=DJ US Biotechs Are Successful In 4Q But Their Shares Are Not
07 Jan 13:11
By John Seward
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--It was a successful fourth quarter for companies in the
biotechnology sector - except in the stock market.
The often-choppy Amex Biotech Index is up less than 2% from the Sept. 30 end
of the calendar third quarter. While it closed out the year up 11%, biotech
companies' stocks "finished about where we were" in September, said Susquehanna
analyst Soham Pandya.
Companies were successful winning drug approvals from the U.S. Food and Drug
Administration, a feat they will be hard-pressed to repeat in the first
quarter, Pandya said.
One particular piece of good news, according to Harris Nesbitt analyst Thomas
Shrader, was the FDA's December approval of Genzyme Corp.'s (GENZ) Clolar drug
for childhood leukemia.
The action, based on a trial involving only 49 patients, suggests the FDA is
"willing to look beyond conventional endpoints" in drug applications aimed at
small populations of often desperate patients, Shrader said in a research note.
But with the industry pipeline of FDA approvals now running at a slower rate,
2005 opens with the prospect for potentially negative news in the form of
changes to the federal reimbursement system for Medicare and Medicaid patients.
Pandya said investors are well aware of that particular uncertainty. "It
might take a couple of quarters to know what the impact will be, or if there
will be an impact," Pandya said of the reimbursement issue.
However, a spate of bad news for the larger pharmaceuticals industry could
help biotech companies this year.
Big Pharma's troubles with drug development - including Pfizer Inc.'s (PFE)
problems with its arthritis pain medication Celebrex following Merck's (MRK)
withdrawal of its own pain medication, Vioxx - may give biotech companies
increased leverage.
Specifically, Hibernia Southcoast analyst Bennett Weintraub said,the large
drug makers may be driven into even greater reliance on development
partnerships with smaller biotech companies.
Weintraub believes one outcome will be more favorable partnership terms, and
as a result he expects a significant increase in capitalization for biotechs.
Besides Clolar, other fourth-quarter biotech success stories included FDA
approvals for Amgen Inc.'s (AMGN) Kepivance chemotherapy side-effect treatment,
Eyetech Pharmaceutical's (EYET) Macugen for macular degeneration and Sepracor
Inc.'s (SEPR) insomnia drug Lunesta.
Drugs from the biotech industry that may win FDA approval this year include
Amylin Inc.'s (AMLN) Symlyn diabetes drug, Neurocrine Bioscience' s (NBIX)
Indiplon insomnia drug, and Telik Inc.'s (TELK) Telcyta cancer drug.
None of the analysts quoted in this report own shares in the biotech sector
and their employers don't have any current banking relationships there.
Thomson First Call Year-Ago Reporting
Estimate Net Date
Genentech 22c 24c Jan. 10
Genzyme 47c 29c Feb. 17
Chiron 11c 61c Jan. 26
MedImmune 17c 30c Feb. 3
Amgen 61c 41c Jan. 27
Gilead Sciences 23c 85c Jan. 27
Biogen Idec 36c (4.03) Feb. 7
Sepracor (SEPR) (65c) (40c) Jan. 20*
Eyetech (EYET) (66c) (49c) Feb. 7*
Amlin (AMLN) (19c) (61c) Feb. 21*
Neurocrine (NBIX) (30c) 9c Feb 7*
Telik (Telk) (49c) (36c) Feb. 14*
*Projected dates based on timing of companies report in prior quarters.
(Figures in parentheses are losses.)
(The Thomson First Call estimate and year-ago net may
not be comparable due to one-time items and other
adjustments.)
-By John Seward, Dow Jones Newswires; 201-938-5400
(END) Dow Jones Newswires
01-07-05 1311ET
Don't know why the writer thinks Telcyta is due for FDA approval in 2005. If this is a common opinion, we have a problem... |
