Seeking Alpha: Targacept Looking Like A Dead End

Development-stage biotech Targacept (TRGT) may have once had a bright future and a nearly $30 share price, but those days are long past. With yet another clinical disappointment, it seems fair to ask whether Targacept's entire research direction is fundamentally flawed and whether the company can use the capital it has left to find a new path … or if shareholders would be better served by the company simply closing up shop and returning the cash.

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Targacept Looking Like A Dead End

Seeking Alpha: Is "Worthless" Really A Fair Assessment Of Targacept?

It's not often that you find companies trading at a negative enterprise value and/or less than cash on hand, so it caught my eye recently that Targacept (Nasdaq: TRGT) had fallen so far. Although investors have definitely had to weather some major disappointments here and the true value of the company's neuronal nicotinic receptor technology is very much in doubt, it's not often that the normally too-optimistic world of biotech says that a company would be better off shutting off the lights and passing out the cash.

The Bad News, In Brief
The failure of Targacept's TC-5214 got plenty of attention in late 2011; earlier studies had been quite encouraging and there was optimism that Targacept and partner AstraZeneca (NYSE: AZN) had a potential blockbuster on their hands with a very new approach to treating major depression. In marked contrast to earlier studies (including a Phase 2b study run in India), the pivotal REN 2 and REN 3 studies failed to show a clinical benefit.

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Is 'Worthless' Really A Fair Assessment Of Targacept?

Seeking Alpha: Cubist Fills Its Sales Bag And Pipeline With Adolor

Stuck in a trading range for about five years, Cubist Pharmaceuticals (CBST) has had a pretty good year in 2011. The company resolved a patent dispute with Teva Pharmaceuticals (TEVA) on reasonably good terms, got some patent extensions that should further boost its profit potential on Cubicin, and struck marketing deals with Optimer (OPTR) and AstraZeneca (AZN) to make better use of its own sales force. But that's not all that's working in Cubist's favor recently. The company's pipeline has also come along nicely, as the Calixa deal has delivered two promising compounds, one of which is now in late-stage studies.

That said, it has not been all sweetness and light for Cubist. Investors have been troubled by this company's heavy reliance on Cubicin and the inevitable declines that are coming in operating income, to say nothing of the inefficiencies of operating a salesforce with few compounds to sell. Investors have been waiting for Cubist to do a deal or two and now management has done just that – giving the company an additional product to sell and also adding some clinical compounds outside of its core anti-infective space.

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Cubist Fills Its Sales Bag And Pipeline With Adolor

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.

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