PricewaterhouseCoopers (PwC) Predicts Strong Future For Biologics
PricewaterhouseCoopers (PwC) Reports that Biologics sector is expected to uphold deal activity in the Biopharma Industry for the rest of 2009.
The biotech industry, weakened by dried up credit and reluctant investors, has witnessed a 60 percent drop in the NASDAQ Biotech index from March 2008 to March 2009. PricewaterhouseCoopers reports that this decline will eventually result in an “uptick in biotech M&A and alliance activity in 2009, with a number of specific therapeutic and diagnostic segments driving the activity”.
Large growth is expected in the biologics sector as the revenue stream period is lengthened due to the perceived difficulty for generic drug makers to replicate the original branded products. Legislation is also being introduced to extend the data exclusivity period for biologics. There are currently more than 600 biologics in clinical trials for different indications, of which more than 250 target cancers (www.newsobserver.com). As a result, Biotech startups can be seen as important incubators of new drug development not only for traditional pharmaceutical companies but increasingly for large biopharmaceutical companies as well.
$2.7 billion has been invested into 245 human biotech deals by Venture capitalists in 2008, according to the MoneyTreeTM from PwC and the National Venture Capital Association based on data provided by Thomas Reuters.
Therapeutic and diagnostic biologics helped drive venture capital (VC) investment in the overall human biotech sector in 2008 and are the fastest growing subsectors. Investment in monoclonal antibodies rose 34 percent in 2008 to $640 million in 46 deals, up from $477 million in 41 deals in 2007. The immune response sector also saw an increase in investments to $494 million in 31 deals, up 90 percent from 17 deals in 2007. Additionally, four of the top 10 human biotech deals in 2008 were companies focusing on therapeutic monoclonal antibodies (Biolex Therapeutics, Inc ; OncoMed Pharmaceuticals – Q3&Q4; Catalyst Biosciences, Inc).
“In late 2008 and early 2009, we saw biotech stocks outperform the S&P 500 and the NASDAQ Composite for the first time in years,” said Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. “This show of investor confidence is a harbinger for an increase in M&A and alliance activity in the sector. Biotech startups will be attractive acquisition targets for larger pharmaceutical companies interested in diversifying their portfolios. We expect to see a significant increase in this sort of activity before the end of 2009.”
Joshua Sherman
Stem Cells As Regeneration Treatment For Heart Attacks (CYTX)
Cytori Therapeutics, Inc. (NASDAQ: CYTX) is trading higher on the publication of the first pre-clinical study to demonstrate adipose-derived stem and regenerative cells showing significantly improved cardiac function after a heart attack.
As a reminder, there has been more than steady talk of mergers in the stem cell sector.
This pre-clinical data cardiac cell therapy study was reported online ahead of print in the International Journal of Cardiology. The APOLLO study is, according to Cytori, the first clinical trial to investigate uncultured adipose-derived stem and regenerative cells in heart attacks in human patients.
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Full 2009 ASCO Cancer & Oncology Primer (ABII, AEZS, ALTH, AMGN, APPA, ARQL, BMY, CLDX, CELG, CTIC, CGRB, LLY, EXEL, GHDX, GSK, IMGN, MEDX, MDVN, MITI, OGXI, OSIP, PPHM, PFE, ROSG, SNTA, TRBN, ZIOP, ZGEN)
We have already seen a massive round of abstracts ahead of the huge American Society of Clinical Oncology, or ASCO meeting for 2009, which is scheduled to start this weekend. ASCO is usually thought of as the Holy Grail of cancer conferences and these abstracts and presentations are viewed by investors, analysts, clinicians, doctors, and by cancer patients.
We compiled a brief synopsis for the following drug and biotech companies: Abraxis BioScience, Inc. (NASDAQ:ABII), AEterna Zentaris Inc. (NASDAQ: AEZS), Allos Therapeutics, Inc. (NASDAQ: ALTH), Amgen Inc. (NASDAQ: AMGN), A.P. Pharma, Inc. (Nasdaq: APPA), Arqule Inc. (NASDAQ: ARQL), Bristol-Myers Squibb (NYSE: BMY), Celldex Therapeutics (NASDAQ: CLDX), Celgene Corporation (NASDAQ: CELG), Cell Therapeutics (NASDAQ: CTIC), Cougar Biotechnology, Inc. (NASDAQ: CGRB), Eli Lilly and Company (NYSE: LLY), Exelixis (NASDAQ: EXEL), Genomic Health, Inc. (NASDAQ: GHDX), GlaxoSmithKline (NYSE: GSK) , Immunogen (NASDAQ: IMGN), Medarex (NASDAQ: MEDX), Medivation, Inc. (NASDAQ: MDVN), Micromet, Inc. (NASDAQ: MITI), OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI), OSI Pharmaceuticals (NASDAQ: OSIP), Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM), Pfizer Inc. (NYSE: PFE), Rosetta Genomics (NASDAQ:ROSG), Synta Pharmaceuticals (NASDAQ: SNTA), Trubion Pharmaceuticals, Inc. (Nasdaq: TRBN), ZIOPHARM Oncology (NASDAQ: ZIOP), and ZymoGenetics, Inc. (NASDAQ: ZGEN).
