Seeking Alpha: GlaxoSmithKline's R&D Is Delivering, But The Street's Not Buying

One of the less endearing, if not outright annoying, traits of those who make up Wall Street is their tendency to harp on whatever a company doesn't have at the moment. In the case of Big Pharma, good current quarterly results are often waved off with skepticism about generic competition and/or the pipeline. For GlaxoSmithKline (GSK) it looks like the reverse is true. Forget the solid pipeline and good recent Phase 3 results, it's this quarter's bad performance that somehow proves Glaxo isn't a good company.

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GlaxoSmithKline's R&D Is Delivering, But The Street's Not Buying

Seeking Alpha: Glaxo And Human Genome Have Apparently Seen Reason

If word from usually reliable Bloomberg is to be believed, the managements of GlaxoSmithKline (GSK) and Human Genome Sciences (HGSI) have seen reason and reached an agreement on a friendly transaction. While this deal is an unconfirmed rumor at the time of this writing, Glaxo has supposedly upped its offer by a little less than 10%, to $14 per share or $2.8 billion in cash.

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Glaxo And Human Genome Have Apparently Seen Reason

Investopedia: Healthcare Outlook For The Week Ahead

With the Fourth of July holiday coming smack in the middle of the week, this week is likely to be light on news and investable events for investors. Trading volumes will likely be thin, and there are no scheduled announcements of any significance.

Will Glaxo up Its Bid? 
GlaxoSmithKline (NYSE:GSK) ended last week by extending its tender offer to acquire Human Genome Sciences (Nasdaq:HGSI), but has not increased its bid beyond the original $13 per share. With Human Genome shares trading just above $13, it seems that investors have only modest confidence that a higher bid will come, though RBC's Michael Yee recently published a note suggesting that a higher bid (of $15 per share) could be on the way.

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http://stocks.investopedia.com/stock-analysis/2012/Healthcare-Outlook-For-The-Week-Ahead-HGSI-GSK-HCA-TEVA0703.aspx

Seeking Alpha: Better Days Ahead For GlaxoSmithKline

Britain's GlaxoSmithKline (GSK) is relatively unusual among drug companies today. Not all that much revenue is left vulnerable to patent expirations, the company has a deep pipeline balanced between potential home runs and solid singles and doubles, and only one drug accounts for more than 10% of pharmaceutical sales. While the Street has already rewarded Glaxo with a healthy valuation, there is still a great deal of debate as to the potential of key pipeline candidates and shareholders could yet see upside here if a few key drugs exceed expectations.

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Better Days Ahead For GlaxoSmithKline

Seeking Alpha: Will Human Genome End Up Blazing A Trail For Others?

Human Genome Sciences' (HGSI) Benlysta isn't the first would-be blockbuster to disappoint investors with its initial launch, but it's one of the larger disappointments in recent memory. While there is still a good case to make for Benlysta eventually being a successful drug, it's starting to look as though Human Genome and GlaxoSmithKline (GSK) may do all of the heavy lifting and trailblazing in lupus only to ultimately get left behind.

Benlysta - Waiting For Trialing, Or Waiting For Godot?
At the time of its approval, Benlysta was hailed as a multi-billion dollar blockbuster drug in the making. What's more, reading sell-side research would lead one to think that the SEC passed a rule requiring all analysts to mention that Benlysta is the first new drug for lupus in 50 years.

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Will Human Genome End Up Blazing A Trail For Others?

Seeking Alpha: GlaxoSmithKline A Good Mix Of Income And Opportunity

There are relatively few drug companies that offer a truly balanced opportunity for investors. In many cases investors have to factor in the risk of significant near-term patent losses or uninspiring (or highly risky) pipelines. GlaxoSmithKline (GSK) is something of an exception in that regard. Although the near-term growth outlook is not blistering, Glaxo offers investors a good mix of capital appreciation potential, dividend income, and pipeline potential.

