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Biotechnology Sector in Focus

Deerfield Beach, FL / ACCESSWIRE / July 31, 2014 / One of the major concerns for big pharma is patent expirations. Patent expirations will result in a loss of $34 billion in revenue at big pharma companies this year. This was after pharma companies lost $55 billion and $28 billion in revenue in 2012 and 2013, respectively. In 2015, products worth $66 billion will see their patents expire.

Indeed, the outlook for big pharma is gloomy as they lose revenue due to patent expirations. The key for them will be to boost their product pipeline in order to offset the loss of revenue. While boosting research & development spending will help pharma companies in building a robust product pipeline, they will also need to look at acquisitions. There are several biotechnology companies that have either a blockbuster product or are developing one. These companies could help big pharma regain some of their lost revenue. Therefore, investors should keep an eye on the biotechnology sector.

Ruthigen Inc. (RTGN): Based in Santa Rosa, California, Ruthigen completed its IPO in March this year. While the company’s shares are down more than 30% since the IPO, the company has been making steady progress.

Ruthigen focuses on a market where there is a significant unmet need. The company is engaged in the discovery, development and commercialization of pharmaceutical-grade hypochlorous acid (HOCI)-based therapeutics designed to prevent and treat infection in invasive applications. Indeed, surgical site infections (SSI) are a major problem and cost the U.S. healthcare system billions of dollars. There is an urgent need to reduce SSIs and Ruthigen is looking to meet this need.

Back in May this year, Ruthigen submitted an Investigational New Drug (IND) application for clinical trial of RUT 58-60, which is the company’s lead product candidate. A broad spectrum anti-infective, RUT 58-60 is being developed for the prevention of infection in surgical and trauma procedure. In June, the company’s IND became effective, enabling it to start human clinical testing of RUT 58-60. The company began treating patients in its first clinical trials in July of this year.

Ruthigen’s recent IPO has provided it with sufficient funding to complete its Phase 1/2 clinical trial and fund its operations for around 18 months.

Tetraphase Pharmaceuticals Inc. (TTPH): Based in Watertown, Massachusetts, Tetraphase Pharmaceuticals is a clinical stage biopharmaceutical company. The company’s lead product candidate, eravacycline, a full synthetic tetracycline derivative is currently being developed as a broad-spectrum intravenous and oral antibiotic for use as a first-line empiric monotherapy for the treatment of multi-drug resistant infections.

Last month, the company announced the completion of patient enrollment in the lead-in portion of its IGNITE 2 clinical trial. The Phase 3 clinical trial is evaluating the safety and efficacy of IV and oral formulations of eravacycline for the treatment of complicated urinary tract infections (cUTI).

Tetraphase President and CEO Guy Macdonald said that because of its potential as an IV to oral transition therapy and its potential to be effective against a wide variety of bacterial pathogens, the company believes that eravacycline could play an important role in treating complicated urinary tract infections, in particular those caused by multidrug-resistant Gram-negative bacteria.
Investors certainly see significant potential in Tetraphase as the company’s shares have gained more than 40% in the past one year. However, year-to-date, the stock is down more than 19%, tracking losses in the wider biotechnology sector.

SIGA Technologies Inc. (SIGA): SIGA Technologies is another biotechnology stock that has fallen sharply this year. Year-to-date, the stock is down more than 17%. However, the stock had risen more than 25%.

SIGA Technologies is based in New York City. The company focuses on the development and commercialization of pharmaceutical solutions for some of the lethal disease-causing pathogens in the world, including smallpox, Ebola, dengue and Lassa fever. SIGA’s lead product candidate is tecovirimat, which is being developed for the treatment of smallpox.

SIGA has entered into a contract worth over $400 million with the Biomedical Advanced Research and Development Authority (BARDA) for the delivery of 2 million courses of tecovirimat to the Strategic National Stockpile.

Back in May, SIGA had reported its financial results for the first quarter of 2014. The company’s revenue for the quarter ended March 31, 2014 stood at $549,000, compared to $1.3 million reported for the same period in the previous year.

Synthetic Biologics Inc. (SYN): It has been a mixed year for Synthetic Biologics shares. The stock began 2014 on a sold note. However, since the start of the second quarter, it has come under pressure. As a result, shares of this Rockville, Maryland-based biotechnology company are now almost flat for the year.

Synthetic Biologics, which was previously known as Adeona Pharmaceuticals Inc., focuses on the development of synthetic DNA-based therapeutics and disease-modifying medicines for serious illnesses. The company is currently focusing on the development of an oral biologic to protect the gastrointestinal microflora from the effects of IV antibiotics for the prevention of C.diff infection, an oral treatment to lower the impact of methane producing organisms on conditions such as C-IBS, and a biologic targeted at the prevention and treatment of a root cause of a subset of IBS.

ImmunoCellular Therapeutics Ltd. (NYSEMKT:IMUC): ImmunoCellular Therapeutics is a Calabasas, California-based clinical-stage biotechnology company engaged in the development of immune-based therapies for the treatment of cancers.

IMUC’s lead product candidate is ICT-107, a dendritic cell-based vaccine targeting multiple tumor-associated antigens for glioblastoma multiforme (GBM), which is the most common and lethal type of brain cancer. The company’s product pipeline also includes ICT-121 and ICT-140.

Last month, IMUC presented updated ICT-107 Phase II data in patients with newly diagnosed GBM at the 2014 American Society for Clinical Oncology (ASCO) annual meeting in Chicago. IMUC CEO Andrew Gengos said that the pre-specified subgroup analyses in the company’s Phase II trial indicate the potential value of a targeted population approach going forward.
IMUC shares have had a disappointing year so far, gaining just a little under 3%. In the past year, the stock has fallen more than 56%.

Emerging Equities Report

Source: Emerging Equities Report