Seeking Alpha: Roche Loses A Little Luster Before Year-End

Even good drug companies have to cope with the fact that drug development is difficult and negative outcomes are more likely than clinical successes. Roche (OTCQX:RHHBY) has had plenty of wins over the year, and the company's presentations at September's ESMO meetings included some fantastic results, but the news on Friday was decidedly more negative for Roche as it reported surprisingly disappointing data from its MARIANNE front-line breast cancer study and saw yet another clinical failure in its non-oncology pipeline.

The disappointment of the MARIANNE study is tempered by the company's robust portfolio and deep immuno-oncology pipeline. Even so, the setback to Kadcyla takes some upside out of the story and the shares appear more or less fully valued at this point in time. I believe that the quality of Roche makes holding it still a worthwhile proposition, but investors with new funds to deploy should look around the space a bit first.

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Roche Loses A Little Luster Before Year-End

Seeking Alpha: Risk And Reward Seem Pretty Balanced At Seattle Genetics

Oncology biotech Seattle Genetics (NASDAQ:SGEN) has had a bit of an interesting ride since I reviewed the company's prospects and valuation back in December. The shares moved up about 40% through February of this year on optimism for the company's deep portfolio of antibody drug conjugate (or ADC) compounds, not to mention biotech enthusiasm in general, before getting caught up in the great biotech washout and fears tied to the safety of lead drug Adcetris and changes to clinical trials. Add in some concerns about competition from immuno-oncology drugs and there's a lot to digest. When it is all said and done, not all that much has changed on a "net basis" in my view - Seattle Genetics doesn't look as compelling on a value basis, but there's significant upside if clinical trial read-outs de-risk the pipeline.

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Risk And Reward Seem Pretty Balanced At Seattle Genetics

Seeking Alpha: Weighing Out The Seattle Genetics Barbell

Looking at Seattle Genetics' (SGEN) value makes me think of a barbell, as the valuation is split between the near-term potential of the approved oncology drug Adcetris in maintenance and salvage indications in Hodgkins, anaplastic large cell, and cutaneous T cell lymphomas, and the longer-term potential of extending Adcetris into front-line therapy and the company's pipeline. As is, I think there's enough value in the existing Adcetris business to support a price in the mid-$20's, but it is clear that the real value lies in the longer-term opportunities.

I think Seattle Genetics deserves to trade in the mid-$40's today, but this could well be a frustrating stock to own. With most of the company's pipeline in early stages of development and partnered programs offering only modest royalties, I suspect investors may get impatient with the years-long wait for data from the front-line ECHELON trials and the Street's fixation on the quarter-to-quarter wobbles in Adcetris sales.

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Weighing Out The Seattle Genetics Barbell

Seeking Alpha: Is ImmunoGen More Than T-DM1?

One of the crueler aspects of biotech is that investors can be right about a technology or drug, but still not make much money from it. Bad deals, bad management, and mismanaged expectations can sometimes do harm that even blockbuster drugs can't fix. While I don't think any of that applies to ImmunoGen (IMGN), I do wonder how much value lies in this company's Targeted Antibody Payload (TAP) technology (basically the company's own antibody drug conjugate approach).

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Is ImmunoGen More Than T-DM1?

Seeking Alpha: Roche Hosts An Encouraging Investor Day

Sometimes it's good to just rally the troops a bit. While I didn't see anything especially new in Roche's (RHHBY.OB) Investor Day presentations, it was a good reminder as to the depth, breadth, and quality of this Big Pharma's drug and diagnostics pipeline. History says that several of these currently-promising programs will fall by the wayside, and Roche's shares are not quite slam-dunk cheap, but this remains a quality to name to hold in the healthcare space.

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Roche Hosts An Encouraging Investor Day

Seeking Alpha: Should Seattle Genetics Start Thinking More Like A Pharma Company?

Approval and launch hasn't quite meant Easy Street for Seattle Genetics (SGEN). Granted, the company now carries a $2 billion market cap and has doubled over the past two years, but there still seems to be a great deal of controversy about the true potential of its drug Adcetris and the subsequent fair value. Oddly enough, perhaps part of the answer is for Seattle Genetics to think a little more like a pharmaceutical company and a little less like a biotech.

Where Will Adcetris Go?
Arguing about market potential and peak sales is nothing new in biotech -- just review the debates at AEterna Zentaris (AEZS) or Vivus (VVUS) sometime -- but the spread in sell-side estimates for Adcetris still surprises me. I've seen expectations as low as $250 million to as much as $900 million. On the low end, it would assume that Seattle Genetics finds largely unmitigated failure in extending the label and usage; on the high end, it presupposes that almost everything goes right.

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Should Seattle Genetics Start Thinking More Like A Pharma Company?

Another Setback For Roche Is Bad News For ImmunoGen

For Swiss drug and diagnostics giant Roche (Nasdaq:RHHBY), the hits just keep on coming. Already bruised by setbacks in the Avastin franchise, Roche announced Friday morning that the FDA rejected an accelerated approval application for T-DM1, a potentially major drug for metastatic breast cancer. As the originator of the drug and Roche's partner, ImmunoGen (Nasdaq:IMGN) will also suffer for this surprising FDA decision. 

Precision Munition for Resistant Patients
In very simplified terms, T-DM1 is a derivative of Roche's successful Herceptin drug. ImmunoGen found a way to add a cell-killing compound (DM1) to the HER2 binding antibody trastuzumab that is the active component of Herceptin. What this means in practice is that T-DM1 hones in on the HER2+ cancer cells and delivers a lethal dose, while sparing the sort of system-wide toxicity that so often limits powerful drugs. In early stage studies this drug has shown progression-free survival of five to seven months and Roche had been talking about this drug as a $2-$5 billion/year opportunity.


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