Biotech Stock

Bright Future for Geron

A startup Biotech company is evaluated primarily by products in the pipeline. GERN’s current well publicized trial is dealing with using stem cells to treat patients with spinal cord injuries so they can regain mobility. Don’t get me wrong, if GERN is successful with their stem cell technology it will be a game changer for the company and medicine. Keeping that in mind, one has to remember all the other products in their pipeline. By reviewing their website and reading the SEC quarterly filings one could easily determine the other products that they are working on.

Buying shares of GERN will get you exposure to all of the products in the pipeline, not just the stem cell trials. With these other items comes the benefits and costs associated with the attempt to bring each to market.

Geron product chart

On top of what is in the pipeline, one has to consider where it is in the pipeline. Development of drugs and technologies can take years to come to fruition. This article will not attempt to explain all the inner workings of the FDA and its approval process, but once again the websites and SEC filings often times give a clue as to estimated completion dates. In the cash burn section below one will see how this becomes an important piece of information when deciding when to buy or sell a stock.

ImmunoGen Riding on Phase 2 Trial Results

ImmunoGen, Inc. (Nasdaq: IMGN), a biotechnology company focused on developing cancer drugs, saw its stock climb 22 percent on news that its potential therapy for breast cancer achieved positive phase 2 trial results. The results showed that that this new experimental therapy could potentially be more effective than a combination of Herceptin and chemotherapy, which is the current standard of care for many HER2-positive breast cancer patients.

The Waltham, Mass.-based biotech’s partner, Swiss drug maker Roche AG (Swiss: RO.SW ), said that T-DM1, a combination of a cancer cell-killing agent developed by Immunogen and Herceptin, developed by Cal.-based Genentech, now owned by Roche, showed a significant improvement in progression-free survival, over the combination of Herceptin plus chemotherapy.

“This top-line information about T-DM1’s performance in the first-line setting is very encouraging and adds to the favorable efficacy and safety data reported across a number of T-DM1 studies. We look forward to learning the detailed data when they are reported at a medical conference,” ImmunoGen CEO Daniel Junius said in a statement.

On Friday, IMGN closed at $12.12, where as last Friday it was trading at $9.00.

SOMX time to Buy or Sell?

Now Somaxon Pharmaceuticals, Inc’s Silenor is approved by the FDA and SOMX is planning to market the medicine. For that they issued 6million shares for a total of $49.5 million, making the total outstanding shares to 30million.  Currently SOMX is trading at $8.8 .

Now is it the right price for the share? If you are planning to sell SOMX, is it the right time to do that.

Take the case of HGSI.  On FDA approval HGSI shares moved from $3.00 to $12.00. Many were happy and sold the shares for a good profit.  That was 9 months back. Now HGSI is trading over $30.00.  Those who picked up the shares 9 months back is getting 150% profits with out much risk. Those who brought the shares before FDA approval were risking their hard earned money with out any guarantee for returns.  Those who invested after the FDA approval gained over 150% with out much risk.

Is the HGSI story going to repeat here for SOMX.   After the approval of Silenor, SOMEX jumped to $9.00 and it is still dancing around the same level.

Advantages of Silenor:

• No Abuse Potential: Unlike most of the existing insomnia drugs including Ambien and Ambien CR from SNY and Lunesta from SEPR, which are classified as Schedule IV drugs by the DEA due to the abuse potential and tolerance problems associated with them, Silenor appears to be safe, without any abuse potential and is likely to be categorized as a non-scheduled drug by the DEA.
• Sleep Onset and Sleep Maintenance Activity: Rozerem from TKPHF, an approved insomnia drug, has been classified as a non-scheduled drug. However, this drug is only approved for patients, who have difficulty in getting sleep and not for the maintenance of sleep. On the other hand, Silenor is expected to be classified as a non-scheduled insomnia drug for the maintenance of sleep.

It is said that this drug has approximately Approximately $2 billion market in the US. These are enough reasons to make your buy or sell decision. It is strange that, you were holding it when there was high risk involved, but want to sell these now.

Biotech Stocks Waiting FDA Approval

One sure way to gain in stock market is to bet on Biotech Stocks waiting on FDA Approval. Selling out just before FDA approval is a sure way of generating good profit.  Most of them sell out a portion just before the FDA decision. In case the decision goes against, still they are not in profit.  This is a strategy for Biotech investments for those who wants to play by safe.  For those who can afford to take the beating, just go full swing for the FDA Approval or rejection decision.  

Here is the list of stocks waiting FDA Approval in first half of 2010.

Isis Pharmaceuticals Mipomersen Affected by Side-Effect

The new cholesterol drug mipomersen of Isis Pharmaceuticals (Nasdaq: ISIS) and Genzyme’s (Nasdaq: GENZ) faces pressure as a consequence of side effect.  The drug potential will be severly reduced by this factor as the percentile of population willing to take this drug will be limitted.

Rumors about negative-safety results have pressured the stock this morning and this may be a a good opportunity for long-term investors to increase positions. Isis shares tumbled almost 15% on Thursday, following the released of mixed Phase III clinical data for its new cholesterol drug mipomersen. By our calculations, the efficacy results are significantly superior to the best available option for cholesterol treatment despite the sideeffects. 

Let’s start with the good news about the drug’s great efficacy data. Mipomersen is used in patients who have a genetic disorder that results in high cholesterol levels even while taking cholesterol-lowering drugs — like Pfizer’s (NYSE: PFE) Lipitor, AstraZeneca’s (NYSE: AZN) Crestor, Merck’s (NYSE: MRK) Zetia, and Abbott Labs’ (NYSE: ABT) Niaspan — mipomersen was able to reduce cholesterol by 28%. Patients taking placebo saw their cholesterol levels go up 5%.

The bad news is that increased liver enzymes continue to plague mipomersen — 14% of patients taking mipomersen saw liver enzyme levels at least three-times the normal level. Elevated liver enzymes are a sign of liver toxicity and a reason that many drugs die in clinical trials. Most of the patients only had one measurement that was high and there weren’t other signs of liver damage, which puts the companies in an awkward position. The side effects may not be severe enough to keep mipomersen from getting approved, but only the most severe patients may be willing to roll the dice given the side effect signal.

We should know a little more when the full data set is presented at a medical meeting. Here are the two most important things to look out for:

• The number of patients that rolled over to the open label study. After completion of the 26-week trial, both patients that got mipomersen and those on placebo are given the option of taking mipomersen, so the company can get long-term safety data from the patients. For investors, a high rollover rate indicates that doctors and patients think the benefits outweigh the risk.
• The results of MRIs looking at fat build up in the liver. Management said that there was an initial build up of fat, but they’re hoping images from later in the study show that the fat decreases over time like it does with other cholesterol drugs.

After the first trial, I said that investors might be overreacting.  The data to date is likely good enough to get past the FDA, but if mipomersen can only be used on the most severe patients, sales will be limited.