A Disappointing And Somewhat Confusing End To The Year
Due to a host of charges and items, Glaxo's fourth quarter results were messy and subject to a little more interpretation than usual. What was pretty clear, though, was that sales performance came up lacking. Revenue shrank about 2% in constant currency terms (below the expectation of 1% growth), with a sharp decline in vaccine sales the largest single culprit.

Sales of Advair were okay (though there was little growth), while smaller products like Avodart grew nicely. Glaxo had little to say about much-discussed Benlysta (which it sells under an agreement with Human Genome Sciences (HGSI), and HGSI had previously announced disappointing quarterly sales.

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GlaxoSmithKline: A Good Mix Of Income And Opportunity

Seeking Alpha: The New Amylin - More Risk More Potential

Amylin Pharmaceuticals (Nasdaq: AMLN) will forever be a reminder to biotech investors that blockbuster product approval does not guarantee anything in the market. Once a darling because of its first-in-class GLP-1 analog Byetta for diabetes, Amylin has had a rough go of it in the face of competitive offerings, regulatory setbacks, and internecine wars with a former partner.
For all of the drama, though, there may yet be potential in this battered biotech.

Bydureon – Is Third Time The Charm?
Bydureon, a once-weekly injected drug otherwise similar to Byetta, has long been the crown jewel in Amylin's vault but the company has struggled to bring it to market. Not only did a marketing study comparing Bydureon with Novo Nordisk's (NYSE: NVO) once-daily Victoza fail to show non-inferiority (meaning Victoza works better), but the FDA has twice rejected this drug within the past two years.

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The New Amylin - More Risk, More Potential

Seeking Alpha: Lexicon Pharmaceuticals - A Worthwhile Speculation

With investors spoiled for choice in the biotech sector, it is easy for stocks to slide off the radar – particularly those who haven't long enjoyed major investment bank support or been willing to resort to dubious promoters. Although there is no such thing as a safe early-stage biotech, aggressive investors looking for something a bit off the beaten track may want to check out Lexicon Pharmaceuticals (Nasdaq: LXRX).

Trying To Make The Most Of A New Life
Lexicon actually traces its history back to the mid-90s when investor enthusiasm for all things genomic overrode good sense and allowed many dubious business models to come to the public market. Like Celera, Human Genome Sciences (Nasdaq: HGSI) and DeCODE Genetics, Lexicon thought it could establish a viable business model by selling or licensing genomic and proteomic information to large pharmaceutical companies like Bristol-Myers Squibb (NYSE: BMY) and Roche (Nasdaq: RHHBY.PK). Suffice it to say, this was a model doomed to fail and Lexicon opted to reorganize around its data and recast itself as biotechnology company, using its own data to identify potential therapies for significant diseases.

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Lexicon Pharmaceuticals: A Worthwhile Speculation

Investopedia: Dendreon's Bull Story In Intensive Care

For Dendreon (Nasdaq:DNDN) bulls, the sky was going to be the limit. Provenge, a high-priced cancer vaccine shown to be effective in serious prostate cancer cases, was going to be a multi-billion dollar blockbuster, and Dendreon was going to ride it on the way to becoming the next Amgen (Nasdaq:AMGN), Biogen Idec (Nasdaq:BIIB), Centocor or Genentech.

And then came the second quarter results.


A Startling Turn of Events
Dendreon skeptics were certainly out there before August 3. The incredible rise in Dendreon's stock price on the back of a very expensive drug, which offered limited additional survival benefit and was the first ever of its kind, had shorts licking their chops. Even the analyst community (which is often quite bullish and positive as a general rule) had it skeptics. Analysts like Lucy Lu at Citigroup and Lee Lalowski at Credit Suisse, for instance, publicly wondered whether expectations were too high given the cost of Provenge and issues of doctor comfort with the therapy.

 

To read the full article, follow the link below: 

http://stocks.investopedia.com/stock-analysis/2011/Dendreons-Bull-Story-In-Intensive-Care-DNDN-JNJ-SGEN-HGSI-AMGN-BIIB0809.aspx

Seeking Alpha: Do Dendreon's Problems Matter To Your Biotech Portfolio?

