Q1 2009 Biotech Roundup: The Good, the Bad and the Ugly

Now that the first quarter of 2009 has ended, I took a look back at some of the news that moved the stocks in the sector, and as usual with the biotech sector, there definitely wasn't a lack of newsflow. I decided to breakdown the newsflow into three categories, the good, the bad, and the ugly. Oh and full disclosure, I'm a big fan of the Clint Eastwood movie with the same title.

The good: January 6, Indevus (IDEV) up 70 percent on news of a buyout by Endo, January 7, La Jolla (LJPC) up 80 percent on news of a partnership with Biomarin, January 13, Targanta (TARG) up 80 percent on news of a buyout by The Medicines and Zymogenetics (ZGEN) up 27 percent on the news of a partnership with Bristol Myers, February 3, Intermune (ITMN) up 37 percent on positive phase 3 data for Pirfenidone in IPF and OSI pharmaceuticals (OSIP) up 16 percent on positive Tarceva data, February 24, Acorda (ACOR) up 20 percent on buyout rumors, March 6, Genentech (DNA) up 11 percent on Roche raising their bid for the company and on March 12, CV Therapeutics (CVTX) up 31 percent on news of a buyout by Gilead Sciences (GILD).

The bad: January 9, Orexigen (OREX) down 16 percent on news of weak data for their obesity drug Contrave, February 19, Biomarin (BMRN) down 32 percent on weak earnings and guidance, March 27, Osiris (OSIR) down 21 percent on weak data for their crohn's disease drug Prochymal, March 30, Arena (ARNA) down 28 percent on news of weak data for their obesity drug lorcaserin, and March 31, Acorda (ACOR) down 20 percent on news that the FDA rejected their NDA for Fampridine-SR.

The ugly: February 9, Viropharma (VPHM) down 60 percent on news that their drug Maribavir for CMV fails in a phase 3 trial, February 12, LaJolla (LJPC) down 92 percent on news that their drug Riquent for lupus fails in a phase 3 trial, February 24, MAP Pharmaceuticals (MAPP) down 76 percent on news their drug Budesonide for asthma fails in a phase 3 trial, February 27, Synta (SNTA) down 80 percent Elesclomol for melanoma fails in a phase 3 trial, and on March 9, and Human Genome Sciences (HGSI) down 68 percent on news their drug Albuferon for HCV fails in a phase 3 trial.

Disclosure: long ITMN, long ARNA

Comments

[Seeking Acc...:]

HGSI's phase 3 trial for albuferon did not fail. In fact, the defined endpoint of non-inferiority was successfully met. The SVR was slightly unfavorable, when compared with the standard of care, but stating the trial as a "Failure" is not only inaccurate, it demonstrates a lack of quality in the reporting or a failure to understand the data reported.

Apr 02 09:45 AM

[jimmy Turano:]

WHY DID YOU LEAVE 'MRNA' OUT OF YOUR ARTCLE? AFTER ALL, IT IS A NEW COMPANY, NEW CEO, MADE TWO PARTNERING DEALS WITHIN 60 DAYS THIS YEAR. SOLD OFF LONG ISLAND HEADQUARTERS TO 'PAR'. GOT UPFRONT MILESTONE PAYMENT THIS YEAR TOO.
I MEAN SHOW A LITTLE RESPECT FOR A COMPANY THAT JUST WENT FROM $.27 CENTS TO $.75 CENTS WITHIN SEVERAL WEEKS. SO THEY MAY REVERSE SPLIT THE STOCK TO COMPLY WITH DE-LISTING. SO THEY MAY HAVE A NEWS RELEASE ABOUT 'GOING LETTER' OF CONCER. SO THEY HAVE HARDLY ANY EARNINGS & NO IMPROVED EARNINGS IN SIGHT. SO THEY HAVE A HUGE BURN RATE. SO THEY HAVE HIGH DEBT.
SO THEIR SALES GROWTH IS TERRIBLE.
THEY DO HAVE POTENTIAL!
EVEN IF IT MAY TAKE 4-7 YEARS.
IT IS A POSSIBILITY.
THIS COMPANY SHOULD FIT YOU STORY SOMEWHERE ABOUT THE 'GOOD', 'THE BAD', 'THE UGLY' SOMEHOW.
I MEAN THEY STILL EXIST AND SURVIVED SO FAR, WHY IS 'MRNA' NEVER COVERED BY SEEKING ALPHA?
FORGET THEIR BALANCE SHEETS AND STATISTICS, LOOK AT WHO MANAGEMENT KNOWS AND WHAT THEY ARE ACCOMPLISHING.
THEY HAVE MORE GOOD NEWS ANNOUNCEMENTS THAN THE WHITE HOUSE PRESS CORE. GIVE A LOOK!
CHECK THEIR BACKGROUNDS OUT.
CURRENT SHAREHOLDER WANT TO KNOW IF STOCK PRICE WILL CONTINUE INCREASE AND OR IS THIS A VIABLE LONG TERM PLAY AFTER ALL.

Apr 02 10:14 AM

[Mark Cifra:]

Most reasonable people would consider a 68 percent haircut in one day a failure.


On Apr 02 09:45 AM Seeking Accuracy wrote:

> HGSI's phase 3 trial for albuferon did not fail. In fact, the defined
> endpoint of non-inferiority was successfully met. The SVR was slightly
> unfavorable, when compared with the standard of care, but stating
> the trial as a "Failure" is not only inaccurate, it demonstrates
> a lack of quality in the reporting or a failure to understand the
> data reported.

Apr 02 10:37 AM

[Druglord:]

HGSI should be able to sell albuferon at a lower price per dosage than Pegasys because pegylation is an expensive process. Because it will be administered once every 2 weeks, vs. once a week for Pegasys, insurance companies should be able to cut expenses by half or more. Think!

Apr 11 02:55 PM

[Seeking Acc...:]

Last time I checked FDA did not cosider stock valuations in their BLA or PAI approval processes. Since your familiarity with regulatory processes is clearly lacking I'll provide you the acronyms, Biologics License Application and Preliminary Audit Inspection. These are the means by which a company and its drugs are assessed after successful Phase 3 clincial trials.
Using your metrics, HGSI must now be considered an ovewhelming success now that they're up ~356% from their low of 0.48. I suppose that'll be next quarters blog. Feel free to quote me as needed!


On Apr 02 10:37 AM Mark Cifra wrote:

> Most reasonable people would consider a 68 percent haircut in one
> day a failure.

May 01 12:56 PM