Biotech Stocks Facing FDA Decision In December

(RTTNews) - Talks are gaining ground that the anti-regulation mindset of president-elect Donald Trump may not spare even the FDA. The first 100 days action plan released by Trump in late October suggested that he may seek to cut the red tape at the FDA, ensuring expedited drug approval processes.

Experts see a radical shift in the way the agency conducts its business under Trump, like dilution of regulatory requirements for clinical studies, import of more drugs from other countries and easing of regulations for off-label promotion of drugs.

Even as we brace for seismic shift in strategies at the nodal agency, a look back at what transpired in the regulatory scene in November revealed a fairly busy month. Cempra Inc. (CEMP) and Dynavax Technologies Corp. (DVAX) are two stocks that got pounded in November on regulatory news.

Cempra's experimental drug Solithromycin, for community-acquired bacterial pneumonia, or CABP, was only narrowly backed by an outside panel of FDA experts on November 4, 2016, with red flags being raised due to potential risk of liver toxicity. The regulatory agency's final decision is due in the coming weeks. Shares of Cempra have lost a whopping 65% so far this month.

Dynavax Technologies' biologics license application seeking approval of HEPLISAV-B for immunization of adults 18 years and older against hepatitis B infection was turned down by the FDA on November 14, 2016. The writing was already on the wall for HEPLISAV-B when on September 2, 2016, the FDA announced that the meeting of outside experts to review the hepatitis B virus, originally scheduled for November 16, 2016, was cancelled as more time was needed to "review and resolve several outstanding issues". Shares of Dynavax have lost over 52% so far this month.

Meanwhile, the NYSE Arca Biotechnology index had a stellar run in November, gaining over 10 percent thus far in the month compared to more modest nearly 4 percent advance by the S&P 500 Index. The strong upward movement was expected, given Trump's stance on drug pricing. As opposed to Hillary Clinton, who sounded out warning on price gouging, Trump has a more liberal stance on drug price regulation.

Now, lets' take a look at stocks awaiting regulatory news in December.