17
miracles derived from the genome
project. Instead, we see the informa-
tion catalytically changing research
around the world with the hope of
changing the basic research para-
digm. By knowing all of the human
genes for the first time in history, ge-
nomic companies will be able to truly
do something about diseases like can-
cer.
It is already starting to happen in
terms of leading the pharmaceutical
companies to develop new therapeu-
tics. Millennium Pharmaceuticals
(MLNM) and Human Genome Sci-
ences (HGSI) in particular are trying
to move proprietary compounds de-
rived from sequencing of the genome
to market based on the strength of
their underlying R&D. Human Ge-
nome Sciences has three products cur-
rently in the clinic and a number of
potential clinical candidates behind
that. They've just hired Dave Stump
from Genentech (DNA), who was re-
sponsible for a number of Genentech's
clinical development programs. And
Millennium recently completed the
acquisition of a biotech company
called Leukosite (LKST). Leukosite
will have an antibody product for can-
cer on the market by the middle of
next year. This is a forward-
integration move that Millennium is
making in order to have the necessary
infrastructure to take its massive R&D
efforts and channel it through the
FDA process and into the market-
place.
BTN believes 2000 will continue
the uptick in stock prices and start a
maturation process for the industry.
This sector may move to a point
where there are a lot more drugs and
investors can start focusing not on one
or two drugs but actually on an indus-
try, an industry that has a lot of drugs.
Biotech sector will deliver in the fu-
ture.
#####
BioTech Sage Report, January 2000
immune modulator. The blinded
phase II trial, showed that Amevive
on about 23 percent of moderate - to -
severe patients reached a stage of al-
most clear or clear. A key issue that
demonstrated that the drug met safety
standards. As a result, the drug has
entered Phase III clinical trials and
targeting a drug introduction in 2002.
In addition, Adentri, a treatment
for congestive heart failure ("CHF"),
has completed enrollment for Phase
II, and data is expected to be available
in early 2000. The study is a head-to-
head trial comparing Adentri to La-
six, the most commonly used diuretic
for CHF.
BTN expects the company to be
under pressure in regards to its prod-
uct pipeline and would recommend
buying on stock weakness. The key
near-term valuation driver of Biogen
remains sales of Avonex. We expect
strong sales of Avonex, potential roy-
alty upside on Intron A, from the
Schering-Plough arbitration that is
expected to be resolved in January
2000 and enhanced visibility on
Amevive for severe psoriasis as its
progresses.
#####
Biogen Inc.
Continued from page 9, column 3
Abgenix Inc.
Continued from page 11, column 3
through the collaboration.
Valuation
Antibody-based drugs are boom-
ing, with sales of many new products
vastly exceeding expectations such as
Centocor's ReoPro, Genentech's Her-
ceptin, MedImmune's Synagis, and
IDEC's Rituxan among others. About
250+ companies have more than 200
antibody products under development.
Estimates for several antibody prod-
ucts have been increased to reflect
better-than-expected market penetra-
tion. Further upward revisions are
possible, as current products continue
to exceed estimates and new products
advance toward the market. In our
view, the multi-billion dollar potential
of antibodies is just beginning to be
realized, both by pharmaceutical/
biotech companies and by investors.
With its novel and broadly applicable
XenoMouse technology, Abgenix is
uniquely positioned to capitalize on
the antibody revolution.
BTN believes that Abgenix should
realize substantial revenues and prof-
its from the "antibody revolution" and
especially with the latest news that the
company is the sole owner of Xeno-
Mouse. XenoMouse technology pro-
vides a method of making human an-
tibody-based pharmaceutical products
more quickly and easily, with the po-
tential for chronic use, greater effi-
cacy and fewer side effects than exist-
ing product and other technologies.
Abgenix's proprietary XenoMouse
technology allows rapid generation of
high-quality, fully human antibodies
to virtually any target. In our view,
XenoMouse will continue to be highly
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