| Vical Incorporated Q1 2010 Earnings Call Transcript Vical Incorporated (VICL)Q1 2010 Earnings Call TranscriptMay 6, 2010 12:00 pm ETComplete Story » seekingalpha.com |
Taking Jargon Out of Doctor Visits Officials are pushing for medical providers to simplify the language they use to communicate with the public, in a move to improve patient outcomes and reduce costs. online.wsj.com |
Big Biotech: End of an Era Jason Chew submits: In their heyday, big biotech companies rivaled some Big Pharma companies in market capitalization and epitomized innovation in pharmaceutical development. At the time of its acquistion by Roche (RHHBY.PK), Genentech (DNA) was valued at $106 billion. Amgen (AMGN) at one time reached a valuation of over $100 billion, Gilead (GILD) over $50 billion. Excluding Genentech, the top five biotechs- Amgen, Gilead, Celgene (CELG), Genzyme (GENZ), and Biogen Idec (BIIB) have now lost a combined $89 billion in market value from their peak, about 40% of their value. Each of these top biotechs were founded in the 1970s and 1980s, bringing life-changing innovations with them. Their technologies revolutionized healthcare. Once the backwaters of drug development, Genentech built its empire by developing novel cancer therapies; Amgen saw the benefits of cloned EPO, and buit an entire franchise around it; Gilead designed effective and convenient combination anti-viral pills, overtaking all others in the HIV market. These companies were driven by legends in the biotechnology field: Art Levinson, George Rathman, John Martin. A confluence of factors has led to the slow decline of these big biotechs (Genentech is an exception.) The very thing that has driven growth for these biotechs has now become a reason for their drag. Their focus on targeted niches has made each a dominant player in their categories. For instance, Celgene is a leader in multiple myeloma, Genzyme in enzyme replacement therapy, and Biogen Idec in multiple sclerosis. This has given the companies pricing power and allowed for very high margins. With patent expirations looming, investors began to focus on the companies’ product pipelines and realized they were quite empty; years of pouring money on internal research projects has come up dry. Big biotech was in the same predicament as Big Pharma- sales of blockbusters are slowing but there isn’t anything to replace them. On top of that, the companies are facing pricing pressure from government regulation both in the EU and the US. Until last year, Genzyme was looking like the company that would succeed beyond its core enzyme replacement therapies. Although that segment made up about half its sales, its oncology unit was growing well, as was biosurgery. Then in June 2009, a bacterial contamination forced it to cease production of its two leading drugs Cerezyme and Fabrazyme at its main plant. With continued problems, its stock price was cut to a low of $45 in May from its $80 peak. Wounded, Sanofi-Aventis (SNY) approached Genzyme with an informal takeover offer on July 23, instantly putting the company in play. [[GSK]] is said to be interested as well. According to Bloomberg, Genzyme may command a price of $80 per share, a 48% premium to its closing price the day before reports of Sanofi’s interests surfaced. Genzyme’s peers, Amgen, Gilead, Celgene, and Biogen Idec are often the subject of takeover speculation, though even with their now reduced market caps, perhaps only Biogen isn’t so large as to cause indigestion. What happens then as the big biotechs are picked off by Big Pharma or join their ranks as slow growing behemoths? It appears there may be a second generation of biotechs waiting in the wings, on the cusp of greatness. As it so happens, this generation is the 1980s and 1990s set: Vertex (VRTX), Human Genome Sciences (HGSI), Dendreon (DNDN), Alexion, (ALXN) Amylin (AMLN), BioMarin (BMRN). The dynamic biotech industry has produced another batch of companies, each with innovative, life-changing technologies. Let's see if they succeed.Disclosure: Long ALXN, GENZComplete Story » seekingalpha.com |
Crucell Deal Will Expand J&J’s Position in Growing Vaccine Market: Biotech's Latest M&A Activity The Burrill Report submits: By Marie DaghlianJohnson & Johnson (JNJ) and Crucell (CRXL) are in advanced negotiations for the pharmaceutical giant to make a public offer for all outstanding shares of the Dutch vaccine maker. The potential deal is valued at $2.3 billion (€1.75 billion), which represents a purchase price of €25.75 per share, a 58 percent premium over Crucell’s closing price on September 16. Complete Story » seekingalpha.com |
Hostile Could Become the Name of the Biotech Game The Burrill Report submits: By Marie DaghlianThis may become the year of the hostile takeover. First it was Astellas (ALPMF.PK) going after Osi Pharmaceuticals (OSIS). Now Sanofi-Aventis (SNY) has gone hostile in its pursuit of Genzyme (GENZ) -- but it has yet to sweeten its offer. After Genzyme rejected its unsolicited $18.5 billion offer, the French pharmaceutical went hostile in early October but kept to its original offer—one that is likely to be rejected again. Complete Story » seekingalpha.com |