Seeking Alpha: Investors Already Expect A Lot From Ariad Pharmaceuticals

Biotech investors have to make some tough choices when it comes to oncology drug companies. On one side of the ledger are small, cheap-looking stocks that could triple if their pivotal trials beat the odds and succeed. On the other side are the companies which much more certain prospects, but considerably higher valuations. With Ariad Pharmaceuticals' (ARIA) stock already incorporating some pretty big things, investors have to ask how much more than can expect to reap from it.

Shrugging Off A Minor Setback
News from Ariad hasn't been all that positive of late. The FDA's advisory committee roundly punted the application made by Ariad's partner Merck (MRK) to market ridaforolimus for sarcoma. While modest improvements in progression-free survival had kept expectations low, bad news is still bad news. Although the loss to Ariad's implied valuation was minimal (perhaps $2 to $3 per share based on about $175 million to $200 million in potential revenue and milestones/royalties), the co-promotion angle could have been of more long-term use to Ariad.

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Investors Already Expect A Lot From Ariad Pharmaceuticals

Seeking Alpha: Challenging Targets Could Pay Off For Ziopharm Oncology

Give the management at Ziopharm Oncology (ZIOP) credit - they're not looking to be a me-too player in easy drug categories. Although Ziopharm isn't initially targeting oncology markets with huge top-line sales potential, offering decidedly better mousetraps could nevertheless translate into very solid market shares and attractive partnership economics down the line.

Old School In A New Way
There's no question that there has been a lot of excitement around new targeted approaches to cancer. Whether it's monoclonal antibodies like Amgen's (AMGN) Vectibix or Roche's (RHHBY.PK) Avastin, antibody-drug conjugates, or cancer vaccines, dozens of experimental drugs have been advanced on the basis of the sometimes severe systemic toxicity that often goes with chemotherapy.

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Challenging Targets Could Pay Off For Ziopharm Oncology

Investopedia: The Top Biotech Performers of 2011

This has really been a year of the "haves" versus the "have nots" in biotechnology. Although a few dedicated biotech ETFs have done rather well and there have been some huge individual outperforming stocks, the sector as a whole has not necessarily been all that strong. Still, for those companies that could deliver encouraging data, particularly in the fields of hepatitis and cancer, the market was more than willing to reward the stocks with a higher valuation.


Hepatitis C - The Story of 2011
If any one theme should leap out at biotech investors in 2011, it is the explosion of interest in companies targeting hepatitis C. It is not as though hepatitis C is a new disease, but a host of companies have finally developed compounds that look to offer major improvements in disease management and quality of life for the millions of people with this condition.

Two of the top three performing biotechs with current market capitalizations above $250 million are hepatitis C plays. Pharmasset (Nasdaq:VRUS) has delivered the sort of year that biotech investors dream about for 2011, with the stock up nearly 500% in the last year. The stock was already doing incredibly well on the basis of very strong clinical data in PSI-7977 trials - data that basically showed 100% response in early administration of the drug. This stock found another level, though, when Gilead Sciences (Nasdaq:GILD) stepped up and offered to pay a considerable premium to acquire the company.


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ASCO - A Big Deal For Biotechs (Pt 2)

This is the second of three articles previewing the ASCO meetings in Chicago next week.

One of the major biotech events of the year is fast approaching. The annual meeting of the American Society of Clinical Oncology (ASCO) will take place in Chicago June 4-8. This event is like Woodstock for biotechnology - if Woodstock were clean, air-conditioned and had plenty of restrooms. If you invest in biotechs or pharmaceuticals that want to play in the huge and well-reimbursed world of oncology, this is one of the major events of the year.

Ahead of the meeting, ASCO releases a list of abstracts that scientists and companies will present. In some cases, these abstracts give away at least most of the story (efficacy, safety, etc.), while other abstracts are embargoed until the meeting itself. In any case, investors can still look forward to follow-up data (abstracts are submitted well ahead of the meeting), and often the amount of attention garnered by a presentation reflects overall interest in the compound. (For more, see Stocks On Drugs: What It Takes To Get High.)

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