The 51^st American Society of Hematology [ASH] Annual Meeting will take place December 5-8, 2009, at the Ernest N. Morial Convention Center in New Orleans, LA. This is the premier event for the hematology industry, attracting more than 20,000 hematologists and other health-care professionals.

In this regard, Celgene Corporation (CELG) recently announced that data from more than 200 clinical trials involving the company’s products will be presented at the ASH annual meeting. After reaching a 52-week low of $36.90 in April 2009, shares of Celgene have rebounded nearly 50% to close at $54.97. As a result, investors may gravitate to other biotechnology companies specializing in the area of hematology to uncover similar investment opportunities.

In our August 2009 article titled “Treating Parkinson’s Disease: Investment Opportunities and Challenges,” we reviewed some of the historical challenges associated with developing treatments for Parkinson’s disease [PD] and cited reasons for optimism going forward in addition to highlighting several promising companies making progress. Since that time, many of the companies we featured have reported clinical progress, presented promising new data, and produced significant returns for investors – with several stocks reaching 52-week highs. In view of renewed investor enthusiasm for companies working in the area of PD, the purpose of this article is to provide an update on previously mentioned companies and introduce some new players that are making headlines in the PD space.

Improvements on Existing Therapies

By Michael D. Becker, Janet L. Dally, and Jeffrey Martini, Ph.D.

The life sciences industry [herein includes pharmaceutical, biotechnology, diagnostic and medical device companies] plays a critical role in the U.S. economy. Innovative new medicines developed by life sciences companies provide better patient outcomes, improved quality of care, increased life expectancy, and lead to economic gains.

Co-authored by Michael D. Becker, Jeffrey Martini, Ph.D., and Janet L. Dally

In the United States, up to 50 million people live with chronic pain, with the majority of these patients not satisfied with their current pain treatments. Pain is defined clinically as an unpleasant emotional experience resulting from real or potential tissue damage and is generally divided into two categories based on cause:

Despite recent progress and the availability of novel therapies, radiation is still an effective tool in the war against cancer – as it has been for more than a century. The original and still predominant mode of administration is via external methods wherein a radiation source is directed at the intended target or region. Unfortunately, this “outside in” approach has the drawback of causing collateral damage to healthy organs and tissues that lie on either the path between the source and the target or beyond the intended target on the “exit” pathway.

In the 1990s, the U.S. Food and Drug Administration [FDA] cleared for marketing the first intravenously delivered, particle emitting radionuclides for the treatment of pain arising from the spread of cancer to bone. Termed Systemic Targeted Radionuclide Therapy (STaRT), this new approach offered the promise of selectively irradiating disease sites while sparing normal tissue. Metastron® [strontium-89 chloride injection] was introduced in 1993 and Quadramet® [samarium-153 EDTMP] was later introduced in 1997.

Although a controversial topic, activist hedge funds and private equity firms typically use a small equity stake in an underperforming company to put public pressure on its management and board of directors with the goal of increasing stakeholder value through cost cutting, changes in corporate strategy or management, capital restructuring, asset divestiture and other tactics. Biotechnology investors with recent activist roles include Biotechnology Value Fund, Third Point LLC, Eastbourne Capital Management, and DellaCamera Capital Management among others.

Perhaps the most prominent shareholder activist in biotechnology is billionaire investor Carl Icahn, largely through his Icahn Management LP investment fund. He has created value for some biotechnology stakeholders, including a very quick return with MedImmune, Inc. and a longer-term payoff with ImClone Systems, Inc.

By Michael D. Becker, Jeffrey Martini, Ph.D., and Janet L. Dally

Parkinson’s disease [PD] is the most common of the neurogenerative diseases affecting 1 in 100 people over the age of 60. Approximately 1.5 million Americans currently suffer from the disease and it is estimated that 60,000 Americans are newly diagnosed each year. PD is both a chronic and progressive disease.

Proteins are essential components of the human body. They perform specific biological functions within a cell and each type of protein has a unique function. For example, enzymes are proteins that help biochemical reactions to occur within the body. But before they can carry out these important functions, proteins must assemble into precise three-dimensional shapes through a process called protein folding. This process is critical and fundamental to virtually all of biology, but in many ways remains a mystery.

Genetic mutations may alter the instructions for making proteins. Some mutations are very severe and prevent the production of a specific protein, while other mutations can lead to the production of faulty proteins in cells that do not achieve their correct three-dimensional shape and are generally referred to as “misfolded” proteins. Many well known diseases, including neurodegenerative diseases such as Parkinson’s, Alzheimers, and Huntington’s, in addition to many cancers, arise when misfolded proteins are unable to perform their intended biological function or when they are not recognized as defective and eliminated by the cell’s own internal processes.

According to the American Cancer Society [ACS], non-Hodgkin lymphoma [also known as non-Hodgkin’s lymphoma, NHL, or sometimes just lymphoma] is a cancer that starts in cells of the lymph system, which is part of the body’s immune system. NHL is the fifth most common cancer in both men and women in the United States [not counting skin cancers]. In 2009, the ACS estimates that there will be nearly 66,000 new cases of NHL in the United States and that about 20,000 people will die from the disease. In general, the overall 5-year relative survival rate for people with NHL is 65%, and 10-year relative survival is 54%.

