Biotech Insight News Alert: Praecis, Imclone, Celgene, Cell Therapeutics, Enzon
Well, the rally was short lived for the biotech sector. Today was a beating and very depressing considering biotech stocks tanked much more than the rest of the market. Of course the good news is that the industry is sound, companies have money and many important drugs are in the pipeline. Another mitigating factor is that the H&Q conference is scheduled from January 8-12. This is one of the biggest biotech investor conferences of the year and frequently causes renewed interest in the biotech sector. This year's conference looks bigger than ever. So what to do now? Personally I think it is to late to be defensive-most of the damage is already done and many of the stocks are looking very attractive. One cautious approach to this market would be to invest in companies that have products likely to come out in the near future. Among these companies would be the following:
1-Praecis (PRCS), in phase 3 with an improved anti-hormone product for prostate cancer and possibly endometriosis. Their marketing partner is Amgen so we know the trials are well done.
2-Imclone (IMCL) with a monoclonal antibody expected to have a major impact in a large segment of cancers (in phase 3 trials for head and neck cancer but probably effective in a broad range of other epithelial type of cancers).
3-Celgene (CELG) with thalidomide, an oral agent-fairly nontoxic-when compared to standard chemotherapy, which will probably be approved for multiple myeloma, a common form of blood cancer and in trials for many other cancers. This stock has been beaten up badly in the last few weeks and I think now represents a good buy.
4-Cell Therapeutics' (CTIC) recently approved Arsenic Trioxide for the treatment of a rare form of leukemia. Again this product is in multiple other trials and I expect it to be effective across a range of tumors.
5-Enzon's (ENZN) Peginterferon will take the market for HCV (hepatitis c) treatment. It is both more effective and more tolerable than the standard interferon formulation. Interferon is a general immune modulator that has been the mainstay for treating Hepatitis C, a bad disease, which is four times more prevalent than HIV.
These are he names of just a few stocks that have been punished and may represent good values because of expected product approvals or expansion of product indications. Praecis has actually gone up recently on news of a possible Alzheimer drug that showed an effect in clearing plaques in preclinical trials.
Another approach to the market would be to buy companies a little further from the market that have been hurt even worse. A list might include Biomira (BIOM), Onyx (ONXX) Pharmaceutical, VaxGen (VXGN), Ligand (LGND) and others (see stock watch list on the website archive).
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