Be advised that some of the data may have been changed since the first abstracts came out, but this is an expansive list of companies with data.
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Persistent Merger & Acquisition Talk In Stem Cell Sector (GERN, ASTM, CYTX, NBS, STEM, KOOL, OSIR, LIFE)
It is not uncommon at all to have takeover rumors in the drug or biotech sector. That is also true in the speculative groups inside this. But we keep hearing the notorious “takeover chatter” in the stem cell sector, and particularly in Geron Corporation (NASDAQ: GERN). This is out there again, but be advised that we have seen the same notes getting passed around on multiple occasions with nothing that has ever come from it.
What we wanted to show you was where these stocks are now compared to the date of March 9, 2009 when the Obama administration was signing the executive order breaking the Bush ban on embryonic stem cell funding. Some of the other stem cell companies are as follows:
Aastrom Biosciences, Inc. (NASDAQ: ASTM) is at $0.40, and was at $0.62 when we covered it on March 9; market cap today is $69 million.
Cytori Therapeutics, Inc. (NASDAQ: CYTX) is at $2.83 and was at $3.20 when we covered it on March 9; market cap today is $97 million.
Neostem, Inc. (NBS) is at $2.16 and was at $0.69 when we covered it on March 9; market cap today is almost $17 million.
StemCells Inc. (NASDAQ: STEM) is at $1.75 and was at $2.15 when we covered it on March 9; market cap today is $182 million.
Thermogenesis Corp. (NASDAQ: KOOL) is at $0.55 today, was at $0.57 when we covered it on March 9; market cap today is $31 million.
Osiris Therapeutics, Inc. (NASDAQ: OSIR) is in a stem cell pact with Genzyme, but for adult stem cells. This is a $12.19 stock, and shares were at $17.97 when we covered it on March 9; market cap today is $399 million.
There is also a much larger company called Life Technologies Corporation (NASDAQ: LIFE) and it has the Invitrogen unit that has many efforts, including a focus on creating unique primary and stem cell models for better and more efficient drug screening.
We would describe takeover chatter in this sector as something that feels like more fiction or a stretch rather than something we’d consider as any documentary evidence. The stem cell sector offers wonderful promises and wonderful cures for many diseases and conditions. But that is also after the ethical argument has been made. Despite the positive studies and the positive indications, the group overall is still in its infancy and there are now many international patent issues in the sector because this was largely off-limits for about seven years on the new development front from new lines of stem cells.
Vical Moving From Speculative H1N1/Swine Flu Stock To Real Vaccine Company (VICL)
Vical Incorporated (NASDAQ: VICL) has made an announcement updating what has happened in the two weeks since launching its program to develop a vaccine against H1N1 influenza, or swine flu. The company has completed the development of a prototype H1 vaccine, produced an initial supply of research-grade material, and initiated immunogenicity testing in animals.
Medtronic Troubles May Persist For Some Time (MDT)
Medtronic Inc. (NYSE: MDT) has been hit with a Mutiple-Whammy this week. Lower earnings and a round of layoffs was just the tip of the iceberg. The real issues at stake are a recall, a scandal over falsified study data, and safety notice given. This can all act as a negative catalyst for more than just a few days.
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Pfizer Heading Deeper Into Generics In Emerging Markets (PFE)
Pfizer Inc. (NYSE: PFE) is doing what would have in the past been considered taboo in the branded drug sector. The drug giant has gone into licensing agreements with two Indian pharmaceutical companies. The company aims to strengthen its emerging markets position and noted that off-patent drugs are one of the fastest growth segments globally.
Pfizer’s expanded agreements with Aurobindo Pharma Ltd. will grow its product portfolio within emerging markets to reflect the diverse and often unique market dynamics and commercial interests of more than 70 countries.
Pfizer has acquired rights to 55 solid oral dose products and 5 sterile injectable products for patients in more than 70 emerging market countries. Pfizer will commercialize the 60 products in phases tailoring its approach for different regions. This will include antibiotics and anti-infectives to cover a broad range of diseases. These were noted as cardiovascular and central nervous system disorders.
As usual, the real financial terms of the deal were not disclosed. With the number of drugs coming off patent in the coming years and with the cost of generics being the only unsubsidized mass appeal for drug companies, we would only expect this effort to grow across the pharma-sector.
