Roche Drifting Ahead Of Key Data

Things aren't as dire at Roche (OTCQX:RHHBY) as the market may have you believe, but the reality is the company needs to deliver strong clinical data from multiple upcoming late-stage trials. Generics are coming after key drugs that contribute close to 40% of the company's total revenue, and investors need a reason to believe again that Roche can continue to generate worthwhile growth as these veteran contributors start to diminish.

I'm still more or less bullish on the Tecentriq opportunity at Roche, and I believe the company has made more progress with its pipeline than is reflected in the share price. The company definitely needs these upcoming trial read-outs to go well, but I believe the share price undervalues what I believe will be long-term mid-single-digit free cash flow growth.

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Roche Drifting Ahead Of Key Data

Seeking Alpha: After Multiple Updates, Alnylam Hasn't Cleared Up Much

It's hard to say that Alnylam (NASDAQ:ALNY) has been badly treated by the market when it still sports a $7.5 billion market cap with no approved drugs (and no approvals likely until 2018). Leaving aside the impact of the debate about drug pricing and the overall turbulence of the biotech sector, there have been some Alynylam-specific issues weighing on investors' minds - including the efficacy and tolerability of revusiran and the efficacy of fitusiran and ALN-CC5.

The latter, in particular, seems to be a flashpoint with investors, as some bulls had hoped this would be a "Soliris-killer" and an heir to the substantial revenue that Alexion (NASDAQ:ALXN) has generated in complement-mediated diseases like paroxysmal nocturnal hemoglobnuria (or PHN). Unfortunately, data presented at the ASH meeting and further discussed at the company's R&D day haven't really improved the sentiment.

As ALN-CC5 is not a big part of my valuation for Alnylam, I'm not bothered by the implications that it is not a clear winner in complemented-mediated diseases. Moreover, I think Alnylam has a potential winner in hemophilia and a deep overall pipeline of RNA interference drugs that will generate stock-moving clinical data in 2016.

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After Multiple Updates, Alnylam Hasn't Cleared Up Much

Seeking Alpha: Alnylam's CC5 Data More Like A Long Foul Than A Home-Run Or Strikeout

Alnylam Pharmaceuticals (NASDAQ:ALNY) hasn't been shy about talking up its early-stage clinical work, nor the prospects for its deep pipeline of RNAi drug candidates. The good news is that enthusiastic investors have awarded the company with a market cap of over $11 billion even though the company is likely at least three years away from its first commercial launch (and even that is no sure thing). Management has also been willing to parlay that enthusiasm into equity capital raises that have filled the company's coffers with cash to fund its clinical development program.

But there is a downside to high expectations, and Alnylam seems to seeing some of that today in the wake of initial data on the company's ALN-CC5 drug for complement mediated disease. Alynylam's data were not bad, and in fact I believe would otherwise be seen as encouraging, but expectations have ratcheted up to a point where it seems as though the company has to hit a home run every time it comes to the plate.

I am changing nothing in response to the data on ALN-CC5. I had previously valued this drug at about $2 on the basis of a 15% chance of clinical success and I am not changing those numbers. Alexion (NASDAQ:ALXN) investors still have reason to be nervous, but Alnylam has a long way to go before it can be credibly said to be a real potential threat to Alexion's Soliris franchise.

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Alnylam's CC5 Data More Like A Long Foul Than A Home-Run Or Strikeout

Seeking Alpha: Alnylam Strengthens Its Clinical Case Once Again

I can understand why many investors may be skeptical of Alnylam Pharmaceuticals (NASDAQ:ALNY). With a $10 billion market cap (as of last night's close), I believe this is the most highly-valued biotech without an actual approved drug. That creates considerable downside risk when (and I do believe it's "when", not "if") a clinical disappointment occurs.

The thing is, though, that Alnylam continues to make its case stronger and stronger. Not only has the company been very active in filling out a robust clinical pipeline, but the incremental data from those drugs has also been quite strong. Alnylam's latest announcement, positive 12-month data from an open-label extension study of patisiran, only serves to highlight that this biotech may in fact be developing a collection of medicines that deliver clear and significant benefits in a variety of undertreated conditions.

