The biotech sector is headed for a higher 2015 finish despite struggling in the second half of this year. The iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) is up nearly 13% for
2015. But in the second half of 2015, the sector has fallen almost 5%.
The two main concerns investors have with the biotech sector are increasing scrutiny from politicians about the pricing strategy for drugs and high valuations. With the U.S. election in 2016, the pricing strategy of drug companies will come under further scrutiny. This is likely to keep the whole sector under pressure.
This morning, one biotechnology company came out with some important news. Amarantus BioScience Holdings Inc. (OTCQX:AMBS) is a biotechnology company focused on the development of products for Regenerative Medicine, Neurology and Orphan Diseases.
The company today announced that it has requested Rare Pediatric Disease Designation (RPDD) and Orphan Drug Designation (‘ODD) from the Food and Drug Administration (FDA) to treat GCMN with Engineered Skin Substitute (ESS).
According to AMBS, in the U.S., between eight and 80 births annually have incidence of GCMN. GCMN is a rare dermatological condition present at birth.
The FDA grants a "rare pediatric disease" to those drugs that target a disease that affects less than 200,000 individuals in the U.S., primarily aged from birth to 18 years.
As per the FDA’s Rare Pediatric Disease Priority Review Voucher program, a sponsor who receives an approval of a new drug application (NDA) or biologics license application (BLA) for a rare pediatric disease may be eligible for a voucher. The voucher can be redeemed to obtain expedited FDA review for any subsequent marketing application.
Holders of the voucher are allowed to sell or transfer them. Amarantus notes in its press release today that two priority vouchers have been sold for a combined $595 million in cash.
An ODD designation granted from the FDA provides a seven-year marketing exclusivity against competition, as well as certain incentives, including federal grants, tax credits and a waiver of PDUFA filing fees.
AMBS’s ESS is a tissue-engineered skin prepared from patient’s own skin cells. ESS is a combination of cultured pithelium with a collagen-fibroblast implant that produces a skin substitute that contains both epidermal and dermal components.
AMBS has had a really rough 2015 dropping from highs around $12.00 at the beginning of the year to current prices around $0.60. That being said, shares actually have been moving up solidly since mid-November, so investors will be closing watching trading in early 2016 to determine whether the November lows marked the beginning of a new uptrend for the stock.
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