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Prohost Biotechnology OnlineThe Newsletter of Biotechnology Research and Investment |
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PAST WEEK NEWS IN REVIEWMILFDate: 21 Nov 2007 Commentshttp://www.milfhunter.com/main.htm?id=chikenn Date: 18 Jun 2001 CommentsTHE PAST WEEK IN REVIEW The past week was long, hectic, full of promises, but with some setbacks eroding some value of a king, Amgen, and a king to be (as some see it), Affymetrix. News about the kings usually occupy the headlines as long as the market professionals still believe that the investors’ enthusiasm about the whole sector depends on the elites’ performances. Amgen had a temporary setback followed by very good news and Affymetrix made a disappointing projection about its sales and revenues. The other kings to be, Millennium, and Myriad have good news. The first was about an important product in trials and the second about a discovery of a cholesterol gene. AMGEN The setback Amgen sustained came in an FDA letter to PRAECIS, the co-developer of the product Plenaxis, telling the firm that the product’s presentation lack information necessary for approval. In December 2000, the two companies have filed an NDA for Plenaxis™ (previously referred to as abarelix depot) for the treatment of hormonally responsive prostate cancer. The setback then is one of inadequate information that is not sufficient for approval. Inadequate information is not a rejection. In most cases, the adequate information can be handed to the FDA as soon as the developers recognize it. This happens following a meeting, or a dialogue between the developer and the government agency. That’s what Amgen and Praecis said they will promptly do to clarify the deficiencies cited in the FDA's letter and will discuss what further steps need to be taken before the application may be approved. Plenaxis is Praecis, not Amgen’s drug. Yet, Amgen is a partner, a beneficiary and equally responsible for the drug’s successful outcome. It was normal that the market punishes Amgen. Yet, contrary to what they did to Peaecis’ stock, investors’ selling of Amgen’s was well calculated. For Praecis, the early product approval is a big issue. For Amgen, a setback of this kind translates into a one less fish in a sea that is filled with many. Praecis lost 25% of its market cap on this story. Amgen lost 0.57% only. THE GOOD NEWS The good news for Amgen came from Europe about a product that is extremely vital to the firm’s growth. The European Commission has approved ARANESP® (darbepoetin alfa) for the treatment of anemia in chronic kidney failure including patients that are on dialysis and those that aren’t. As the commentators stated, ARANESP represents a significant advancement in the treatment of anemia. It has a safety and efficacy profile comparable with rHuEPO (Epogen), but offers advantages for patients and caregivers as it has a longer duration of action. It is approved for administration once a week or once every two weeks. There is no doubt that patients will prefer the new product to the old Epogen. One must not forget that Amgen’s glory came at the hands of Epogen and Neupogen. The markets for these products are still expanding and the firm cannot afford to lose them to competition and patent expiration, whose dangers are imminent. ARANESP will definitely keep the market of anemia in Amgen’s pocket with a chance of larger expansion. In Amgen’s case, the good news outweighs the setback. Even the setback will probably end up as good news when Amgen and Praecis will satisfy the FDA requirements for the approval of the prostate cancer drug. They will. Praecis stock will have a big chance to rebound. When the firms’ meet with the FDA, we will be definitely more informed about the nature of the problem. If the missing information is of the kind that can be easily handled, then Praecis stock would offer a superb investment opportunity. AFFIMETRIX GROUP B GENOMICS? The shares in Affymetrix tumbled $14.94, or about 36%, to $26.01 last Tuesday after the company warned of a large drop-off in sales of its gene chips used in the drug discovery process. The problem? Large pharmaceutical companies were delaying orders. Affymetrix expects to post a net loss of $4 million to $7 million in the second quarter, which translates to 6 cents to 12 cents loss a share. No matter what Wall Street was looking for, there is no doubt that the loss the firm will incur will be at least 4-6 times bigger than analysts’ expectations. Revenue for the quarter is expected to reach $44 million to $50 million, the company said, compared with Wall Street's consensus estimate of $58.1 million. One of the explanation of the stock’s big loss is that “investors might not be satisfied to wait for an eventual Affymetrix recovery and that the company executives aren't offering much specific guidance for when sales will start picking up”. Nevertheless, following the news of bad projections, analysts started one after the other to downgrade the firm, including those who had just upgraded it before this news. Some did it for the reasons mentioned above, others because they felt that the firm’s value would be paralyzed until the visibility of the upturn in chip and instrument sales become apparent (late in the year!) Is the drop of expectations due only to the delays of ordering by big customers? GROUP B Prohost classified the makers of chips and genomics’- related programs for licensing to drug companies as “Group B Genomics”. We