Biotech's Hot Season: Get Ready

BOSTON -- I'm ready for summer to be over. It hasn't been a particularly restful period, not with credit crunches fueling crazy market volatility. The biotech sector -- my little corner of Wall Street -- has held up OK, but the summer months don't generate much news or investor interest.

I've circled Sept. 4 on my calendar, the day after Labor Day, as the day when investors get back to work and make the big push to the end of the year. Fall is a peppy time for biotech stocks, too. The summer doldrums fade in a flurry of investor conferences, medical meetings and stock-moving catalysts.

I want to be prepared for the fall rush, and I want you to be ready too. Below, I've gathered together all the information (lists of clinical trials, FDA decision dates, medical conference calendars) that, hopefully, gets you out of summer sloth mode and puts your brain back in gear.

I'll dig deeper into much of this in the coming weeks, but for now, let's start with an overview.

Back in June, I did some number-crunching to illustrate how biotech stocks tend to underperform in the summer (and consequently, why it's a good time to pick up quality stocks on sale.)

A similar analysis shows the biotech sector perks up in the fall. Once again, I tracked the performance of the Nasdaq Biotechnology Index during the Sept. 1-to-Nov. 30 time period.

In five of the last six years, the index rose during this three-month period. In the up years, the average rise was 9%. The year 2002 was a bit of an outlier, with a 21% jump. Excluding 2002, the index rose by an average of 5.5%.

(I also looked at the Sept. 1-Dec. 31 period for the past six years, and the results were essentially equivalent.)

One of the simplest explanations for why biotech stocks rise after summer is that investors are back from vacation and eager to put money to work. Investment banks, of course, are happy to facilitate by holding investment conferences.

A Fall Rebirth? Peformance of the Nasdaq Biotechnology Index (NBI)
Year	Sept. 1 to Nov. 30	Sept. 1 to high of period	Did 52-week high occur during this period?	NBI outperform S&P?
2006	9%	11%	No	Yes
2005	1%	4%	Yes	No
2004	4%	7%	No	No
2003	-6%	8%	Yes	No
2002	21%	22%	No	Yes
2001	8%	9%	No	Yes

The fall investment conference season kicks off in September, and while there are many venues for investors to check out biotech companies, I'll highlight three that tend to generate a lot of interest:

On Sept. 6, the industry trade magazine BioCentury and Thomson co-sponsor a one-day meet-up in New York called Newsmakers in the Biotech Industry. The next week, Sept. 10-11, Bear Stearns holds its annual fall health care conference. Lastly, UBS sponsors a large, four-day life-sciences investor conference Sept. 24-27.

If you're wondering where the management team of your favorite biotech firm is spending the month of September, the best bet is in New York.

Follow the FDA

I'm constantly stressing the importance of the calendar to biotech investors. To make money in this sector, you need to stay on top of when the FDA is expected to issue an approval decision, or in what time frame a biotech firm may release results from an important clinical trial.

Unfortunately, gathering this information isn't easy because there isn't a readily accessible data source that tracks it all. This is where I come in, I've tried to do much of the work for you.

Here's a handy calendar listing all the expected FDA drug approval decisions for the next few months:

FDA Decision Date	Company	Drug	Indication
8/30/2007	Tercica	Somatuline Autogel	Acromegaly
9/6/2007	Omrix Pharmaceuticals	Thrombin	Hemostasis
10/7/2007	Theravance	Telavancin	Skin and Skin-Structure Infections
10/15/2007	Elan/Biogen Idec	Tysabri	Crohn's Disease
10/18/2007	Cardiome Pharma	Vernakalant hydrochloride (iv)	Dysrhythmia (Arrhythmia)
10/20/2007	Pfizer	Lyrica	Fibromyalgia
10/21/2007	Genzyme	Renvela	End-Stage Renal Disease (ESRD)
11/1/2007	Forest Laboratories	Nebivolol	Hypertension (Systemic)
11/18/2007	Basilea Pharmaceutica	Ceftobiprole	Skin and Skin-Structure Infections
11/24/2007	BioMarin Pharmaceutical	Kuvan	Phenylketonuria (PKU)
12/12/2007	Neurocrine BioSciences	Indiplon capsules	Insomnia
12/27/2007	Onyx Pharmaceuticals	Nexavar	Liver cancer
12/31/2007	Pharmacyclics	Xcytrin	Brain Cancer (secondary; metastases)
1/17/2008	ZymoGenetics	rThrombin	Hemostasis

Keeping track of reporting times for clinical trials isn't as easy. Biotech companies rarely disclose the exact date on which data will be released, mainly because they don't know. The following list compiles biotech companies with ongoing phase II and phase III clinical trials that should have data ready for release before the end of the year.

Phase II and III trial data expected 2H 2007
Company	Drug	Indication	Results expected
Advanced Life Sciences	Cethromycin	Community Acquired Pneumonia (CAP)	Q3 2007
Arena Pharmaceuticals	Lorcaserin	obesity	Q4 2007
BioCryst Pharmaceutical	Peramivir	acute influenza	Q3 2007
BioDelivery Sciences International	BEMA Fentanyl	Pain Indications	2H 2007
Cardiome	oral Vernakalant	Arrhythmia	Q4 2007
Exelixis	XL880, XL647	cancer	Q4 2007
Exelixis	XL784	diabetic nephropathy	Q4 2007
Favrille	FavId	Non-Hodgkin's Lymphoma (NHL)	Q4 2007
GTx	Acapodene	Prostate Cancer	Q1 2008
GTx	Acapodene	Prostatic Intraepithelial Neoplasia (PIN)	Q4 2007-Q1 2008
Introgen Therapeutics	Advexin	Head and Neck Cancer	2H 2007
Lev Pharmaceuticals	C1-INH-nanofiltered	Hereditary angioedema (HAE)	2H 2007
Ligand Pharmaceuticals	Oporia	Osteoporosis / Osteopenia	2H 2007
Medarex (with Bristol-Myers Squibb)	Ipilimumab	Melanoma	2H 2007
Neurochem	Alzhemed	Alzheimer's Disease (AD)	2H 2007
NPS Pharmaceuticals	Teduglutide	Short Bowel Syndrome (SBS)	2H 2007
Pain Therapeutics	Remoxy	Pain Indications	2H 2007
Progenics Pharmaceuticals	Methylnaltrexone IV	Postoperative Ileus	2H 2007
Sonus Pharmaceuticals	TOCOSOL Paclitaxel	Breast Cancer	Q3 2007
SuperGen	Dacogen	Acute Myelogenous Leukemia (AML)	2H 2007
United Therapeutics	Inhaled Remodulin	Pulmonary Arterial Hypertension	Nov. 2007
Vertex Pharmaceuticals	Telaprevir	Hepatitis C	Nov. 2007

There are a lot of drugs and trials on this list with the potential to really move stocks. I've written about the importance of the coming telaprevir data to Vertex Pharmaceuticals(VRTX Quote) here.