In the third quarter of 2013, biotechnology indices outperformed the general market, with the Nasdaq Biotechnology index up 20.7 percent, almost double the 10.8 percent rise in the Nasdaq Composite Index. The Dow Jones Industrial Average was up just 1.5 percent and the S&P 500 was up 4.7 percent. Pushed by positive clinical trial, regulatory, and patent news, the Burrill Small-, Mid-, and Large-Cap Indices were each up more than 20 percent for the quarter. The Burrill Select Index was up 15.4 percent.

Anyone doubting the power of clinical trial results to make or break a company need look no further than Ariad Pharmaceuticals. The company’s shares lost two thirds of their value after Ariad halted enrollment in a pivotal trial of its cancer drug, Iclusig, as a first line treatment for chronic myeloid leukemia because of the number of serious blood clots in patients taking the drug.

Affymax lost nearly 93 percent of its value, plummeting from $19 per share on December 31, 2012 to $1.36 per share on September 30, 2013. Three patients died in a clinical trial of its erythropoietin agent Omontys for the treatment of anemia due to chronic kidney disease. Patients suffered anaphylactic reactions within 30 minutes of intravenous administration of the experimental anemia drug during dialysis treatments. A class action lawsuit is in place alleging that Affymax failed to disclose adverse side effects and thus misled investors. Bad news continued with the company announcing layoffs of 75 percent of its workforce, delisting from the Nasdaq in June, and the resignation of Ted Love, former executive vice president and head of research & development at Onyx Pharmaceuticals, from its board of directors.

GTX, the third quarter’s worst performer, fell 69 percent, from $6.60 to $2 per share, after two late-stage clinical trials of its selective androgen receptor modulator, enobosarm, failed to meet co-primary endpoints of preventing and treating muscle wasting in patients with advanced non-small cell lung cancer. Lean body mass was improved compared to placebo, but not enough for the drug to pass its trial. The company plans meetings with the U.S. and European regulators to discuss a path forward.

On the upside, Acadia Pharmaceuticals rose 491 percent since the beginning of 2013, leading all other life sciences companies that saw their shares rise in the year. The company’s share value rose from just more than $4.50 to $27.50 per share after it announced positive trial results for pimavanserin, its experimental treatment for Parkinson’s disease psychosis. The drug, a selective serotonin receptor antagonist/inverse agonist, markedly improved psychotic symptoms without compromising motor function. The trial results were so encouraging that the U.S. Food and Drug Administration will allow the company to skip a late-stage confirmatory trial and proceed directly with its new drug application filing. Parkinson’s disease psychosis develops in roughly 60 percent of patients with Parkinson’s disease and is associated with visual hallucinations and delusions. There is currently no FDA-approved therapy to treat Parkinson’s disease psychosis.

BioCryst Pharmaceuticals topped the list of biggest advancers in the third quarter of 2013; up more than almost 370 percent, from $1.55 to $7.30 per share, based on positive safety, tolerability, and on-target kallikrein inhibition in an early-stage trial of its oral drug for the treatment of hereditary angioedema, an accumulation of fluid under the skin that causes painful swelling. The drug suppresses production of bradykinin, the mediator of acute swelling attacks in hereditary angioedema, by inhibiting an activating protease. On July 31, the FDA removed the clinical hold placed on the drug candidate in November 2012, allowing inclusion of U.S. sites in future clinical trials.