Valuing Biotechs

Using HGSI ($23.85) as an example, Motley Fool’s uses an expected value method for calculating the biotech’s future price based on binary events such as the announcement of PDUFA results on March 10, 2011 for its lupus drug, Benlysta. Value Investing, Biotech Style Based on the chart below, expected value: $5 x 0.05 + $20 … Continue reading

The New Biotech Model

In the meantime, one biotech model gaining traction is the single asset, infrastructure-lite, development model, which deploys modest amounts of capital to develop a single compound to an early clinical data package which can be partnered with pharma. The asset resides within an LLC, and following the license transaction, the LLC is wound down and … Continue reading

BioJabber: Our pick from R&R

Cyclacel has several catalysts on the horizon With FDA approval of the SPA for Phase 3 trial for CYCC’s Sapacitabine in acute myeloid leukemia (AML), the company is better positioned to entice a big pharma to secure a partnership, especially with three other studies pending for MDS and NSCLC. Specifically, CYCC has yet to disclose … Continue reading

R&R Conference wrap-up

Rodman Rambles: Promising Biotechs

Biotech Stock Mailbag: Hep C Stocks to Watch

Investors should think about the evolving Hep C drug market like a buddy system. Everyone, meaning every company developing a new Hep C drug, needs a buddy, a partner, a wing man. Partnering is essential because in five or 10 years, maybe sooner, doctors will be treating Hep C patients with various combinations of drugs — i.e. drug cocktails — in many of the same ways that doctors treat HIV patients today.

The current standard of care for treating Hep C is a 48-week, two-drug regimen consisting of long-acting interferon (either Roche’s Pegasys or Merck’s(MRK) PEG-Intron) plus the generic medicine ribavirin.

If Vertex and/or Merck are successful in getting their respective direct-acting antiviral drugs approved next year, a third drug will be added to the Hep C treatment cocktail. If that add-on drug is Vertex’s telaprevir, for instance, newly-treated Hep C patients will take telaprevir plus interferon-ribavirin for 12 weeks, followed by another 12 weeks of interferon and ribavirin. Total treatment time, just 24 weeks or six months. Based on what we know today about telaprevir, cure rates of 75% will be achieved compared to about 40% today with standard of care alone.

Roche’s Experimental Medicine shows promise in resistant tumors

An experimental medicine being developed by Roche Holding AG’s Genentech unit may help a common chemotherapy drug kill cancer cells that are otherwise resistant to treatment, a study found.

A combination of the compound, GDC-0941, and the doxorubicin chemotherapy drug slowed the growth of breast and ovarian tumors in mice, according to the study in Science Translational Medicine.

Abbott’s Stint at a new Stent

Abbott’s stent, a scaffold-like device the size of the spring in a ballpoint pen, was inserted into one of Lamb’s coronary arteries in March 2006 and inflated under pressure to prop open the passage, which had been clogged by fatty plaque. Unlike metal stents, Abbott’s is made of polylactic acid and designed to dissolve within two years after implant. It left a healthy, unencumbered vessel, John Ormiston, Lamb’s doctor in Auckland, tells Bloomberg Businessweek in its Sept. 13 edition.

If studies confirm the device helps arteries and disappears without causing clots or other risks linked to metal models, the product may take the lead in the $4 billion-a-year market for drug-coated stents, as it would be safer for patients, said John Capek, Abbott Park, Illinois-based Abbott’s executive vice president of medical devices. Demand would fall for Abbott’s Xience stent and rivals from Johnson & Johnson, Boston Scientific Corp. and Medtronic Inc., he said.

“It may truly become the next revolution,” Capek said in a telephone interview. “The data are provocative enough at the moment to demonstrate that has a very real chance of happening.”

Lilly’s New R&D Strategy

Biotechnology was the biggest industry for venture funding in the first half of this year, with investors pouring $2.1 billion into 243 companies, according to the National Venture Capital Association, which tracks 17 categories. Industrial and energy was second at $1.94 billion.

Venture fundraising is showing signs of picking up again after dropping 56 percent in the second quarter from a year earlier. Institutional Venture Partners and Founders Fund, as well as smaller firms such as Floodgate Fund and Felicis Ventures, completed funds in the third quarter.

Lilly’s strategy is “another way in which companies can spread research and development dollars to more emerging opportunities without necessarily having to buy a company or make a direct investment,” Tony Butler, an analyst with Barclays Capital in New York, said yesterday in a telephone interview.

Still, it won’t fill the revenue gap the company faces in the next few years, he said. Any new drugs arising from the partnerships would come “way beyond 2015.”

BioJabber: A weekly wrap-up of the biotech industry’s latest happenings

Seattle biotech Trubion agrees to be sold; stock soar Seattle biotech Trubion Pharmaceuticals agreed to be acquired by Emergent BioSolutions for $96.8 million in cash and stock and a potential later payment of as much as $38.7 million. Rare Sharing of Data Leads to Progress on Alzheimer’s The key to the Alzheimer’s project was an … Continue reading

Chemistry goes green Behind the scenes, industrial biotechnology is getting going at last

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