EntreMed (ENMD) Added to The Drug and Biotech Portfolio
We are adding EntreMed, Inc. (ENMD, $33) to The Bull Market Drug and
Biotech Portfolio. EntreMed works in the field of cancer treatment, and
has a leading position in the area of developing drugs to block
"angiogenesis," a process required for tumor growth.
Solid tumors require a steady blood supply for growth. Antiangiogenesis
drugs target signaling processes that drive the creation of vasculature to
feed tumors. When a tumor's blood supply is restricted, the tumor
regresses, and at least in some cases, disappears.
Nearly two years ago an electrifying front page article in the Sunday New
York Times described the early development and promise of EntreMed's
compounds Endostatin and Angiostatin. This thrust the company in the
spotlight and made antiangiogenesis a buzzword among researchers and
investors looking for a "magic bullet" in the fight against cancer. After
a brief trip to the stratosphere the stock retreated as it was realized
that clinical trials were still over a year away and other researchers had
great difficulty in manufacturing these complex proteins. The nadir came
last February when Bristol-Myers Squibb (BMY) pulled out of a
collaboration to develop Angiostatin.
But since then the news has been positive. Other researchers succeeded in
duplicating the company's results. The company contracted with Chiron
(CHIR) for a bulk supply of its lead product Endostatin for use in
clinical trials, which began in late September. Thalomid, a compound
licensed to Celgene Corp. (CELG), had encouraging results in Phase II
studies across multiple cancer indications and is beginning to generate a
royalty stream for EntreMed. Company researchers disclosed the discovery
of other angiogenesis inhibitors and progress with products in preclinical
development. In December, EntreMed announced that it was exercising its
option to repurchase shares that had been held by Bristol-Myers, bringing
a fresh burst of confidence to the stock.
The year 2000 should bring growing cash flow from Thalomid sales and a
steady news stream on several Thalomid cancer trials. EntreMed's 100
patient Phase I Endostatin trial should be complete by next fall, and
anticipation of the results will be high. We also expect news of further
developments emerging from ENMD's impressive research efforts.
There are many other companies developing drugs to block angiogenesis,
among them Boston Life Sciences (BLSI), Genentech (DNA), Oxigene (OXGN),
and Warner Lambert (WLA). At some point in the future we will be
examining these companies and others working in this field, in detail. It
may be early to pick a "winner" in this space, but there are good reasons
to believe that EntreMed will at least find a niche. First of all, we
expect that with so many different types of cancer to treat, there will be
a need for several antiangiogenic compounds. Unlike some of the other
candidates in this field, Angiostatin and Endostatin are natural human
proteins, and so far seem non-toxic. Also EntreMed has a strong
intellectual property position in the field, with over 250 patents issued
and pending. |
