10
Investors' confidence is on the
rise.
A positive tone in the market has
helped stabilize the value of biotech
stocks. Hopefully, it's a turning point
for a continued upward trend. Looking
at the charts for the past couple of
months, you want the Biotech Nasdaq
Index (NASDAQ: NBI) to be able to
hold onto the 790 to 800 support level,
otherwise there is the potential to con-
solidate to the 720s level. It is very
difficult to judge the bottom, but it ap-
pears we've reached an inflection
point. Wall Street's sentiment is more
positive, combined with upcoming
spring medical and scientific confer-
ences that show what the biotechs
have to offer. We should see a rally in
the coming months. The biotechs have
been hit pretty hard, and there is
plenty of room to attract investors to
this sector.
On March 14, Amgen/NASDAQ:
AMGN (BSR #6: Rheumatoid Arthri-
tis), signed a multiyear agreement with
International Oncology Network (ION),
the nation's largest community-based
oncologist network to include Aranesp
as its preferred treatment for anemia
related to chronic renal failure, and
Neulasta and Neupogen as preferred
therapies for reducing the risk of che-
motherapy-induced neutropenia. Neu-
tropenia is fever associated with a se-
vere drop in infection-fighting white
blood cells. Amgen is primed for
strong growth.
On March 8, Serono's drug Rebif,
a competitor of Biogen's/NASDAQ:
BGEN (BSR #35: Psoriasis), Avonex,
gained FDA approval to treat multiple
sclerosis in the U.S. For Biogen, the
FDA's decision to approve Serono's
Rebif and overturn Avonex's "orphan
drug" status was a surprise to inves-
tors and analysts alike. But after re-
viewing the FDA's memorandum,
we're not dismayed anymore, as the
data from the head-to-head compari-
son supported Serono's earlier claim
that Rebif was more efficacious. How-
ever, don't be totally convinced that
Serono's drug is superior. We believe
the differences observed in the head-
to-head comparison trial were due to
the increased doStock of Rebif (132 ug
per week) that patients received versus
the amount that patients received of
Avonex (30 ug). The higher doStock of
Rebif was also associated with certain
adverse events occurring more fre-
quently than with Avonex, but the
FDA did not consider these to be sub-
stantial enough to hinder approval of
Rebif. Then on March 12, the FDA
informed Biogen that Rebif's labeling
does not enable Serono to make a gen-
eral claim for clinical superiority over
Avonex, and Rebif's approval specifi-
cally prohibits such claims.
So, where does this leave Biogen?
Obviously, the decision will impact
Biogen's bottomline, as Avonex is the
company's only product on the mar-
ket. However, we believe that Biogen's
other near-term products coming
through the pipeline will more than
make up for any lost revenues. Specifi-
cally, Biogen's new biological for mu l-
tiple sclerosis, Antegren, which Bio-
gen is developing with Elan; and the
company's biological for psoriasis,
Amevive. Biogen's share price is trad-
ing close to its 52-week low of about
$48. With the current setback, this rep-
resents a good opportunity to acquire
shares of Biogen.
March 11, Celgene's /NASDAQ:
CELG (BSR #39: Phase III Cancer)
scientists presented preclinical data on
the mechanisms and efficacy of novel
JNK (c-Jun N-terminal kinase) inhibi-
tors at a symposium. The data pre-
sented confirm the ability of JNK in-
hibitors to block tumor-cell prolifera-
tion in a wide variety of cancers, in-
cluding breast, prostate, pancreas, co-
lon and lung. The data further demo n-
strate that the combination of JNK in-
hibitors and chemotherapy enhances
the anti-tumor effects of both agents.
The mouse data looks promising and
allows Celgene to take the next steps,
moving into human trials.
On March 7, Celgene said that
after its discussion with the FDA, its
supplementary application to market
its Thalomid drug for use in multiple
myeloma patients would be delayed by
at least two years because researchers
must conduct an additional clinical
trial. Although Thalomid is currently
approved only to treat leprosy, the
bulk of its sales are generated from
cancer-related uses -- a phenomenon
known as "off-label" prescribing,
which doctors are permitted to do.
Thalomid is Celgene's top-selling prod-
uct.
The FDA suggested that a large
late-stage, or Phase III, trial would
strengthen Celgene's bid to treat multi-
ple myeloma with Thalomid. The com-
pany had previously hoped to support
a marketing application by relying on
its Phase II trial data as well as evi-
dence from cancer patients treated off-
label. Even though, the timeline for
Thalomid has changed, the need to
have an approved therapy for multi-
ple myeloma has not. In our view, the
BioTech Stock Report, April 2002
T his section is not only to update and in-
form our readers on the significant news of
those stocks that are in our BioPortfolio, but
to provide insight, market conditions that
will influence the biotech sector.
BioTech Stock Updates