There was no shortage of skeptics about the true market potential of Dendreon's (DNDN) Provenge cancer vaccine, but there were few credible prognosticators who predicted the magnitude of the disappointment in Provenge sales. What has been most interesting about the reaction to this shortfall, though, is how it blitzed the entire biotech sector. While the data gets sketchier the further back one goes, the post-Dendreon reaction Thursday (a bad day for the market overall), may have resulted in the worst single day in the history of the sector.

The question for investors, though, is whether or not the problems at Dendreon really have anything to do with their particular holdings. Though many investors may have sold their biotech stocks after the Dendreon news thinking that it's just too hard to figure out the eventual winners and losers (after all, FDA approval is supposed to the key to the vault), the reality is that nothing at all has really changed for the large majority of companies developing new drugs for diseases like hepatitis C, diabetes, or cancer.

To read the full piece at Seeking Alpha, please follow the link:
Do Dendreon's Problems Matter to Your Biotech Portfolio?

Investopedia: Arena's New Data Doesn't Change Obesity Pill Outlook

It is understandable that long-suffering Arena Pharmaceuticals (Nasdaq:ARNA) would react very positively to an almost sign of good news. After all, this company's stock has taken a pounding in the wake of the FDA's rejection of the company's drug lorcaserin for obesity. While any positive news relating to efficacy certainly does not hurt the prospects for refiling the drug application and eventually gaining approval, Thursday's news does not solve Arena's biggest problems.


Is Meta-Analysis the Same as Data Mining?
On Thursday morning, Arena announced data from meta-analyses of three of the trials for lorcaserin. This data was presented at the European Congress on Obesity and indicated that almost half of patients taking two 10mg doses a day saw more than 5% weight loss, more than double the rate of response in the placebo group. More than one-fifth of those same patients saw better than 10% weight loss; nearly triple the response seen in the placebo group.

Unfortunately, most observers are going to regard this data with a shrug. Clauses like "Modified intent-to-treat with last observation carried forward" are tantamount to data mining in many people's eyes, and the FDA has been very aggressive in rejecting such analyses. This is not to say that lorcaserin doesn't work; rather it just seems unlikely that the FDA is going to revise its viewpoint that lorcaserin offers "marginal efficacy" on the basis of a new look at old data (as opposed to a new study showing better outcomes). 



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Investopedia: Glaxo And Human Genome Find Rare FDA Success

In a refreshing change of course, the FDA has approved a significant new drug. GlaxoSmithKline (NYSE:GSK) and Human Genome Sciences (Nasdaq:HGSI) announced after market close on Wednesday that the FDA had informed the companies of the approval of their application to market Benlysta for the treatment of lupus. It no doubt helped greatly that the safety/side-effect profile on Benlysta was quite clean, to say nothing of the clear clinical need for new lupus treatments. (For background reading on the FDA approval process, see A Primer On The Biotech Sector.)

Where Now? 

With approval in hand, the two companies will begin marketing the drug relatively soon, with a 50/50 split of costs. While there was a general expectation that HGSI and Glaxo would price Benlysta in line with drugs for multiple sclerosis or arthritis, the two companies went a bit more toward the high end of the range and Benlysta will cost about $35,000 a year (more in the first year of treatment). (For related reading, check out Pharmaceutical Phenoms: America's Best Selling Medicines.)

The FDA also gave the company a rather favorable label. While the drug is contraindicated in some of the most severe and lethal forms of lupus (those that involve the kidneys and central nervous system), the companies estimate that there are at least 200,000 eligible patients. In actual practice, though, it would be a bit surprising if more doctors did not give it a go in some less-severe cases. 

The FDA's approval is partly conditional; the two companies will have to conduct a study of the drug in African-Americans. So far to date, Benlysta's results in this patient group have not been favorable, but they have not been statistically convincing either. Given that the rate of lupus is almost three times higher in people of Afro-Caribbean descent (compared to the overall incidence rate in the U.S.), that is clearly a subject that merits study.

