67 WALL STREET, New York - September 21, 2012 - The Wall Street Transcript has just published its Biotechnology and Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This special 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: Biotechnology and Pharmaceutical Valuations - Oncology Drug Development - Orphan Drugs - FDA Approval Process - Reimbursement Trends
Companies include: Celgene Corporation (CELG), Gilead Sciences Inc. (GILD), Regeneron Pharmaceuticals Inc. (REGN), Onyx Pharmaceuticals Inc. (ONXX), United Therapeutics Corp. (UTHR), Ariad Pharmaceuticals Inc. (ARIA), Synta Pharmaceuticals Corp. (SNTA), and many others.
In the following excerpt from the Biotechnology and Pharmaceuticals Report, an expert biotech analyst from BMO Capital Markets discusses the outlook for the sector for investors:
TWST: What are your top picks in biotech and pharmaceuticals?
Dr. Birchenough: So in the large-cap area, I think we'd highlight Gilead (GILD), which we think has several attractive opportunities. What we like about Gilead is the continued growth of their legacy franchise in HIV, and where we expect their dominance in HIV not just to continue, but to be expanded as they come forward with some very attractive life-extension products that we think can expand their opportunity further.
And beyond that, we think that they are in the leadership position in terms of the next big area of antiviral therapy, and that is hepatitis C, and we think that they have the best-in-class direct antiviral for hepatitis C in their drug GS-7977. And ultimately, we think that that will be a significant growth driver for the company over the next decade, and where we'll have Phase III data next year that we think will establish a substantial lead over other companies in the hepatitis C space.
Conceptually, when we look at the opportunity for Gilead in hepatitis C, it's a significant opportunity where there are 12 million patients in the U.S., Europe and Japan; where pricing for these direct antivirals are at roughly $50,000 per patient head, so you're looking at a $600 billion theoretical market opportunity, which won't impact entirely, but it really represents a significant opportunity for Gilead, and again, we think they're in the leadership position.
On the midcap side, our top pick right now is Onyx Pharmaceuticals (ONXX), and Onyx is one of the few companies that could emerge from 2012 with three separate drugs for cancer on the market.
And now, they've just got what could be a bigger drug in carfilzomib approved for myeloma, where we know that the myeloma market can support drugs that can do multiple billion dollars in sales, and we think carfilzomib is a best-in-class drug that's wholly owned by Onyx, and where it can drive substantial earnings.
Finally, they have a third drug called Regorafenib, which we think will get approved for colorectal cancer by year end, and that's a drug where they collect a very healthy royalty that will drop right to the bottom line. So overall, we think that Onyx has a rare combination of product diversification, commercial-stage opportunity and the prospects for sustained earnings growth that should attract investment.
Finally, on the small-cap area, a name that we're starting to talk more about is Synta Pharmaceuticals (SNTA). Synta is a development-stage company moving into Phase III with what's called an Hsp90 inhibitor, and Hsp90 is a chaperone, essentially a bodyguard, for key oncogenic proteins in cancer cells, and by targeting Hsp90, you could get different drivers of cancer growth in different tumor types. And this is a highly leverageable platform where Synta is studying the drug in 20 different trials and where we think they've got a best-in-class drug in this Hsp90 space. We expect significant data flow from the company over the next 12 months in breast cancer, melanoma and lung cancer. And they have the prospect to really move more broadly into all solid tumors as well as blood cancer. So we think Synta is a name over the next 12 months that will do very well.
For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers, and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Onyx Pharmaceuticals