Enough Already! I Can Read!

As I've written before, in the wrong hands Powerpoint should be considered a weapon of mass destruction, and right now I'm being attacked at the Rodman and Renshaw biotech confab in New York City. The presentations are worse than usual (if that's possible) and I wanted to jump up yesterday and scream, "stop reading your slides!"

I didn't -- which was the better part of valor -- since the room (and most of the conference) is standing room only.

And that's the great news for biotech and for investors. This is a confab for itty-bitty companies, for the most part, more concerned with molecules and mice than markets for products. That being said, there are a large number of emerging companies, some of them quite attractive.

What's hot? Cancer (as always), central nervous system disorders (especially orphan drugs), and medical diagnostics -- first time I have ever seen this level of interest at a major conference.

I am currently sorting and sifting information -- more to come -- if I can survive these presentations. Right now yet another speaker is assuming everyone in the room is illiterate and he's reading from his slides.

There is money to be made here, if you could instruct these weenies how to present a story to humans -- or investors, often a different species.

Michael

Day Two at Rodman and Renshaw

Day two at the Rodman and Renshaw conference was interesting. The dining room couldn't handle anywhere near all the attendees at lunch -- they ran out of box lunches, snacks and coffee, and you could barely navigate from one session to another because of the crowd.

Why am I wastiong your time with this? Because this overattendance means there is tremendous interest in biotech and life sciences -- even the little outfits that dominate this conference -- which means more money flow and higher stock prices.

What was also interesting was the new interest, on the surface, in obesity drugs. I say surface because the formal presentations were standing room only, while the breakout sessions to ask management questions were empty. I think it's a great contrarian indicator that the interest in this class of drugs is growing, but it's early and investors can get in before the lemmings rush in.

Three companies with huge, pivotal trials drew a lot of interest -- Arena Pharmaceuticals Inc.(ARNA), Orexigen Therapeutics (OREX) and Vivus Inc. (VVUS). Stay tuned, more on obesity and the conference tomorrow.

Biogen-Idec: Time To Buy?

No. It isn't time to buy BIIB.

Should I end this post right here? No. I've spent the last two weeks NOT writing and, instead, seeing what other blogs are doing to elicit feedback. The answer is pretty simple: They're writing about stocks and the news about diseases that directly point to stocks.

So, here we go with gen 2 of the BiotechBlitz.

Biogen put itself up for sale due to pressure from outside investors -- namely Carl Icahn. The stock ran up big time. I told my subscribers to get out after the run up and they cleaned up, since we had the position a long time. Now the stock has since come way back down.

So, what's going on? Was the run up pure trading frenzy or is there value in the company and the stock that makes it a buy at current prices of around $70?

Yes and no.

Yes, there is a lot of value if someone buys BIIB as it's quite a valuable asset to a dinosaur big-pharma outfit.

No, if Biogen-Idec doesn't get bought, both from an investment and a trading perspective.

If the sale of the company is called off, the stock will temporarily go down between $5 and $10, maybe more. I believe it put itself up for sale to get Icahn off its back -- otherwise there is no logical reason to sell the company, given the current and future success of approved products in the marketplace and BIIB's pipeline.

And, if no one has made an offer, yet, I don't think one is coming (I bought some crow at the local grocery store just in case I'm wrong about this). But the company is not worth more than $70 bucks a share at current growth projections, even though I believe multiple sclerosis treatment Tysabri will become the industry standard within five years.

Speaking of Tysabri, and since you all like stocks, my next post will be about Tysabri partner Elan (ELAN). And if you want to read more about how the whole Biogen thing went down, check out Mike Huckman's blog. He is the best pharma reporter in the business (CNBC) and his blog can be found at http://www.cnbc.com/id/15837675.

Elan (ELAN) -- Not Yet

I get more e-mail about Elan (ELAN) and Amgen (AMGN) than any two companies.

Elan is an Irish pharmaceutical that was plagued by serious accounting scandals several years ago, and has emerged as a serious biopharma outfit with a major new multiple sclerosis drug on the market, Tysabri, jointly developed and marketed with Biogen-Idec (BIIB). Elan has other partnerships to develop other CNS (central nervous system) treatments -- notably one for Alzheimer's disease wth Canadian company Transition Therapeutics (TTHI). But the key to the stock in the next 6-18 months is sales growth for Tysabri.

Tysabri is easily the best-in-class MS drug. It was introduced, then pulled suddenly when two patients died and another fell ill from a rare brain disease (PML). It was a matter of the FDA badly overreacting -- all three patients were seriously immuno-suppressed due to medications they were taking for other illnesses. The FDA finally gave the go ahead to market the drug under highly restrictive conditions.

Over time, 1-3 years, I expect the drug to prove relatively safe and gain widespread market acceptance just because it simply is a better drug, and MS patients are very knowledgeable about their disease and treatments, and Tysabri is closely monitored.

That being said, the growth in revenues will not be fast enough to satisfy Wall Street and the stock will languish and drift for too long to make it worth while getting in right now.

Take a look at Elan in a year or 18 months when there is a clearer path for Tysabri and ELAN's Alzheimer's drugs are closer to producing meaningful trial data.