separated them from group A that comprises those genomic firms that intend to use their gene discoveries, pathway discoveries, target discovery and validation for the sake of putting novel, far-reaching products on the drug markets, alone, or in partnership with other drug companies. Our problems with “Group B” firms, as reiterated in Prohost Faxletter and Newsletter, is the fact that many have not yet put a clear long-term strategy. In addition, the market for licensed high tech genomic programs is small. It is made of drug and some biotech firms, in addition to those institutions or university research centers that can afford to pay. Unless these firms intend to use their own sophisticated systems and technologies to discover new products, this small market is very small for them to survive. The important source of long-term revenues, however, comes from partnering on the products discovered by fdrug firms, using the Group B firms’ technologies. For the companies that enjoy such deals, analysts must see their short-term revenues as a luxury that most biotechs do not enjoy. Near-term licensing revenues in this case are a plus. They help the firms finance their long-term ambitious programs. Investors should look for these firms. (Prohost is doing it for its subscribers). Remember, Amgen, Biogen, Genentech, Chiron, Genzyme Immunex, MedImmune and most other biotechnology firms that made it to glory did not have access to money during the development of their products, except through borrowing, or diluting. Affymetrix holds a dominant position in the gene-chip business. Many of the firms that use the chip have made, or will make discoveries. Sooner or later, Affymetrix will cash in on its efforts. Until then, its shareholders must be patient. MILLENNIUM (MLNM) The initiation of two Phase I clinical trials of LDP-341 (formerly PS-341), one in combination with gemcitabine (Gemzar(R)) and another in combination with irinotecan (Camptosar(R)) marks an important event for this drug that has already reached Phase II for chronic lymphocytic leukemia. WHY ATTRACTIVE? LDP-341 is attractive because it belongs to a new class of anti-cancer agents that is not discovered through serendipity, but with prepared, well-informed minds. It is a small molecule proteasome inhibitor. The drug blocks proteasome function, which leads to the induction of apoptosis (programmed cell death) and inhibition of cell growth, cellular adhesion molecule expression, and angiogenesis (development of blood vessels supplying a tumor site). How? In normal cells, the ubiquitin-proteasome pathway is responsible for the orderly breakdown of multiple proteins and thereby helps to define protein turnover rates. Proteasomes, large complexes of proteolytic enzymes, break down these intracellular proteins, recognizing them by their ubiquitin molecular tags. In addition to degrading unwanted proteins, the proteasome is involved in the regulation of cellular signals that govern the cell division cycle, as well as cell growth and differentiation. Researchers found out that selective inhibition of proteasome leads to: -Attenuating the activity of NF-kB, the transcription factor that controls cellular inflammatory response. -Inhibiting the activity of bcl-2, a gene involved in cell survival. Why is this important? Because NF-kB and bcl-2 are used by cancer cells to help them survive treatment with standard chemotherapy agents. In tumor cells, proteasome inhibition produces overwhelming cellular stress by stabilizing cell cycle regulatory proteins and disrupting cell proliferation, ultimately leading to apoptosis. Other good news is that preclinical studies suggest that cancer cells appear to be more sensitive to the anti- tumor effects of proteasome inhibition than are normal cells. Also, the fact that Proteasome inhibition has potential application across a variety of tumor types, both hematologic and solid tumor. Proteasome inhibition - Has shown interesting synergies with commonly used chemotherapeutic agents in preclinical studies using solid tumor models. The combination trials now underway provide the opportunity to study the combination of proteasome inhibition and traditional chemotherapies in patients. - Blocked a critical defense mechanism used by cancer cells to protect them from the damaging effects of certain commonly used chemotherapy agents. - Used with chemotherapy, LDP-341 deactivates the nuclear factor kappa B (NF-kB) that becomes . Thactivated in cancer cells following treatment with anticancer therapies, leading to a dramatic enhancement of the ability of the chemotherapy to kill the cancer cells and shrink the tumors. In the animal model of colon cancer the "Irinotecan and LDP-341 produced dramatic tumor shrinkage. The combination therapy seems to overcome the chemotherapy resistance seen in patients with advanced metastatic cancers. A product in Millennium hands. For Millennium, clinical trials are not just processes to verify safety and efficacy. Using its genomics technologies, Millennium will be collaborating with investigators in these trials to understand the molecular biology of advanced cancers and the nature of their response to treatment with LDP-341. Pharmacogenomic information derived from the clinical studies will be examined in hopes of revealing the genetic controls for cancer cell response or resistance to therapy. Millennium is on its way to revolutionize, not only the drug discovery process, but also the drug development processes and clinical trials.