To read the full piece, please go to:
http://stocks.investopedia.com/stock-analysis/2011/Glaxo-And-Human-Genome-Find-Rare-FDA-Success-HGSI-GSK-IMMU-PFE-AZN-FRX0310.aspx

Seeking Alpha: Battered But Unbroken Biotechs

Disappointment is a fact of life with biotech investment. While clearly some companies do go on to become Amgen (AMGN) or Gilead (GILD), the roughly 85% failure rate for new experimental drugs means that most companies will eventually fail … or do little more than struggle along from disappointment to disappointment while using even the slightest glimmers of hope to shake down shareholders for more capital.

Despite that somewhat morbid lead-in, the reality is that some biotechs do recover after periods of disappointment and malaise. Current successes like Alexion (ALXN) and Celgene (CELG) had their trials by fire and came back to handsomely reward those who took a chance on them during the dark days. In fact, history has shown that sometimes the best time to buy is after the initial enthusiasm has been wrung out of a stock and management has earned some credit hours from the school of hard knocks.

To read the full piece at Seeking Alpha, please click here:
http://seekingalpha.com/article/255516-battered-but-unbroken-biotechs?source=mc_all

Please note: I mistakenly listed "Glaxo" as Nektar's partner on the inhaled pneumonia drug, when it should be (is) Bayer. That correction should get made promptly...

Seeking Alpha: Clinical Data And Forest Labs Agree To Split The Risk

The tug of war between Clinical Data (CLDA) bulls and bears has ended in what has to be called a draw. Flying in the face of the bear argument that Clinical Data's recently-approved depression drug Viibryd is little more than a me-too drug with scant prospects, Forest Labs (FRX), a company that knows more than a little about depression drugs, has agreed to purchase the company for $30 a share in cash and up to $6 more in contingent payments.

Of course, bulls should not be limbering up for an unbridled victory lap either. At $30, the guaranteed part of Forest's bid represents a take-under to the tune of nearly $4 per share. Moreover, if Viibryd really takes the market by storm and becomes a $2 billion or even $3 billion a-year drug, this deal is hardly full and fair compensation.

To read the full piece, please go to:
http://seekingalpha.com/article/254167-clinical-data-and-forest-labs-agree-to-split-the-risk?source=mc_market

Human Genome Takes A Big Step Forward

One small step for an FDA advisory panel, one leap forward for biotech company Human Genome Sciences (Nasdaq:HGSI). 

Late Tuesday, an FDA advisory panel voted by the surprisingly wide margin of 13-2 to recommend approval of HGSI's Benlysta for the treatment of lupus. This drug, which top-tier pharmaceutical company GlaxoSmithKline (NYSE:GSK) has been developing under license from HGSI, would represent the first new lupus drug in more than 50 years - a potentially big step forward for the treatment of a disease that is life-altering (and life-threatening) but still not well-understood by doctors or scientists. (For more, see Measuring The Medicine Makers.)

A More Compassionate Panel? 
Benlysta's progress toward approval was not smooth or worry-free for HGSI investors. The FDA spooked the market a bit a few days ago when the agency released its pre-panel meeting assessment of the lupus drug candidate. Although these reviews are supposed to be tough, critical, and generally negative, it did focus on what it called "mild" efficacy and the fact that the drug does not seem to benefit African Americans much at all.

Nevertheless, the panel seemed to acknowledge that mild efficacy is still efficacy and that the impact of the drug varied with each patient. In other words, it may be significantly effective for some patients, and the side-effects did not outweigh that potential benefit.

 

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http://stocks.investopedia.com/stock-analysis/2010/Human-Genome-Takes-A-Big-Step-Forward-HGSI-GSK-BIIB-IMMU-EBS-CEPH-RHHBY1117.aspx

Sanofi Has To Do Something

The problems facing French drug giant Sanofi-Aventis (NYSE:SNY) these days are nothing out of the ordinary for the big-cap pharmaceutical sector. The company is facing some major generics competition and has very little in the way of potential blockbusters to immediately replace that revenue. On top of that, Wall Street's growth addiction has left the shares languishing.