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Alnylam Strengthens Its Clinical Case Once Again

Seeking Alpha: Alnylam Pharmaceuticals Continues To Post Encouraging Results

Having written about Alnylam Pharmaceuticals (NASDAQ:ALNY) in early November, I thought I'd be done with covering the stock for a few months. Alnylam likes to make its analysts and shareholders work, though, and the updates from the company since then do merit further discussion.

Fortunately for shareholders, the updates are universally positive. Revusiran appears to be safe and while efficacy remains unknown, the company has launched the Phase III ENDEAVOUR study. Alnylam has also reported encouraging early-stage data on its ALN-AT3 hemophilia treatment, started a Phase I/II study for ALN-CC5, and has seen partner The Medicines Company (NASDAQ:MDCO) start clinical studies of ALN-PCSsc. Last and not least, the company has shifted its strategic and research priorities a bit, with three large areas of focus.

Much as I don't like the well-trod path on the sell-side of "the stock has reached my price target, so I'll raise my target", the changes in just the last month do prompt me to bump my fair value estimate higher.

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Alnylam Pharmaceuticals Continues To Post Encouraging Results

Seeking Alpha: Is Intercept Pharmaceuticals Building The Next Great Specialty Franchise?

As great as Alexion (NASDAQ:ALXN) has shown itself to be with its orphan drug Soliris for rare kidney ailments, Intercept Pharmaceuticals (NASDAQ:ICPT) may be establishing a similar path in the until-recently overlooked world of liver disease outside of hepatitis C. Intercept's lead compound OCA appears to have broad utility as an anti-inflammatory, anti-fibrotic liver treatment and the efficacy in nonalcoholic steatohepatitis (or NASH) may unlock potential akin to that of new HCV treatments.

It is important to point out, though, that there is a lot of risk in biotech investing and particularly in companies where the expectations are almost solely built around a single product. Making matters worse, there is considerable uncertainty as to the true number of potential patients for many of the diseases Intercept is targeting, to say nothing of uncertainty regarding competition, pricing, and clinical endpoints for clinical trials. Despite these risks, I believe Intercept ought to be trading closer to $420 today and even then I consider the underlying assumptions to be quite conservative.

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Is Intercept Pharmaceuticals Building The Next Great Specialty Franchise?

Seeking Alpha: A Sharp Pullback In Celldex Could Be A Window Of Opportunity

To buy when others seemingly can't sell fast enough takes a lot of guts (and other less family-friendly attributes), but it can be one of the best ways to exploit Wall Street shortsightedness. Small-cap oncology immunotherapy biotech Celldex (CLDX) has gotten swept up in this biotech bubble-popping, even though the data from the company has generally been positive and supportive of the idea that this company has some promising high-potential drugs.

On a risk-adjusted basis, I calculate a fair value of $29 per share for Celldex, suggesting significant upside from today's level. Readers have to consider two key risks here. First, there is the ever-present biotech risk that Celldex's drugs will fail in advanced clinical studies and never make it to market. Second, there is a growing risk that investors are cycling out of biotech and may no longer be willing to use the same long-term revenue multiples and discount rates. A true rout in the biotech space could take these shares down another 50% without any bad news from the company, but investors who can stomach that risk as the price of admission to a potential winner should look further into this story.

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A Sharp Pullback In Celldex Could Be A Window Of Opportunity

The Motley Fool: Can Alexion Pharmaceuticals Continue to Deliver?

Successful biotechs are generally expected to reinvest their profits into the development of broad pipelines, but Alexion  (NASDAQ: ALXN  )  is following a somewhat different path. While I do not mean to give short shrift to this company's pipeline development efforts, the fact is that Alexion has been more interested in maximizing the value of its blockbuster orphan drug Soliris than relying on new development projects. That strategy has served the company well so far, and while there may some reasons to question whether health care systems will continue to support such generous reimbursement for orphan drugs, Soliris could yet offer significant growth potential.

