover, there were no serious platelet events in the study.  

Volanesorsen is in four phase III studies with top-line data from another pivotal study expected in the first quarter of 2017.

Biogen Announces New CEO, Approves Hemophilia Spin-Off: Biogen (BIIB - Free Report) announced the appointment of its Executive Vice President and Chief Commercial Officer, Michel Vounatsos, as the new Chief Executive Officer (CEO) and member of the Board of Directors, effective Jan 6, 2017. Vounatsos will be succeeding George A. Scangos. The new CEO’s goals include gaining FDA approval for Spinraza (spinal muscular atrophy), growing the company’s multiple sclerosis (MS) franchise, focusing on the Alzheimer’s disease program and boosting the neurology and neuro-repair pipeline.

Meanwhile, the company’s board of directors approved the planned spin-off of the hemophilia business, which will be known as Bioverativ Inc. A special dividend distribution of all of the outstanding shares of Bioverativ common stock was also declared. Biogen shareholders will get one common share of Bioverativ for every two shares of Biogen common stock held of record as of the close of business on Jan 17, 2017.

Biogen is a Zacks Rank #3 (Hold) stock.

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The NASDAQ Biotechnology Index was up 0.7% over the last five trading days. Among major biotech stocks, Alexion (ALXN - Free Report) gained 6.1% while Gilead lost 1.1% reflecting the HCV lawsuit damages. Over the last six months, Biogen was up 20.3% while Alexion lost 12.5%.

What's Next in the Biotech World?

Watch out for the usual pipeline and regulatory updates from biotech companies. Moreover, Sanofi is rumored to be close to announcing a deal with Actelion (ALIOF - Free Report) which could be worth up to $30 billion.