So we’re pretty much midway through the week in the biotech space, and there’s been plenty of action so far. With the healthcare bill in the US failing to pass at the end of last week, the healthcare and pharmaceutical sector as a whole is going through a period of some uncertainty right now, and this is weighing on sentiment a bit. With numerous catalysts hitting press to stir things up a bit, however, even heavy sentiment and the risk aversion it brings can’t suppress volatility entirely.

With this in mind, here’s a look at two of the biggest movers this week so far, and what’s driving the action in each. The two companies in question are TESARO, Inc. (NASDAQ:TSRO) and Foamix Pharmaceuticals Ltd. (NASDAQ:FOMX).

So let’s kick things off with Tesaro.

This one’s rooted in an FDA approval – the holy grail of biotech catalysts. On Monday, the company announced that the agency had approved a drug called ZEJULA (which many reading might already be familiar with by its niraparib moniker). It’s an ovarian cancer target indication asset, and there are a few things about the approval that hit press as better than expected, and that in turn, have resulted in Tesaro picking up some real upside momentum on the back of the news.

The first is that the approval has come far earlier than expected. Tesaro had previously issued guidance that painted mid 2017 as the period to keep an eye on for an FDA decision, and a first quarter approval therefore came as a bit of a surprise. It means that the company get to work marketing the drug that little bit sooner than hoped, and Tesaro expects to launch end next month.

The second is the spectrum of coverage that the approval affords ZEJULA. It’s approved for recurrent ovarian, fallopian tube, and primary peritoneal cancer, and perhaps even more surprisingly, can be expanded to cover BRCA ovarian, a patient population that Tesaro had previously expected to have to carry out an extra phase III trial in order to gain approval for.

For those new to this asset, it’s a PARP inhibitor, and it’s been one of the most closely watched PARP assets in the development space for the last twelve months, having become a sort of bellwether for the drug class. It’s approval, therefore, and perhaps more importantly, the spectrum and nature of said approval, is sending positive collateral impact towards the rest of the PARP players.

At time of writing, Tesaro is actually down on the day’s open, having initially gained close to 10% on the news. Chances are the dip is temporary, and that we will see some degree of recovery as the session in the US matures.

Moving on, let’s look at

This one’s not quite so positive.

The company just announced that its lead development asset, an acne drug called FMX-101, has failed a late stage study. The drug, which Foamix is developing for the treatment of moderate to severe acne, and was under investigation as part of two separate (but related) phase III investigations. The two trials totaled more than 960 patients, and looked at the drug against a couple of co primary endpoints. In one of the trials, a trial called Trial 05, the drug hit on both the coprimary endpoints. In the second, however, it only hit on one of the endpoints, and so technically failed to hit on the trial.

The important thing with this situation is that acne (and many dermatology target assets) are generally required to hit across endpoints in two separate studies before submission and approval. As such, there’s very little chance that Foamix can use the data it has in hand to support an application to the FDA, which either means it’s got to drop the program altogether, or conduct further studies. The former is obviously not good, but the latter is tough because studies (especially those at the scale required in an acne target) cost a lot of money, and cash at this end of the biotech space is always tight. Equity raises result in dilution, and dilution is not good for shareholders.

Management hasn’t yet revealed its planned pathway, but we’re watching closely for any update.