Biotech Notebook: Hythiam, Shire, Genentech

I've been around the biotech block a long time, but I've never heard anything as offensive as a study investigator touting the stock of a drug company on an investor conference call. But heck, maybe he's on to something. Perhaps we could see the day when drug dealers peddle Hythiam stock on street corners instead of meth and crack?

Hythiam's third-quarter call wasn't much better. Prometa sales in the quarter totaled just $1.66 million. (The company doesn't actually disclose that figure, forcing investors to do the math for themselves.)

Hythiam, of course, is losing money -- $13.8 million in the third quarter and $38.8 million in the first nine months of the year. Because Hythiam can't convince insurance companies to pay for Prometa, the company must spend money to open its own treatment centers, essentially "buying" revenue at a loss. That help explains why, with the stock hit hard after the release of the clinical trial results, Hythiam still issued more stock to raise another $46 million.

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Back in March, I wrote about U.K.-based Shire Pharmaceuticals(SHPGY Quote) and its efforts to get doctors and kids suffering from attention deficit and hyperactivity disorder to switch from its old Adderall XR product (going generic in 2009) to the company's brand-new drug Vyvanse.

In a perfect world, I wrote, there wouldn't be much demand for a switch, since Adderall XR is as good, or better, than Vyvanse, in many ways. But since Shire controls both drugs and is a marketing juggernaut in the ADHD world, the company would find any number of ways to get docs and patients to make the switch.