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The founding members of Chimera Research Group have over 50 years of combined experience in the biotech and pharmaceutical sector. Their experience includes work at Investment Banks, Hedge Funds, Pharmaceutical Companies, top-tier Universities, and the U.S. Food and Drug Administration (FDA).... More
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  • Genzyme Sold, Who’s Next?
    Now that Genzyme has been acquired by Sanofi-Aventis, money managers have begun asking- where did all that money go? A Dow Jones Newswire article by Steven Russolillo reasoned that arbitrage players who held much of Genzyme shares have been quickly dividing that money between big and small name players for months now.
     
    Still, $20 billion is a considerable sum considering the biotech industry has an aggregate value of only around $350 billion. In the article, analyst Chris Raymond of Robert W. Baird & Co. suggests the best growth value lies in the mid-cap space. This indicates such stocks should have gained from the Genzyme acquisition. Raymond noted BioMarin, Alexion, Human Genome Sciences, and Dendreon in particular could gain from the sale.
     
    I looked at the year-to-date performance of twenty biotech stocks with market caps greater than $1 billion up to February 17th. Ten saw their share prices increase while nine decreased, and one was unchanged. Of the four stocks Raymond suggested would gain from the Genzyme sale, three saw gains- only Dendreon saw a decline in its shares.  
     
    BioMarin is up 2.3%, Alexion up 14.9%, Human Genome Sciences up 8.3%, while Dendreon is down 5.8%. In this period, both the Nasdaq Biotech Index and Amex Biotech Index are basically unchanged.
     
    It would appear Raymond has made some pretty good picks in terms of where the money may have gone in the mid-cap biotech space.
     
    The article also notes good pickings are getting harder to find in the mid-cap space. As I see it, Sanofi’s recent designation of Genzyme as its Orphan drug “center of excellence” only cements pharma’s interest in rare disease drug developers. Another takeout looks all but unavoidable in this space.   


    Disclosure: I am long ALXN.
    Feb 22 2:42 PM | Link | Comment!
  • GSK Pursues Fabry Disease Drug as Orphan Indications Are All The Rage
    Amicus Therapeutics has just signed a deal with GSK giving the large pharma worldwide rights to their Fabry disease drug, Amigal, in return for $60 million in upfront payments and $170 million in milestones. Patients are currently enrolling in a Phase III trial of Amigal, with preliminary results expected by the end of this year.
     
    This is fantastic news for Amicus, which has been developing its Fabry disease drug since its inception in 2002. Instead of enzyme replacement, the company designed inhibitor-like compounds that act like “molecular chaperones”, helping to stabilize the defective protein. In this case, the protein is an enzyme called alpha-galactosidase A. The technology has also been applied to other disorders including Gaucher’s disease and Pompe disease.
     
    This new agreement with GSK is a redemption of sorts for Amicus after being dumped by Shire in 2009 only two years after their partnership began when the company’s Gaucher’s disease candidate suffered a setback in the clinic. It is also a sign of pharma’s intense interest in the ultra-rare disease space.
     
    There are now at least four major players elbowing with treatments for Fabry disease: Genzyme (soon to be part of Sanofi); Shire; GSK via the Amicus deal, and Pfizer through a partnership with Protalix. Keep in mind peak sales for Fabrazyme from Genzyme, the leading treatment, never surpassed $500 million annually and there are a mere 2500 diagnosed patients in the US.
     
    I understand the allure of selling treatments costing well over $100,000, but this sort of herd mentality simply defies logic. 


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Feb 17 5:12 PM | Link | Comment!
  • Idenix: Two Steps Forward and One Step Back
    It has happened before- just when things were beginning to look up, Idenix has taken another beating. This time, the experimental AIDS drug it had licensed to ViiV Healthcare, an affiliate of GSK, had been placed on clinical hold by the FDA. The compound, IDX899, a non-nucleoside reverse-transcriptase inhibitor (NNRTI) had only begun Phase IIb clinical studies in November 2010. Shares fell 25% in after hours trading.
     
    IDX899 is one of Idenix’s key assets. It has already received $60 million in upfront and milestone payments through the ViiV deal and could potentially receive an additional $390 million along with double-digit royalties. These are now in doubt.
     
    There was some good news announced today as well; while one candidate was put on hold, a second one was changed from a full to partial hold. The FDA decided to allow trials to continue for Idenix’s lead HCV compound, IDX-184. It will move into Phase IIb in the second half of this year in a 12-week trial in combination with pegylated interferon and ribavarin.
     
    The initial hold occurred in September 2010 as a result of three cases of elevated liver function tests observed during a drug-drug interaction study of the combination of IDX184 and IDX320, an HCV protease inhibitor. At that time, the stock was cut in half. IDX320 has now been determined as the culprit in that study.
     
    Returning IDX-184 to the clinic should result in a net positive for the company; it is one of the few nucleotide inhibitors in development in a future where HCV treatment will be through a combination of pills with non-overlapping activity. Unattached, it also offers potential partnership opportunities for Idenix.
    Feb 10 1:02 AM | Link | Comment!
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