Biotech Mailbag: Bad CEOs Offer Lessons

Genentech appears very much committed to this partnership and has moved the drug into three ongoing or planned phase II studies in basal cell carcinoma, colon cancer and ovarian cancer. Data from these studies, however, isn't likely until the end of 2009 or early 2010.

We hear a lot of good things about the potential for the hedgehog pathway in cancer, but until there is a good amount of phase II data available, it's a tough story to sell to investors.

I'm having the same trouble with ImmunoGen (IMGN Quote), another Genentech cancer drug partner, which is a long pick in the Biotech Select model portfolio. ImmunoGen is in a better position because there is pivotal data from its drug possibly available in late 2009, but still, the stock hasn't moved higher as much as I'd like.

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Next up, an email from James W. asking about a small Amex-listed drug company called RegeneRx Biopharma (RGN Quote).

"I don't tend to be a big biotech guy, but I have been trading around with Regenerx Biopharma for about two years now. From a trading point of view, I'm OK. I got most of my current holding taken out at the open today for a nice gain. That said, between the gains I've made in it lately and the news flow on this, I feel like I'm getting a little too positive on the stock, so I wanted to see if you had a more experienced take on this."

Regenerx is developing various synthetic formulations of thymosin beta-4, a naturally occurring protein found in human cells that is believed to play a role in tissue regeneration. The company's pipeline is focused on wound healing (both skin and in the eye) and cardiovascular tissue repair.

James says he's done well trading the stock, but from a more fundamental basis, I'd want to see data from an ongoing randomized, placebo controlled study of one of these thymosin beta-4 drugs in patients with chronic pressure ulcers. RegeneRx says results from this study are expected before the end of the month.