Our first post! Time for a whisky -- well, it is almost always time for a whisky.
Yes, I still like ALKS and NKTR -- Alkermes had very strong earnings in Q4, announced after the close today, and raised guidance for 2007. And Vivitrol, the alcoholism treatment that disappointed last year, had smallish ($5MM) but better than expected sales.
Nektar seems to have a solid technical floor at $12 -- I am a bull on this stock despite its steady decline.
Michael
The games are about to begin....men and women in suits (I am wearing a sweater, thank you) and roughly three hundred companies from the biotech and life sciences industries ready to present -- they hope. This conference is actually an important venue for the little guys hoping to get the word out about a new product, their own company, things of interest to investors.
Comments to this blog and from attendees to my seminars at the Money Show have me looking at my own buy list, some interesting prospects and three companies not previously on my radar...GenVec (GNVC), Indevus (INDV) and Vical (VICL).
Stay tuned.
Michael
I receive a good many questions about Celgene and the answer has been the same -- among the big and mega caps, Celgene has been too dependent on the growth of a single product, Thalomid (48% of sales) and has a weak product pipeline given its size. Thalomid sales are also slowing with growth around 2%-3% per quarter. And things got considerably more complicated in the past few weeks as generics company Barr Labs (BRL), filed with the FDA to bring generic Thalomid to market when the patent expires. This cannot happen any earlier than 30 months, probably a bit more, but is a clear warning shot about future revenues and earnings.
On the positive side, a new cancer drug, Revlimid, is growing rapidly on the way to being a blockbuster -- can it replace Thalomid short and long term? And even if it does, the valuations on this stock are downright bizarre compared to Genentech (DNA) and Biogen-IDEC (BIIB), mega caps with much deeper pipelines and, in the case of Genentech, much faster growth.
Bottom line -- you can do better in the cancer and the mega cap part of the market.
MS
Thanks for the questions on Palomar Medical (PMTI), Exubera from Nektar (NKTR) and Pfizer (PFE) and Cell Genesys (CEGE).
Palomar Medical -- this kind of sell off has been typical of the stock for the past four years as it rises sharply then pulls back as professional investors take profits and get nervous about something -- and unreasonably so. PMTI has an extremely strong grip on the core technology of its marketplace, is very well managed, still has the upside catalyst of the launch of the home hair removal device and the next step in the home fat removal device with Johnson & Johnson (JNJ) and this is a good buying opportunity. In the future, investors should consider selling calls after the company spikes on good news, generate some cash, go to dinner or buy some puts. If investors had sold calls above $52, and bought $50 calls, both close in, you would have doubled or tripled your money in a few days.
Exubera -- I am more disappoint4ed than anyone -- except the folks at Nektar -- about Pfizer's slowness in marketing Exubera. I am still a bull, in part because PFE has committed to spending $50 million on education and marketing as well as direct to consumer advertising around mid year. Please remember, the company is mature, has two major technology franchises, lots of licensees and products on the market or in late stage development and pounds of cash, so there is little company risk. It is also unloved on Wall Street - another good thing for the longer term.
Cell Genesys has an interesting product that will go into Phase III trials mid-year. The company is working on a prostate cancer "vaccine" that uses different technology and is often compared to the personalized prostate cancer treatment from Dendreon (DNDN) now under review by the FDA. The FDA should make a decision no later than May 15th on this treatment from Dendreon, called Provenge, and Cell Genesys stock will move alongside DNDN stock. If there is an approval for Provenge, not only will the stock move on that approval but will also move when CEGE begins trial enrollment in the summertime.
At the request of a subscriber to my newsletter ChangeWave Biotech Investor www.changewave.com, I visited with GenVec (GNVC) during a major investment conference in New York last week. GenVec is an old fashioned technology driven biotech company -- they have a core technology platform for building gene based drugs and vaccines and push this into various treatments and vaccines, which is a more expensive path than focusing on a single market or disease but fairly common in the life sciences and biotech industries.
Without getting into too much technical detail, their Phase III cancer drug for pancreatic cancer has done well in early trials and interim data should be available mid-year. This kind of treatment is administered locally, applied directly to the pancreas, the drug being designed to stimulate anti-cancer proteins that will attack a tumor. Last month the company received approval from the FDA to include in this trial an endoscope based application of the treatment -- through a tube pushed down the digestive system of a patient.
This cancer treatment is in earlier stage trial for other forms of cancer and is extensively to most kinds of solid tumor cancers.
Their vaccine business is moving along as well in part due to heavy funding by Uncle Sam and they have programs for malaria, HIV, flu and avian flu. Most of the development for vaccines is "cost free" to the company but they retain rights to the products, although they will have to license them at reasonable terms if approved several years from now.
I need to think about this one -- but the interim results from their pancreatic cancer treatment were encouraging, this form of cancer is almost always fatal, and the FDA gives a lot of leeway to companies working on treatments for these kinds of deadly cancers. Come back and visit or look for more discussion in ChangeWave Biotech Investor at www.changewave.com.
For those of you who subscribe to ChangeWave Biotech (www.changewave.com) you are aware I recently closed the position in Neurochem (NRMX) with a nice gain (50% and change) although it was well off the highs for the stock. I want to spend a bit more time explaining why the debate about its Phase III Alzheimer's treatment Alzhemed was making me, and many others, a bit nervous. The debate is between a handful of bulls - including Rodman & Renshaw, an investment bank and broker - and many other analysts, including our friends at Biomed Tracker, who rate the possibility of an FDA approval as less than the average for other AD drugs.
I have read various analyses and what I see is the company splitting hairs - while Alzhemed was not any more effective than placebo in a three month Phase II study the company obtained permission to move forward into Phase III arguing the Phase II was too short. They supplemented this argument with data showing Phase II patients continuing on the drug and who were mildly, rather than moderately impaired, did show improvement in certain cognitive functions. These patients were also using another treatment, something called acetyl-cholinesterase inhibitors (check out http://www.alzheimers.org.uk/research/Cure/drugs.htm)
while patients in getting a placebo were getting just that, a placebo, nothing else. Put it all together and it was time to take profits and time for other potential investors to go on the sidelines, for if top line data, to be published (probably) in April or May is not good this stock will get killed. If the results are good, every technical indication for the stock says it will hit a ceiling around $25 (it is now around $17) -- and the risk reward is not worth it, a potential 50% gain versus a potential 50% or more loss built around a binary event.
Good luck to the company -- the world desperately needs almost any kind of AD treatment -- but the stock is very problematic right now.