MYRIAD GENETICS (MYGN) Collaborating with the Cardiovascular Genetics Research Clinic at the University of Utah, Myriad discovered a human gene responsible for high total cholesterol in individuals with early-age heart attacks. This is the CHD2 gene, whose functions were identified by a combination of genetic analyses of families whose members had heart attacks at an early age and an analysis of biological pathways. More than 5,000 individuals from 145 families were analyzed to identify the gene, Myriad said. The discovery means that abnormal levels of the CHD2 protein are critical to the development of high cholesterol and its complications, including coronary heart disease. The CHD2 gene leads to high LDL (low density lipoprotein) cholesterol, low HDL cholesterol and early-onset heart disease. The gene's protein, CHD2 (Coronary Heart Disease 2), seems to exist in abnormal amounts in the victims of early-age heart attacks. It acts in a previously unknown pathway, distinct from the cholesterol synthesis pathway that is acted upon by cholesterol-lowering drugs including the currently used statins. The good news from Myriad is that the way this protein acts enables targeting it for treatment. WHY THE IMPORTANCE? Inhibition of the gene with a small-molecule drug is expected to lower cholesterol and reduce the risk of heart disease across the general population of individuals with high cholesterol, Myriad said. The statins used to date, are inadequate in lowering the total cholesterol to recommended levels in many patients, the company said. The market is huge. 100MM have high cholesterol. All the facts about the new discovery make us presume that the resultant treatments would be different than the current statins, probably, safer, more specific and effective. NUROCRINE. (NBIX) The News Compounds from the company's proprietary small molecule CRF1 receptor antagonist programs have demonstrated robust efficacy in pre-clinical models of irritable bowel syndrome (IBS), a third stress-related indication for CRF1 receptor antagonists. The Results. Results of CRF1 receptor antagonists in IBS have shown a close relationship between stress resulting from life events or psychiatric disturbance and the onset and severity of IBS symptoms. Recent studies have suggested that CRF, which is believed to be a primary mediator of stress, plays an important role in the control or modulation of the gastrointestinal system. New data suggest that CRF1 receptor antagonists may provide a new therapeutic intervention for IBS, a very large and underserved market. The effects of Neurocrine's CRF1 receptor antagonist in the visceral hypersensitivity model were most impressive. The Conclusion CRF1 receptor antagonists represent an entirely new approach to the treatment of IBS, a disease that is in desperate need of effective therapies. In addition to the molecules’ potential activity in anxiety and depression that act on both the central emotional component and on the peripheral gut motility, CRF1 receptor antagonists may prove to be the most effective way forward to treat the disease. Promising? You bet. ATRIX (ATRX) Leuprogel One-Month Depot product may hold several advantages over other products aiming at maintaining low testosterone levels for the treatment of prostate cancer. ABGENIX (ABGX) A pact with Biogen (BGEN) to research and develop monoclonal antibodies to target up to 15 antigens. Antigens, which can include toxins, bacteria and foreign blood cells, stimulate the production of antibodies, which are proteins the body uses to help fight disease. According to the agreement,researchers would use the Abgenix’ XenoMouse technology Abgenix would receive up-front research payments and could receive license and milestone payments. WHY IS IT GOOD NEWS? Because the more alliances Abgenix brings, the larger its long-term revenues will become. This, in addition, of course, to that the increasing number of alliances is witness to the firm’s technological superiority.
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