JON C. OGG
MAY 20, 2009
Bill Gates, Small Biotech's New Biggest Investor (ALTH, AMAG, RDEA, ARYX, AUXL, BMRN, ETRM, INCY, ITMN, MAPP, OREX, VRUS, REGN, SGEN, VRTX, XNPT)
Late yesterday came the 13-F quarterly filing from the Bill & Melinda Gates Foundation Trust. Bill and Melinda have invested in drugs and research before, as well as dug companies, but there was a slew of biotech stocks in their quarterly holdings. Some of these are cancer winners, while others may seem random. Below we have broken these out by company and size of the position in dollars (M for million; K for thousand) as well as the number of shares.
ALLOS THERAPEUTICS INC. (NASDAQ: ALTH) $3.090M; 500,000 shares
AMAG PHARMACEUTICALS INC. (NASDAQ: AMAG) $1.839M; 50,000 shares
ARDEA BIOSCIENCES INC. (NASDAQ: RDEA) $2.165M; 210,386 shares
ARYX THERAPEUTICS INC. (NASDAQ: ARYX) $1.635M; 480,799 shares
AUXILIUM PHARMACEUTICALS INC. (NASDAQ: AUXL) $2.062M; 74,400 shares
BIOMARIN PHARMACEUTICAL INC. (NASDAQ: BMRN) $1.295M; 104,856 shares
ENTEROMEDICS INC. (NASDAQ: ETRM) $81K; 59,700 shares
INCYTE CORP. (NASDAQ: INCY) $1.02M; 435,700 shares
INTERMUNE INC. (NASDAQ: ITMN) $1.807M; 109,900 shares
MAP PHARMACEUTICALS INC. (NASDAQ: MAPP) $98K; 46,524 shares
OREXIGEN THERAPEUTICS INC. (NASDAQ: OREX) $36K; 13,900 shares
PHARMASSET INC. (NASDAQ: VRUS) $821K; 83,641 shares
REGENERON PHARMACEUTICALS (NASDAQ: REGN) $492K; 35,500 shares
SEATTLE GENETICS INC. (NASDAQ: SGEN) $34.718M; 3,521,088 shares
VERTEX PHARMACEUTICALS INC. (NASDAQ: VRTX) $2.729M; 95,000 shares
XENOPORT INC. (NASDAQ: XNPT) $2.517M; 130,000 shares
Time To Root For Chinese Drug & Biotech? (WX)
Much of the cheer and fanfare has been vacant at many drug and biotech firms for some time, despite the notion that there have been many mergers in the group. This particularly the case for some of the emerging companies or the ones located in lesser known areas for investors in this sector. That is where Wuxi PharmaTech, Inc. (NYSE: WX) comes into play.
We just saw earnings last night, and there have been two analyst upgrades this morning. This one has been battered an tattered over the last year, even if you take into consideration the notion that this one has recovered 100% from the market lows in early March.
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ASCO's Pre-Abstract Previews (ABII, ALTH, ARQL, CLDX, CTIC, CGRB, LLY, EXEL, GHDX, GSK, IMGN, MEDX, MDVN, OGXI, OSIP, PPHM, PFE, SNTA, ZIOP)
The first massive round of abstracts ahead of the huge American Society of Clinical Oncology, or ASCO meeting for 2009, is due out 6:00PM EST. This is thought of as the Holy Grail of cancer conferences and these abstracts are being picked apart all night by hundreds of investors, analysts, clinicians, doctors, and even by cancer patients. We have brief data here for the following biotech and drug companies, and you can bet there will be more than this: Abraxis BioScience, Inc. (NASDAQ:ABII), Allos Therapeutics, Inc. (NASDAQ: ALTH), Arqule Inc. (NASDAQ: ARQL), Celldex Therapeutics (NASDAQ: CLDX), Cell Therapeutics (NASDAQ: CTIC), Cougar Biotechnology, Inc. (NASDAQ: CGRB), Eli Lilly and Company (NYSE: LLY), Exelixis (NASDAQ: EXEL), Genomic Health, Inc. (NASDAQ: GHDX), GlaxoSmithKline (NYSE: GSK) , Immunogen (NASDAQ: IMGN), Medarex (NASDAQ: MEDX), Medivation, Inc. (NASDAQ: MDVN), OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI), OSI Pharmaceuticals (NASDAQ: OSIP), Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM), Pfizer Inc. (NYSE: PFE), Synta Pharmaceuticals (NASDAQ: SNTA), and ZIOPHARM Oncology (NASDAQ: ZIOP).
Be advised that there may be new data from many of these companies between now and the May 29 to June 2, 2009 meeting in Orlando, Florida. We have already compiled a pre-ASCO cheat sheet to get in ahead of some of these abstracts, and the brief notes are as follows:
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