Antibody Diabetes Treatment That Targets IL-1, Nexus For Major Cytokine Inflammatory Cascades, Moving Into Phase II Trials For XOMA

• On 7:17 am EDT, Tuesday October 20, 2009

67 WALL STREET, New York - October 20, 2009 - The Wall Street Transcript has just published its Biotechnology Report offering a timely review of the sector to serious investors and industry executives. This 70 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Trend Toward Orphan Disease Drug Development - Generic Drug Competition - Current Length Of FDA Approval Process - Ownership Ego Preventing Shareholder Returns - IPO And Secondary Offering Window Opening - Big Pharma R&D Pipeline - Decreased Clinical Development Risk - Impact Of Health Care Reform - Convergence Of Large-Cap Biotech And Pharmaceutical Companies - Easier Credit For Small Cap Biotech Companies - Developments In Cancer Chemotherapeutics - Gene Delivery Technology

Companies include: ADVENTRX (ANX); Abbott Labs (ABT); Advaxis (ADVX); Amedisys (AMED); Amgen (AMGN); Amylin Pharmaceuticals (AMLN); Antares Pharma (AIS); BioDelivery Sciences (BDSI); Biogen Idec (BIIB); Biomarin (BMRN); Boston Scientific (BSX); Bristol Myers (BMY); CVS Caremark (CVS); Celgene (CELG); Cerner (CRN); Cerus (CERS); Coke (KO); CombiMatrix (CBMX); Coventry Health Care (CVH); DARA (DARA); Eisai (ESALY); Eli Lilly (LLY); GenVec (GNVC); Gilead (GILD); GlaxoSmithKline (GSK); Health Management Associates (HMA); Human Genome Sciences (HGSI); Inspire Pharmaceuticals (ISPH); Intellect Neurosciences (ILNS.OB); InterMune (ITMN); International Stem Cell (ISCO.OB); Javelin Pharmaceuticals (JAV); Johnson & Johnson (JNJ); Keryx Biopharmaceuticals (KERX); Kraft (KFT); MAP Pharmaceuticals (MAPP); Medco (MHS); Merck (MRK); Merit Medical (MMSI); Novartis (NVS); Novelos (NVLT.OB); Novo Nordisk (NVO); Nutrisystem (NTRI); OSI Pharmaceutical (OSIP); Orexigen (OREX); Pepsi (PEP); Pfizer (PFE); Rite Aid (RAD); Schering-Plough (SGP); Takeda (TKPHF); Teva Pharmaceuticals (TEVA); Viropro (VPRO.PK); Walgreens (WAG); Wyeth (WYE); XOMA (XOMA); ZIOPHARM (ZIOP).

In the following brief excerpt from just one of the 17 in depth interviews in the 70 page report, an industry expert discusses the outlook for the sector and for investors.

MATTHEW L. KAPLAN is Managing Director, Health Care Group - Equity Research at Ladenburg Thalmann. He focuses on therapeutic companies, cardiovascular and drug delivery. Mr. Kaplan spent 13 years as a Biotechnology Analyst at PZ & Co., Evolution Capital and The Carson Group. He has six years of research experience with the Albert Einstein College of Medicine/Montefiore Hospital Department of Cardiology and is co-author of numerous articles on gene regulation in the heart. Mr. Kaplan has a B.S. in biology from the University of Michigan.

TWST: How is this sector going to evolve over the next five years?

Mr. Kaplan: That's a good question. I think there is going to be innovation. I think you're going to have more companies that are going to be acquired by Big Pharma. Big Pharma, if you look at 2011, 2012, 2013 and 2014, in that time frame there are significant revenue cliffs for Big Pharma products which are dominant products on the market. One good example is Pfizer, where their largest product, called Lipitor, does about $12 billion of revenues a year. And that product's patent expires, I think, in late 2011, which will allow generics to enter the market. They have to find ways to replace those revenues, and if they are going to be successful in doing that, they must access additional products for the pipeline. So I see an acceleration of acquisitions of products and companies by Big Pharma to fill those revenue gaps. You're going to continue to see innovation coming from the biotech sector. Consequently, I think it's actually a great area for investment and opportunity. With the trends and everything we are seeing, including the potential for health care reform, which I think ultimately it's going to be positive for the pharmaceutical industry - having more patients enrolled in insurance plans that are giving them access to these medicines - the reality is the government is looking for ways to decrease health care costs. One of the largest cost components in health care are the hospital-associated costs. One way to cut costs is to keep patients out of the hospital. I believe efforts to reduce hospital admissions will increase the utilization of pharmaceuticals in combination with preventive care.

TWST: What are some of your interesting picks right now?

Mr. Kaplan: Some of the earlier-stage companies which we're looking at have exposure to some of the biologics movement. One of the companies we follow is called Antares Pharma (AIS). They have an injectable technology platform that's very interesting. They've got a number of partnered projects with a company called Teva Pharmaceuticals (TEVA). Their first product was approved just a few months ago, it's a new injectable platform for growth hormone, and they have several other projects that are in development with Teva as well, which could potentially see additional approvals next year. That's one of the companies that we're looking at. Another company that we like is another company called BioDelivery Sciences (BDSI). Their lead product was recently approved, it's a drug called Onsolis, which we think is a best-in-class formulation of fentanyl for the treatment of breakthrough cancer pain. They've got a strong partnership with a company called Meda, who is marketing it essentially worldwide for them. BioDelivery has a technology platform for the delivery of drugs mucosally, and their next product is in Phase II development with data expected by the end of 2009, and it's a new formulation of buprenorphine for the treatment of pain. But we think that's a much larger product opportunity for the company and is un-partnered as of yet. In terms of novel new products in development, another company we like a lot is called Keryx Biopharmaceuticals (KERX). They have a few products on the verge of entering Phase III development later on this year and early next year. One product is something called an Akt-inhibitor for the treatment of a number of different cancers, but multiple myeloma and colorectal cancer are two of the areas they're potentially moving into Phase III development with, and it's a novel small molecule. They also have a novel phosphate binder for the treatment of patients with end-stage renal disease - that product is on the verge of entering Phase III development as well. It's a product called Zerenex, and that one's also a very interesting opportunity. There is also a company called XOMA (XOMA), they have an antibody development platform. Their lead product is an antibody that targets IL-1, which is at the nexus for major cytokine inflammatory cascades, and they're developing it for the treatment of type 2 diabetes. And also the data we've seen so far, it looks like it could be a very interesting product potentially for cardiovascular disease as well. That product is on the verge of moving into larger Phase II trials, and it's un-partnered yet. But we expect a large partnership potentially later on in 2009 that could be a major catalyst for the stock. Those are a few of the companies that we follow. We also follow companies such as Javelin Pharmaceuticals (JAV) who have a new formulation of diclofenac called Dyloject that successfully completed two Phase III trials in the U.S. and is on the verge of being filed for approval, having their NDA filed shortly. Another company called Micromet, MITI is the ticker. They are developing novel BiTE antibodies, but really it's kind of immunostimulatory antibodies for treatment of a broad range of cancers, specifically haematological cancers. And they're also doing some solid tumor stuff as well, but that's a very novel innovative technology that is out there. That's a quick cross section.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 70 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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