AMGN Amgen Inc

By Charley Grant 

Biotechnology, lately the stock market's laggard, may finally be on the mend.

Amgen announced a highly anticipated clinical trial involving its new anti-cholesterol drug, Repatha, was successful in reducing the risk of cardiovascular events in patients with heart disease. That should bolster the case for doctors to prescribe Repatha, which carries a price tag above $14,000 a year before rebates and discounts, instead of older statins that cost much less. Amgen shares were up 4% Friday morning. Shares of smaller biotech companies developing similar drugs were higher as well.

The good news comes with some caveats: Amgen won't present the complete trial data until March, so it remains unclear to what extent Repatha improves health outcomes. Repatha is also subject to a legal battle with Regeneron and Sanofi surrounding the intellectual property of their competing drug, Praluent.

Still, the positive result is significant. Repatha came to the market in 2015 amid high expectations, but total sales so far have been less than $150 million. Payers have pushed back against the drug's relatively high price absent hard data on cardiovascular outcomes, and as a result most of the prescriptions issued were turned down by payers such as insurers.

But expectations for Repatha are still high over the long term. Analysts expect nearly $3 billion in annual sales by 2022, according to FactSet. Negative data on the drug would have called those expectations into question.

Since sentiment plays a large role in biotech stock prices, the trial success is also good news for the industry overall.

While drug pricing controversies and fears of new regulation battered stocks last year, so did a relative absence of positive clinical data. New drug approvals dipped to a multiyear low in 2016, and high profile clinical trial failures in key diseases like Alzheimer's and lung cancer helped dim investor enthusiasm.

Risks to the sector haven't vanished altogether. But with the Nasdaq Biotechnology Index more than 25% below all time highs, a little positivity might go a long way for shareholders.

Write to Charley Grant at charles.grant@wsj.com

(END) Dow Jones Newswires

February 03, 2017 12:44 ET (17:44 GMT)

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