Welcome to the BiotechDueDiligence Crystal Ball - 2011 Edition
Conducting deep, in-depth research and due diligence can allow you to more accurately forecast upcoming events- this is far more effective than listening solely to management (who are nearly always overly bullish) or analysts (who can be misinformed, uninformed, or worse in some cases). Surprises can and will still happen, but the more knowledge you have on the company as a whole, the better you will be able to react to any news event. With the caveat that I unfortunately do not have an actual crystal ball (and will therefore be wrong sometimes!), here are my predictions for the year for the biotech companies I follow.
Antares Pharma (AIS) - click here for research page
- The good: Anturol is approved in December 2011 and AIS secures a women's health marketing partner with $5-10m upfront and 20-30% royalties
- The bad: No TEVA-partnered pipeline products will gain FDA generic approval in 2011
- The wildcard: I believe Libigel partnership or BPAX sale is a 2012 event, but this is obviously the largest potential catalyst for AIS in 2011
BioSante Pharma (BPAX) - click here for research page
- The good: Superb Libigel efficacy data will be announced late fall 2011 (I don't see any partnership before this event)
- The bad: I've already been proven right that the Libigel safety trial will require near or all of the 4000 maximum enrolled patients due to low CV event rate
- The wildcard: There really isn't one. There will not be any monetization of cancer vaccine programs in 2011, and any press release on these programs should be treated as a short-term trading opportunity with the caution that fundraising on any positive press release is always on the table with BPAX
Infinity Pharma (INFI) - click here for research page
- The good: Data presentations from IPI-926 hedgehog pathway inhibitor later in 2011 will be promising
- The bad: The long-awaited additional HSP90 inhibitor data for IPI-504 and IPI-493 proves what is clear: IPI-504 is too ineffective and toxic to compete with the likes of gantespib from Synta Pharma (click for details). The "update on the path forward for this program" will mean killing IPI-504 and maybe even IPI-493 too. According to their 2010 10k, INFI poured $87.5m down the drain on these molecules between 2006 and 2010.
- The wildcard: Maybe the bad news on HSP90 will come first and cause a suppressed valuation (currently EV<$60m) offering a buying opportunity.
Isis Pharma (ISIS) - click here for research page
- The good: Mipomersen US and EU filings will lead to approval in 2012
- The bad: I win again! ISIS officially announced on 4/13/11 that they have killed ISIS-113715 PTP1b inhibitor lead candidate
- The wildcard: Another broad deal like the GSK alliance is possible, but unlikely in 2011. ISIS has the cash to develop their drugs thru phase 2 now before partnering- they have a host of phase 1 and early phase 2 candidates that won't reach value inflection points in 2011. Regulus JV (own 45%) would be the most likely source for incremental positive, such as additional deals with big pharma or an IPO
Ligand (LGND) - click here for research page
- The good: A partnership for the SARM program will bring in $10-20m upfront in 2h2011. ONXX Carfilzomab newflow and milestone payments will bring new attention to LGND business model
- The bad: LGND's financial overreach with Cydex acquisition will hamper their operating ability on internal programs.
- The wildcard: Promacta phase 3 results in HCV to be presented by GSK late in 2011.
Synta Pharma (SNTA) - click here for research page
- The good: Asian deal for ganetespib will be signed by ye2011 on impressive terms. HSP90 inhibitors from competing companies continue to drop like flies
- The bad: Presumably, with the number of indications being explored, SNTA will present data from a trial in which gantespib has no benefit
- The wildcard: Partnership for earlier stage asset. Potential big move in stock on mid-year presentation of additional data from phase 2 ganetespib NSCLC data
Senomyx (SNMX) - click here for research page
- The good: A collaborator will formally select a bitter blocker for use in its products. Lead candidates for new sucrose or fructose enhancers will also be selected for pursuit of GRAS status.
- The bad: Pepsi will not introduce a product containing a SNMX ingredient in 2011- duh. This was never possible but a Pepsi comment late in 2010 led to a big spike in SNMX on the speculation. No news on advances in salt or natural sweeteners programs.
- The wildcard: A buyout has to always be considered as a possibility. Firmenich could do so at any time, but is too early for Pepsi as a possibility I would think.
Supergen (SUPG) - click here for research page
- The good: Astex merger will go through and provide the company with some decent candidates, milestones, and discovery capabilities. SG110 early clinical data will be impressive in late 2011 or early 2012.
- The bad: Eisai and JNJ will not receive marketing approval for Dacogen in elderly AML for US and EU, respectively. Amuvatinib will never advance to phase 2.
- The wildcard: Can Astex management and VC backers knock some sense into this company?