Biotech Movers: Cardiome Pharma Corp. (NASDAQ:CRME), Coherus BioSciences, Inc. (NASDAQ:CHRS) and Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD).

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It’s Tuesday morning and the start of the week has brought with it plenty of volatility in the biotechnology space. A number of companies have moved on various inputs and chances are we’re going to see a continuation of the early week volatility as things mature throughout the US session today. Here’s a look at three of the biggest movers from Monday in the US, with an analysis of what’s moving each and where things are likely to go next.

The three companies in focus for the session today are Cardiome Pharma Corp. (NASDAQ:CRME), Coherus BioSciences, Inc. (NASDAQ:CHRS) and Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD).

First up, then, Cardiome.

This one’s rooted in an FDA decision and, unfortunately for the company and its shareholders, it’s not a great one. During the session on Monday, Cardiome announced that the FDA has informed the company that the data package proposed by Cardiome would not be sufficient to support a resubmission of its BRINAVESS New Drug Application (NDA).  Cardiome has been pushing for approval in a target indication of the rapid conversion of recent onset atrial fibrillation (AF) but has had a number of setbacks along the development pathway for the asset. Markets we’re hoping that the most recent iteration of the application, the one that just got turned down, would mark the end of a rocky pathway. As it turns out, that’s not the case.

Technically, the latest news doesn’t relate to a resubmission. The company put together a proposal that included a data package and propositioned the agency in the US based on said package. The data included six years of accumulated safety data from sales of the drug in thirty-three countries and was augmented by interim results from over 1,100 patients enrolled in what the company called its SPECTRUM study.

As yet, we don’t have any concrete word on why the FDA has declined the application. The data looked pretty strong and the size of the dataset meant it (at first glance) looked robust in implication.

Cardiome has taken a hit on the news (the company closed out the session on Monday at a more than 30% discount to its session start capitalization) and chances are we’re going to see this one continue to exhibit weakness as the session matures today.

Moving on, Coherus.

Coherus is moving this week on the news that the company is about to conduct a private placement, which will see it raise up to $150 million in two tranches. The first of these two tranches will hit the balance sheet by the end of August, with 6,556,116 shares of common stock to be issued at an offering price of $11.44 per share. The capital will come from a Singapore based firm called Temasek.

Generally, when we see companies raise money like this, the capital raised is dilutive and the company in question takes a hit as a result. In this instance, however, because the placement is private and because it’s going through the above mentioned Singaporean entity, the funds won’t be dilutive to Coherus. No dilution means no proportionate revaluation, which means no standard depreciation. At the most recent close (Monday night) Coherus was trading for a more than 22% premium to its pre-announcement market capitalization. Exactly how long this premium will remain in place is unclear – there’s a good chance that the run is rooted in the lack of dilution as opposed to the implications of the raise itself and – if this is the case – the company could dip into the midweek session.

Finally, Ironwoood.

This one’s a bit of good news for shareholders. During the session on Monday, Ironwood announced the approval of Duzallo by the FDA as a once-daily oral treatment for hyperuricemia associated with gout in patients who have not achieved target serum uric acid (sUA) levels with a medically appropriate daily dose of allopurinol alone. This is an approval that markets have been waiting for some time and one for which there has existed a degree of outcome uncertainty over the last few months.

Ironwood is now in a position to build out its top line, so we’re looking for the company to appreciate further on a commercialization strategy execution.

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