The biotechnology space was overshadowed by earnings across the sector during the middle of last week but we did get a few releases detailing various fundamental inputs that translated into some volatility for the companies in question. Here is a look at two of those that moved, with an analysis of what’s moving each and where we expect them to go next.

The two companies in our crosshairs for today are Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) and Ionis Pharmaceuticals, Inc. (NASDAQ:IONS).

First up, Peregrine.

This one is a small biotechnology company that differs from the majority of its peers in the sense that it has both a research and development operation and a contract manufacturing operation. The former is where the real long-term revenue potential lies but the latter serves to bring in capital that offsets the necessity to raise equity by way of the public markets in order to fund pipeline efforts. The company has had a pretty rough 2017, trading down considerably on its end of year 2016 pricing, and the latest news has compounded that action.

Specifically, at the end of last week, Peregrine announced that it has plans to lay off 20% of its workforce in an attempt to reduce costs companywide. Cost cutting and restructuring is never a good sign when it comes to public companies, but sometimes, and especially as relates to entities at this end of the market, it doesn’t necessarily have to be a disaster. If management can put a program in place that allows Peregrine to focus the resources it has on hand post restructuring and, subsequently, can execute on this strategy efficiently, the reduction in workforce may be a long-term benefit from a shareholder perspective.

Markets have failed to see it this way, right now, however, and the company is trading down on the news. At the close of play on Friday, Peregrine went for $3.50 a share and will likely endure some further selling as the markets open on Monday.

Moving on, Ionis.

This one is a little different. Ionis is a much larger company than Peregrine (trading at around a $5 billion market capitalization) and is working to bring a number of different treatments to market right now. One of these, a rare disease drug called inotersen, was in development as part of a collaboration with GSK. At the end of last week, the two companies announced that GSK had refused to exercise an option that would’ve seen it carry the collaboration forward into a New Drug Application (NDA) submission and – in doing so – essentially ends the codevelopment program (for this asset, at least). This is another move that markets are widely interpreted as negative and Ionis lost somewhere in the region of 25% of its market capitalization in the back of the release. There have been some safety concerns associated with drug that were flagged up subsequent to the phase 3 study that will underpin its registration application and general consensus is that these safety concerns have contributed to GSK’s decision not to exercise its option. There is also the suggestion, however, that the decision is rooted primarily in cost-cutting efforts by the company’s CEO. GSK has spent the last six months trying to put down non-core assets and this has included a large number of development drug programs and, specifically, some rare disease efforts such as that associated with Ionis and inotersen.

The drug has been shown to work, and this is a rare disease with an unmet need so that the big pharma incumbent would drop it based purely on some (albeit resolvable) safety issues seems a little far-fetched.

Whatever the reason, Ionis now has to go it alone with this drug and we won’t be surprised if markets maintain the negative sentiment surrounding the decision by GSK to drop out of the program. The two companies remain tied together by way of another couple of programs and these have avoided the cut, so the news isn’t all bad for Ionis and its shareholders.

Management expects to have a registration submission with the FDA at some point during late 2017 or early 2018 so markets will be watching this one closely to see if GSK’s decision was a smart one or not.