I also wanted to touch on Xoma (XOMA), if possible. How does this company look to you?
Xoma is really doing well right now. We’ve had a Buy on Xoma for about two years, and the stock is performing very well. All the buzz around Xoma right now seems to be about Xoma 052, which is their monoclonal antibody that they are moving into phase I clinical trials. This is a product that’s completely owned by Xoma, it’s developed internally, it’s been humanized using their human engineering technology, and like I said there’s a lot of buzz around the product right now.
It is an antibody that targets interleukin-1, which is a well-known, clinically validated target for diabetes and inflammatory disease. The benefit of Xoma 052 is that it’s got an incredibly high affinity, which will allow it to be in the body, inactive, for extended periods of time. Specifically, the company is looking at a type-2 diabetes indication for the drug. And if you think about type-2 diabetes and the types of drugs that are on the market now, you’ve got either daily injections – some of them are even two or three times a day – or you have daily pills, which some are also two or three times a day.
Two drugs that have recently been approved are Merck’s (MRK) Jenuvia, which is a daily pill, and Amylin’s (AMLN) Byetta, which is a daily injection, actually twice a day. Xoma’s drug is such a high binder that it has the potential to be either a once-monthly or a once-quarterly injection. That would be an incredible breakthrough for patients; instead of injecting yourself two or three times a day, if you can get similar efficacy and inject yourself once a quarter, that’s almost a no-brainer in my space. So we’re very positive on Xoma. 052 is very early stage, but it really has the potential to be something special for the company.
So as far as the stock price, where is it trading now and where do you expect it to go?
It’s trading just a little over three bucks, and we feel Xoma has the potential to be around $5.00 by year-end.
Jason Napodano, CFA is a senior analyst covering the biotechnology industry for Zacks Equity Research. (5/17/07) |