The question now, though, is what Sanofi's management is going to do about it. Whatever decisions they make are going to have a tremendous influence on whether shareholders can wait patiently for this stock to recover.


To read the full piece:
http://stocks.investopedia.com/stock-analysis/2010/Sanofi-Has-To-Do-Something-SNY-GENZ-SHPGY-ISIS-GILD-BIIB-HGSI0730.aspx

Time For Gilead To Open Its Wallet

When you see a person or company referred to as a "one-trick pony", it is supposed to be an insult, or at least a serious criticism. But what if that one trick is really, really good?

That is the dilemma for investors considering adding shares of Gilead Sciences (Nasdaq: GILD) to their portfolios. Gilead has one of the best HIV portfolios in the world, and that contributes about 77% of the company's revenue. But can this company continue to grow and attract institutional investors with just one stellar business?

Not Too Many Comparables 
If you look around at the large-cap biotech companies and pharmaceutical companies that are Gilead's most logical peers, you notice something important - none of those other companies are quite as dependent on a single disease. Amgen built itself with a focus on hematology, but it has since expanded into cancer, osteoporosis and inflammatory disease. Genzyme has a broad focus on rare diseases, Biogen Idec is diversified across several categories, and though Celgene is focused keenly on cancer, different types of cancer are often treated like completely different diseases.

For the complete piece, please go to:
http://stocks.investopedia.com/stock-analysis/2010/Time-For-Gilead-To-Open-Its-Wallet-GILD-VRUS-HGSI-SGEN-INCY-ALXN-TRGT0706.aspx

Sanofi's Going Shopping?

According to a rumor posted on Bloomberg, Sanofi-aventis (NYSE: SNY) is supposedly closing in on a "major" acquisition in the U.S. Equally supposedly, the talks are in early stages, so plenty could go wrong.

It certainly has the ring of truth, though. Since coming into the top spot, Sanofi's CEO has led the company to 25 acquisitions costing $17 billion (also according to Bloomberg). That's pretty good work for two year's time. Most of those deals were small, though, and added drugs to the pipeline with a long march towards approval. Because of that, the company is still facing some pretty serious revenue hits from upcoming generic competition.

So, even though it's still an early-stage rumor, why not play around with who Sanofi might buy?

First, I'm going to put a range of $20B - $50B on the most Sanofi might be willing to pay.

At that level, Bristol-Myers Squibb (NYSE: BMY) and Lilly (NYSE: LLY) could both be doable, though with little premium. Bristol, though it has an interesting oncology portfolio, has the same problem as Sanofi as the companies are partnered on drugs about to go generic. Likewise, Lilly could see up to 40% of its sales go to generics between now and 2013.

Gilead (Nasdaq: GILD) would give the company a great franchise in HIV/AIDS and an okay pipeline outside of virology (mostly cardiopulmonary). Genzyme (Nasdaq: GENZ) would not make much sense as I don't think Sanofi wants to focus on rare disease. Biogen Idec (Nasdaq: BIIB) is definitely interesting. The company has a strong MS franchise and a good cancer drug, as well as a pretty good collection of Phase 3 candidates and an irritating activist investor (Icahn).

Below that level, you're looking at names like Human Genome Sciences (Nasdaq: HGSI), Amylin (Nasdaq: AMLN), and Incyte (Nasdaq: INCY). HGSI and Amylin would cost less than $10B, and Incyte probably less than $4B. All three have a lot going for them, with interesting drugs very close to the market, but are they big enough? Maybe ... Human Genome has great technology and a good cancer pipeline, and Amylin would definitely expand the company's diabetes business. Incyte, likewise, has a great portfolio and would give Sanofi a host of options, though minimal revenue contribution.

So... my guess(es)? I think Biogen, and Amylin are the best bets. Gilead makes a lot of sense, but a take-out of Gilead would probably cost more than Sanofi wants to spend.

Disclosure - I own shares of Amylin.