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Can Alexion Pharmaceuticals Continue to Deliver?

The Motley Fool: BioMarin Pharmaceutical, Inc.-- Is This Orphan Drug Specialist Overvalued?

It's not easy to develop treatments for rare diseases, but it is hard to argue with the rewards. Prior to its acquisition by Sanofi (NYSE: SNY  ) , Genzyme had already established itself as an important player in enzyme replacement therapies, and Shire (NASDAQ: SHPG  ) and Alexion (NASDAQ: ALXN  ) have both gone on to find meaningful success with treatments that serve tiny patient populations, but carry huge price tags.

BioMarin (NASDAQ: BMRN  ) very much deserves to be in this conversation, as the company has one of the broadest portfolios and pipelines for rare diseases. BioMarin's pipeline definitely has clinical risk and I don't think investors should just assume that payers will always go along with the pricing these companies want. The biggest issue may be overall expectations, though, as BioMarin is going to have to become extremely profitable and deliver exceptional revenue growth just to meet current expectations.

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BioMarin Pharmaceutical, Inc.: Is This Orphan Drug Specialist Overvalued?

Investopedia: Roche Delivering Leverage, But Needs Diversification

These remain good days for Swiss drug and diagnostics giant Roche (Nasdaq:RHHBY), as the company continues to see double-digit growth across most of its oncology franchise, with ongoing growth in diagnostics and early signs of additional operating leverage. While Roche's oncology pipeline looks solid, it's well worth asking if management has been too slow to move to bulk up other areas. Although Roche shares still look a little undervalued, M&A speculation is likely to remain in play for the foreseeable future, likely adding volatility to the shares.

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Investopedia: Alnylam Basking In Orphan Drug Attention

It's been a pretty wild ride for Alnylam (Nasdaq:ALNY) shareholders, even by the elevated standards of biotechnology. Once thought to have the IP keys to one of the next great platform technologies (RNA interference), the stock was hammered down over several years as multiple Big Pharma companies chose to back away from the technology and partnerships with Alnylam. Since late 2011, though, it's been a return to investor love for Alnylam as positive clinical data and a bull market in biotech has fueled a fourfold rise in the shares.

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Seeking Alpha: Omeros Doesn't Look Like That Much Of An Opportunity

Biotechnology is hard enough all on its own without investors complicating things with low-potential drugs in difficult markets. With that in mind, I don't see significant opportunity in Omeros (OMER). The company's near-term pipeline for ophthalmology and knee surgery isn't all that promising, and the early-stage pipeline of MASP-2, PDE10, PDE7, GPCR, and PPAR-gamma has far too little supporting data at this point to validate a high valuation or multiple.

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Omeros Doesn't Look Like That Much Of An Opportunity

Seeking Alpha: Controversial Questcor Still Looks Like A Buy

Questcor (QCOR) investors have had quite the ride over the past year. In addition to positive clinical data, the company has seen encouraging success in expanding its business in nephrology and rheumatology, but investors will not soon forget the nearly two-thirds dive that the stock took on word that Aetna (AET) was essentially dropping coverage on the company's only product.

There's no doubt that Questcor is a risky stock. All of the company's revenue comes from a single product that is off-patent (but very hard to manufacture) and the company has no pipeline to speak of. Even so, the shares appear undervalued with relatively little downside at present.

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Controversial Questcor Still Looks Like A Buy

Seeking Alpha: Don't Fold On Amicus Therapeutics Just Yet

It's hard enough to pick winners in biotech, but when companies try to explain away bad trial data with "don't look at that, look at *this*" post hoc analysis, all manner of alarms and sirens should go off in investors' heads. And yet, for every rule there is an exception, and I think Amicus Therapeutics (FOLD) may just be that rare exception. While I realize that hope and belief are more suited to theology than biotechnology, I do believe that Amicus's lead drug is effective and safe, and I hope that a 12-month follow-up of its pivotal study will be able to demonstrate that sufficiently for the FDA to grant approval.