By 2003, the U.S. Food and Drug Administration [FDA] had approved two radioactive labeled monoclonal antibodies for the treatment of patients with “relapsed” or “refractory”, low-grade or follicular B-cell NHL. Refractory NHL is disease that never responded or has stopped responding to standard therapies. Relapsed NHL is disease that has returned after successful initial treatment.

According to their website, Discovery’s Edge is the Mayo Clinic’s online research magazine that is designed to communicate the story of scientists and researchers who are bringing treatments and improved care to patients and also reports on “works–in–progress.” Through this publication, Mayo investigators studying immunotherapy for aggressive prostate cancer reported over the past weekend that a combination therapy dramatically reduced tumor size to make surgery possible for two patients whose prostate cancer had been previously considered inoperable. While preliminary, Mayo reported that the results were significant enough for future research.

As noted in our recent articles, investors have been “irrationally exuberant” towards biotechnology companies working in the field of prostate cancer – even those in the early stages of development. In keeping with this theme, the Mayo news drove shares of Medarex, Inc. (MEDX) up more than 20% on Monday morning with significant volume, as the immunotherapy referenced in the investigator-sponsored study involved the company’s Ipilimumab product candidate. Ipilimumab is a fully human antibody that binds to CTLA-4, a molecule on T-cells that plays a critical role in regulating natural immune responses.

By Jeffrey Martini, PhD., Vice President of MD Becker Partners LLC

Approximately 250 million people worldwide have been diagnosed with diabetes mellitus and that number is growing with the increasing obesity population. Broadly, patients with diabetes are characterized by elevated blood glucose levels that result from either insufficient insulin secretion (type-1 diabetes) or ineffective insulin action (type-2 diabetes). The market for treating patients with diabetes is large and complex and is valued at over $90 billion (Ref 1).

Prostate cancer is the most common type of cancer found in American men, other than skin cancer. In 2009, the American Cancer Society estimates that there will be nearly 200,000 new cases of prostate cancer in the United States and that about 27,000 men will die from the disease. It is estimated that there are more than 2 million American men currently living with prostate cancer.

As noted in our June 1, 2009 article, investors appear to be gravitating towards biotechnology companies working in the field of prostate cancer. Consider the following:

In my prior article, I highlighted the “ASCO-effect," which relates to the fact that biotechnology companies working in the field of cancer can experience double or triple-digit stock price increases from the end of April through the American Society of Clinical Oncology (ASCO) annual meeting. Beyond the names previously mentioned, investors also appear to be quite interested in oncology companies developing therapies that inhibit key targets along the PI3K-AKT-mTOR signaling pathway.

Investor enthusiasm may be warranted, as this pathway is mutated or amplified more frequently than any other pathway in cancer. Activation of the PI3K-AKT-mTOR pathway is associated with cell survival, malignant transformation, tumor invasiveness, and resistance to chemotherapy, radiation therapy and other agents.

Investors are hoping that the spark that could reignite investor enthusiasm for biotech stocks is taking place right now. Approximately 30,000 participants are gathering from May 29-June 2, 2009, in Orlando, Florida, for the year’s largest cancer conference. Attendees of the 45th Annual Meeting of the American Society of Clinical Oncology (ASCO) will exchange ideas and hear about the latest breakthroughs in cancer therapeutics and diagnostics from over 4,000 scientific abstract presentations during the four day event.

It is no wonder that ASCO is closely watched by biotechnology industry observers. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), there are 633 medicines and vaccines developed through biotechnology in human clinical trials – the majority of them (254) for the treatment of cancer. Even more impressive, all of these products are either in human clinical trials or under review by the Food and Drug Administration (FDA).

Following a spate of high profile clinical setbacks and regulatory delays that sent the sector into a tailspin during the final week of February 2009 (see prior column), investors shrugged off further disappointing clinical news as merger and acquisition activity helped biotechnology stocks stage a partial recovery last week. The NASDAQ Biotech Index (NBI) gained nearly 9 percent during the period, slightly lagging the broader market’s advance as evidenced by the 10.7 percent increase in the S&P 500 Index.

Last week, Genentech (DNA) and Biogen Idec (BIIB) reported that a Phase 3 study of Rituxan® failed to meet the primary endpoint as a treatment for patients with a form of lupus. This was the second setback for patients with lupus in less than a month, as La Jolla Pharmaceutical (LJPC) recently announced that the Independent Data Monitoring Board for its Riquent® Phase 3 study in lupus completed the first interim efficacy analysis and determined that continuing the study is futile.

At the start of the year I provided a positive outlook for the biotechnology industry in 2009, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions.

With January officially on the books, it appears an appropriate time to revisit this bullish biotechnology thesis. After all, there’s a saying on Wall Street: As January goes, so goes the rest of the year.

After a brief bout of euphoria during the early portion of the decade, the biotechnology industry, as measured by the Amex Biotech Index (BTK), was shunned by investors for the better part of the 1990s.

The BTK, which was established with a benchmark value of 200 on October 18, 1991, declined by 50% to nearly 100 seven years later (around mid-1998) despite improving industry fundamentals, including record levels of late-stage clinical trials, new product approvals, profitable biotechnology companies, and industry merger and acquisition activity. With this in mind, and being somewhat of a contrarian, it was July 1998 that I first started publishing an investment newsletter focusing on biotechnology.