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I have a Bachelors Degree in Business Administration and have started up a website with the top 25 biotech stocks. I have been investing in biotech stocks for the last five years, and have done very well. My investing centers around being in long term in biotech stocks, because of the long term... More
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  • Rxi Pharmaceuticals Receives "Speical" Provision For RXI-109

    Rxi Pharmaceuticals (OTC:RXII) announced on November 18th that it had signed a partnership with A European "Specials"(distribution of unlicensed medicinal products) biotech company known as Ethicor Ltd. In this agreement Rxi Pharmaceuticals gave rights to Ethicor to start distributing RXI-109 (anti scarring drug in development) to patients in Europe, and the possibility to extend the drug to other territories besides United States, Canada, and Mexico.

    Patients Will Start to Receive RXI-109

    Rxi Pharmaceuticals' drug RXI-109 is an RNAi drug being developed to treat scars in patients (unmet medical need). The company has been able to pass previous problems with RNAi, like delivery problems. Rxi has found a way to create its oligonucleotide as a "self delivery" drug, that combines both conventional antisense technologies together with RNAi antisense. This combination is known as the sd-rxRNA platform, which can be used to develop a whole pipeline of drugs. Matter of fact the company has also already started to branch out its ophthalmology platform targeting macular degeneration, PVR, Retinoblastoma (eye cancer in children).

    According to the European medicines legislation (Directive 2001/83/EC, Article 5(1)), Eithicor will be able to supply RXI-109 to healthcare professionals in Europe before any type of regulatory approval. This is known as a "Special" designation that Europe allows to help treat patients with an unmet medical need, who have no other treatment options. The good part about this deal is that upon regulatory approval Rxi Pharmaceuticals will receive back all rights to market RXI-109. It seems RXi chose Ethicor, because they already deal with a lot of "Special" drugs in Europe for many pharmaceutical companies. As an example Ethicor had also recently signed a deal with Ligand Pharmaceuticals (NASDAQ:LGND) to distribute Lasofoxifene to treat patients with osteoporosis.

    Phase 2 RXI-109 and Beyond

    Recently Rxi Pharmaceuticals had announced that it began a phase 2 trial for RXI-109 in patients with hypertrophic scars in the lower abdomen. That marks one of the three trials that are set to begin. The other two trials in keloids, and breast scar revision surgery patients are set to start either by the end of 2013, or dip into 1st quarter of 2014. Also on deck the company is set to report phase 1b multi dose data that it has, for an updated two additional cohorts. In this updated study Rxi had decided to test higher doses for RXI-109, and spread out the doses to an extended period of time. Those results are set to be released soon in the 4th quarter of 2013.

    The reasoning for getting this drug out there is that the phase 1 trial went good as there were a lot of patients that benefited from the reduction of scars. Matter in fact RXI-109 achieved a 43% gene knockdown of CTGF (connective Tissue Growth Factor) which reduced scarring significantly. Now don't be confused by this low gene knockdown with the likes of Alnylam (NASDAQ:ALNY). Alnylam had gotten a 93% gene knockdown for TTR-mediated Amyloidosis which is good. Although Rxi doesn't want that because it could actually have a negative effect on wound healing, causing the scar to not heal at all. So they are two completely different diseases, and can't be compared as the same.

    Revenue for RXI-109

    Despite not being approved yet by any regulators Rxi Pharmaceuticals, and Ethicor will receive revenue from RXI-109 as a "Special" drug in Europe and other possible territories. This was a good deal for Rxi, because it currently has enough cash until Q2 2015. So if all goes well with RXI-109 in the Europe region, then Rxi should see some potential revenue come in for its lead drug candidate. This revenue should give it an influx of cash to develop other products in the pipeline without the need for dilution. The other good part in doing this partnership is they can test out RXI-109 (which has proven to be safe in patients) in many more patients than a small sample size. This will allow Rxi to see how well a big population reacts to the efficacy of the drug.

    Risks

    One of the risks is that revenue won't be known for quite some time. Also under the European Medicines legislation the drug can't be directly marketed to health care professionals. So how well Rxi-109 does in terms of revenue remains to be seen, because of this handicap. Also it is being distributed to a larger population with different types of scars, so its efficacy may not be that substantially good.