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Don't Fold On Amicus Therapeutics Just Yet

Seeking Alpha: If Investors Won't Buy Shire, Big Pharma Should

Given the premium that Novo Nordisk (NVO) enjoys for its very strong position within diabetes care, you might think that a company with strong positions in two significant pharmaceutical areas would enjoy an even bigger premium. That's not the case for Shire (SHPG), though, and investors may have an opportunity here to take advantage of one of the few bargains in the pharma space. Moreover, with Big Pharma likely on the prowl for add-on deals, Shire's relative value may make it an appealing target.

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If Investors Won't Buy Shire, Big Pharma Should

Seeking Alpha: Pfizer Needs To Reload

I was a fan of Pfizer (PFE) early in 2012, and the stock delivered good returns as it beat the S&P 500. At this new, higher, price level it is a little harder to have quite the same affection for the company. I do have respect for how the company has streamlined - cutting costs, selling the nutrition business to Nestle, and preparing for the spin-off of Zoetis. I also think there are some worthwhile drugs both in the pipeline and early launch phases. All that said, it's hard to be as excited about the stock's value today, and I wonder if it's time for another large-scale move to better position the company for long-term growth.

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Pfizer Needs To Reload

Seeking Alpha: Nothing Wrong With A Quiet Quarter At Pfizer

Big Pharma companies rarely move their stock in a significant positive direction with earnings, so a quite quarter at Pfizer (PFE) is perfectly fine. It's worth noting, though, that brutal cost-cutting measures are paying off in terms of excellent operating margins. If Pfizer can wring success out of its maturing late-stage pipeline, this could once again be a full-fledged blue-chip stock.

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Nothing Wrong With A Quiet Quarter At Pfizer

Seeking Alpha: How Much Further Can Rare Diseases Carry BioMarin?

Investors have long known that there can be huge money in rare diseases, and over the years they have rewarded stocks like Genzyme (now part of Sanofi (SNY)) and Alexion (ALXN) accordingly. As another player in the rare disease space, BioMarin (BMRN) already sports a nearly $4 billion market cap, but with a lot of key clinical data coming in the next few quarters, it's worth exploring how much more could be left in the tank.

The Businesses In Hand
BioMarin is a somewhat rare biotech in that it already has four drugs approved and on the market.

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How Much Further Can Rare Diseases Carry BioMarin?

Seeking Alpha: Alexion Pharmaceuticals A Tricky Mix Of Biotech And Pharma

Alexion (ALXN) has done what so few biotechs ever manage to do. Not only has the company successfully developed a drug, it has stayed independent and achieved profitability on its own. Now the company is in that tricky area grey area between biotech and pharma, an area that can be dangerous to valuations and new investors.

Soliris A Powerful Engine
The Alexion story today is all about Soliris, the company's drug for paroxysmal noctural hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). PNH and aHUS are uncommon diseases, but like Genzyme (before it was acquired by Sanofi (SNY)), Alexion has built a lucrative franchise around a unique drug that commands incredible pricing. 

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Alexion Pharmaceuticals: A Tricky Mix Of Biotech And Pharma

Seeking Alpha: Alnylam Looks Nearly Left For Dead

By no means is it easy to try to launch an entirely new class of pharmaceuticals, but that is essentially what Alnylam Pharmaceuticals (ALNY) has set out to do. Despite some encouraging (albeit very early) signs of success, investors have very much taken note of Big Pharma's increasing skepticism towards what this company is trying to do. Consequently, the stock trades for little more than the cash on its books despite a promising pipeline that is only getting started in human studies.

The Long March
Investors who have high hopes for Alnylam's RNA interference (RNAi) technology may want to take a page from the history books. Although Amgen (AMGN), Biogen Idec (BIIB), Johnson & Johnson (JNJ), and Roche (RHHBY.PK) have all had success with recombinant protein and monoclonal antibody drugs, the reality is that the science underpinning these drugs really started early in the 20th century and it took more than a decade for promising (and Nobel Prize-winning) research in the 1970's to actually result in approvable drugs.

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Alnylam Looks Nearly Left For Dead