Miljenko,
It is interesting to me that all of this analysts (at Inf.Inv. forums) are looking and recommending genomic-mAb platforms bios.
None of them are looking or recommending small molecules discovery platforms bios.
Well Naqvi's number one pick, MLNM, isn't exclusively mAb based at all. I find it hard to get a good sense of just what their balance is between mAB's and small molecules, but they certainly talk about both.
As you point out, the small molecule business is high risk, high reward. You just have to look at a company like SNAP which has had well characterized targets and assistance from big pharma and still is nowhere near a product after many years. For all the talk of rational drug design it seems it is still remarkably hard to produce an approvable small molecule. Of course it's hard for big pharma too, but at least they can mostly bury their early failures in their own basements, rather than at a very public funerals.
So from my investment perspective it generally makes sense to buy only a big basket of stocks of non-big-pharma companies engaged primarily in small molecule work - so no big bets on any one company. We've now seen that drugs like Reopro, Rituxan and Herceptin can make a good living for biotech companies. Sure these aren't billion dollar drugs, but they certainly are multiple-hundred-million dollar drugs.
It would be very interesting to compare the current failure rates of Mab candidates with small drug candidates as they both advance, as well as their respective timing and costs of discovery. Of course such a direct comparison is very hard, partly because they are often addressing very different medical needs.
The Herceptin mini-scare of a week or two ago shows that Mabs aren't immune from the current increased focus on toxicity. Once we start seeing more Mabs for less-critical conditions, the tox hurdles get higher as well.
My instinct right now is that the Mabs are the place to be to capture the shorter-term pay-offs from the genome rush. If you want to go with platform rather than product, then ABGX, MEDX, PDLI, etc. as well as (maybe) GZTC. On the Mab product side I like ALXN, with their complement inhibitor, at these prices.
Peter |