    Conclusion

    Rxi Pharmaceuticals is very undervalued at the moment sitting with a market cap of only $39 million. The fact that it has the ability to generate $5 billion dollars upon approval or RXI-109, means there could be potentially huge upside in the near future. As more patients are treated with RXI-109 in Europe, and other territories then Rxi Pharmaceuticals will gain more exposure for their RNAi sd-rxRNA "self delivery" platform. Also more results in the clinic could also create huge upside in the stock price. This could lead to potential partners in other parts of the pipeline like ophthalmology. If all goes well in the clinical trials along with patients in Europe, then RXI-109 has huge potential to become a blockbuster drug.

    Disclosure: I am long OTC:RXII.

    Additional disclosure: I have no position on the other stocks mentioned

    Nov 20 11:39 AM | Link | 1 Comment
  • Dendreon Slashes Jobs To Keep Itself Afloat

    What: Dendreon (NASDAQ: DNDN) announced today that it has taken efforts to cut 15% of its workforce, because of weak Provenge Sales. The company had Provenge approved by the FDA back in 2010, and has seen declining revenue since. Provenge is an FDA approved drug to treat Men with advanced prostate cancer, using Immunotherapy. In essence the body uses the patients' own immune system to fight the cancer in the body.

    So What: In the press release Dendreon stated that it will be slashing jobs, since it needs to downsize its workforce to keep profitability. With the slashing of the workforce, the company will take a big severance charge for $7.5 million in this quarter -- following quarter. The company believes that slashing these jobs will help the company to reduce operating expenses by $125 million. Dendreon has enacted these reductions, because sales for Provenge did not meet up to the company's expectations. Provenge was expected to make $75 million in sales according to the estimate from analysts, yet only was able achieve $68 million in sales. This 3rd quarter revenue report has left management scrambling, to find a way to reduce costs immediately.

    Now What: With this cost reduction move, the company doesn't expect any benefits to be realized until 1st quarter of 2014. The continued decline in revenue for Provenge along with constant cost-cutting will continue to put a lot of downward pressure on the stock. According to the 8-k Dendreon expects to work on these efforts over the next 6 months, but there are no guarantees in the timeline of cost-cutting. This is because certain labor laws, and regulations may force the company to delay some of the efforts to reduce costs. These delays in essence, could reduce Dendreon's cash position significantly. If you are currently in Dendreon I would say to wait, and see if the company seeks a strategic option to sell itself to another pharmaceutical company. If you are an investor on the sideline, I would say it is best to seek other opportunities in the biotech sector.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: DNDN, Long Ideas
    Nov 12 2:36 PM | Link | Comment!
  • Why Sarepta Therapeutics Shares Dipped Lower

    What: Shares of Sarepta Therapeutics (NASDAQ: SRPT) dipped as much as 50% on the news that the FDA won't accept the company's drug eteplirsen, for the NDA that was filed. The company is in development of a drug known as eteplirsen to treat boys for a rare disease known as duchenne muscular dystrophy (NYSE:DMD). The FDA claimed that "the NDA filing was premature" , and that "dystrophin" may not be a good biomarker for DMD patients.

    So What: According to Sarepta Therapeutics' press release the FDA will need more clinical data to confirm that dystrophin should be used as a biomarker to determine efficacy for DMD. It seems the FDA doubts the Exon skipping RNA technology, in light of recent failures with this type of technology. One such recent failure occurred when, Prosensa Holdings N.V. (NASDAQ: RNA) and Glaxosmithkline (NYSE: GSK) , declared that their drug drisapersen had failed its phase 3 study in patients with duchenne muscular dystrophy. The trial failed, because drisapersen failed to meet its primary endpoint -- There was no significant improvement on the 6 Minute Walking Distance Test (6MWD) test compared to placebo. Also FDA got a hold of Natural History Data for DMD, which also may have swayed their decision in the opposite direction.

    Now What: Well now it seems that Sarepta will have to run a confirmatory phase 3 trial, and achieve a positive primary endpoint -- before it can file another NDA to the FDA. Another phase 3 trial could take 2 years or more, and during that time the company will have to dilute shareholders more just to stay afloat. It will take a long time to enroll all the patients in a phase 3 study, and trial data will be sparse along the way. This dip though presents a buying opportunity for long term Sarepta investors, because the fundamental story hasn't changed. The only thing that has changed is the amount of time needed to seek approval for eteplirsen, once the confirmatory phase 3 trial has been completed. The downside risk though is that the FDA may change stances in the coming years, on what the primary endpoint should be to determine efficacy in the DMD patient population.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SRPT, GSK, RNA, Long Ideas
    Nov 12 2:33 PM | Link | Comment!
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