Neurogenic Orthostatic Hypotension Treatment Should Pass Phase III Trials: Catalyst For Biotech Stock Says Wedbush Morgan Analyst

• On 12:03 pm 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.

Dr. Liana Moussatos, Ph.D., Vice President, Equity Research, Emerging Pharmaceuticals, joined Wedbush Morgan Securities, Inc., from Pacific Growth Equities, where she was a Senior Research Analyst. Prior to that she came from UBS Global Asset Management, where she was Director and Portfolio Manager of the UBS Global Biotech Funds for about five years. Previously, Dr. Moussatos was with Bristol-Myers Squibb, where she was a Manager in University and Government Licensing, External Science and Technology, and she also worked with Sloan-Kettering Cancer Institute in the Office of Industrial Affairs and the National Cancer Institute in the Office of Technology Development. Dr. Moussatos received her B.S. in Entomology, and her M.S. in zoology and biochemistry from Clemson University. She received her Ph.D. in plant pathology from the University of California, Davis, and completed a postdoctoral research fellowship in cellular and molecular physiology at the Yale School of Medicine.

TWST: Within the companies that you watch, what companies do you like right now?

Dr. Moussatos: Right now I've put one of my companies on the Wedbush Best Ideas List, and it's called Chelsea Therapeutics, the ticker is CHTP. I have an outperform rating and $9 fair value, and it's trading between $2 and $3. The reason I have it outperform is they have guided to releasing the data from their first Phase III trial on a drug that treats a certain kind of low blood pressure condition called neurogenic orthostatic hypotension, or NOH. And that data is due at the end of this quarter, and so it's a near-term major catalyst for this company. The way the trial was designed, they enriched for patients who had the highest response to the drug. And also the drug has already been approved in Japan for over 10 years for the same condition. So we know the drug works. I'm pretty comfortable that this Phase III trial is going to be positive. My fair value is $9. I think the stock is going to go to $9-10 by the end of the quarter. So it's pretty big uptick. I'm pretty comfortable that this drug is going to work in this trial. That's my top pick. As I said before, Phase III is a major catalyst for a company. I had one that is an example of this. In fact, it's an example both ways - when a trial fails in Phase III and a trial works in Phase III, and what can happen to the stock - and that's MAP Pharmaceuticals (MAPP). Beginning of the year, they had two Phase III programs. One was for asthma in children and one was for migraine. The asthma in children came out in February. Most people thought it was going to work because the Phase II data was good and worked, but it didn't, and so the stock crashed. Then people were afraid that the same thing was going to happen with the migraine because you never know. But in May the migraine worked. And so the stock crashed in February and just kind of hung out at really low levels, and then the migraine came out and the stock worked in May. It was pretty dramatic. They announced a pretty good bit of data back in May, but they kind of filled out the clinical pipeline with more sub-analyses. And at the American Headache Society meeting in Philadelphia in September, I believe the data shows that this is a great migraine drug and the overall profile is better than any migraine drug that I've seen. There are cheap generics on the market now, and they will always be used frontline because they are standard of care. But for patients who are underserved by the standard of care, this is going to be a great alternative for them. So I like MAPP for that, and it's a good example of the stock impact when a Phase III fails and when a Phase II works.

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 .

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