Keep These Biotechs On Your Radar
This
week’s initial biotech buzz will focus on the FDA’s final approval of
AstraZenca’s novel treatment for lung
cancer, an approval that should come today. The drug Iressa is an entirely new
approach to the treatment of cancer, an approach that other companies are trying
to mimic. Last September, the drug was recommended by an FDA advisory panel as a
potential new treatment for a specific type of lung cancer. However, there were
some reservations in regards to its real efficacy and reported side effects. The
drug has been approved in several other countries.
Iressa acts by blocking specific growth factors that fuel the uncontrollable
growth of malignant cells. It falls in the category labeled Epidermal Growth
Factor Receptor (EGFR) inhibitors and has shown some promise in late stage
clinical trials. However, so far this class of drug has not entirely lived up to
the potential so many thought it possessed when first discovered. Drugs of this
genre were thought to be lethal missiles targeted for a variety of cancers and
devoid of many of the unwanted side effects of standard chemotherapy. However,
like many drugs that have come before it (think Sam Waskel’s
ImClone and the drug Erbitux), the initial enthusiasm dampened as it
progressed through clinical trials.
Will the full FDA give its blessing to this drug? Possibly. However, it will not
be a blanket blessing because it does have some side-effect issues and some in
the medical community are not convinced it even works. Regardless, it appears
AstraZeneca’s stock has already incorporated an unblemished FDA decision into
its stock price based on its 30% rise since early March. If the FDA decision is
tainted with reservations or the FDA requests more trials to be held, I expect
some serious downward momentum to take hold.
When the final decision is made, keep an eye on some other companies developing
similar drugs in their pipeline. AstraZeneca decision repercussions will be felt
by OSI Pharmaceuticals
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Genentech
(
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developing their own epidermal growth factor inhibitor called Tarceva. The drug
is currently being tested in phase III clinical trials to treat nonsmall cell
lung cancer and pancreatic cancer. Data is expected to be released on these
trials during this or the next quarter. Expect data to be presented at the
upcoming ASCO meeting at the end of this month. In addition,
Abgenix
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Amgen
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called ABX-EGF through late stage clinical trials and both companies will be
affected by today’s FDA decision.
There are two other smaller biotech’s I am keeping in focus. Pain
Therapeutics
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recently completed a small study testing its novel drug (PTI-901) in patients
with Irritable Bowel Syndrome (IBS). The company expects to announce
preliminary results this month. IBS is a big market disease, affecting millions
of people worldwide. It is an incurable disorder involving the intestine. It
affects mainly women and leads to chronic pain, constipation, and/or diarrhea.
The etiology of the disease is not known and there is currently no good
treatment for it. Why is this data announcement important to the company? First
of all, IBS is a huge, untapped medical market where many other companies have
tried, but failed, to enter. In addition, Pain Therapeutics holds exclusive
commercial rights to the drug. If the data suggests some efficacy of Pain
Therapeutics’ PTI-901 for the treatment of IBS, this will be a very big
accomplishment. It will also be very noticeable as well. Keep this company on
the radar screen as May marches on.
One final company that I am focusing on is
CardioGenesis
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something very interesting going on. It has developed a minimally invasive laser
technology to treat patients, who have been deemed inoperable, with severe
coronary artery disease or angina This technology is called Percutaneous
Myocardial Revascularization or PMR. It involves literally lasering holes in
the heart with technology placed through a small incision in the groin. The
company has shown from previous data these holes induce new blood vessels to
form, blood vessels that supply much-needed oxygen to deprived heart muscle.
What is interesting here is that CardioGenesis’ initial application to an FDA
advisory panel was rejected last year. However, like the dying heart muscle it
is supposed to help, the application may have a new life. In February, the
company announced that an independent FDA panel will review new data and
reconsider the decision made last year. This review should take place within the
next few months. To be honest, I like its chances of getting a favorable
decision. I say this because the company’s technology does seem to work in
patients who undergo major open-heart surgery. In addition, the patients the
technology is trying to treat really has no options left. I have seen this
phenomenon before, where an independent FDA review panel overturns a previous
panel’s decision. When it does happen, the company’s stock price loves it. In
this situation, the upside potential gain is far greater than any downside
risk.
Good Luck.
Paul Ruggieri, MDÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
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