This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Biotech Stock Mailbag: 2011 Report Card

BOSTON ( TheStreet) -- Welcome to the post-Thanksgiving, intra-Black Friday Biotech Stock Mailbag 2011 review and report card.

I totally called Pharmasset's (VRUS) acquisition last January. Unfortunately, none of the other five bio-pharma takeout predictions I made at the same time -- Amarin (AMRN), Seattle Genetics (SGEN), Onyx Pharmaceuticals (ONXX), Human Genome Sciences (HGSI) and Biomarin Pharmaceuticals (BMRN) -- came true. Maybe next year!

All joking aside, the Mailbag focused a lot on hepatitis C this year -- the biotech investment story of 2011 by a wide margin. In April, I called Pharmasset's remarkable stock run -- up 50% at that time to $78 per share -- justified and sustainable given the excitement around its oral Hep C drug candidates, most notably PSI-7977.

It's hard to believe now, but in April, Pharmasset's enterprise value was "only" $2.5 billion compared to Vertex Pharma's (VRTX - Get Report) $9 billion. Vertex's Hep C drug Incivek wasn't even approved until May but already there were concerns being raised that Vertex's reign as king of the Hep C mountain might be short lived.

In this Mailbag, published right after an important European liver disease research meeting, I tried to help readers parse the rapidly changing Hep C treatment landscape:

"It sounds incredibly weird to even conjure this thought, but from Wall Street's what-have-you-done-for-me-lately perspective, Vertex's telaprevir and Merck's boceprevir look a bit old in the tooth even before the two drugs are approved!"

Regarding Vertex, I wrote:

"Vertex's dilemma is that investors know this story well and have baked much of telaprevir's potential into the company's valuation already. What concerns investors today and perhaps even more post-EASL is that the slope of the expected telaprevir revenue tail may be steeper than previously appreciated. Investors are also raising questions about what Vertex is doing to sustain its Hep C franchise in 2015 and beyond when new drugs are expected to enter the market."

The Mailbag's crystal ball wasn't always so prescient. I predicted Orexigen Therapeutics (OREX - Get Report) would receive a "good" complete response letter from FDA for its obesity drug Contrave last January. "Good" meant FDA would not require Orexigen to conduct any pre-approval Contrave clinical studies.

Wrong. Not only did FDA reject Contrave, but the agency told Orexigen that the weight-loss drug wouldn't be approved until the company ran a 10,000 patient heart-safety study.

Advising reader Vince M. last February to be skeptical of micro-cap Radient Pharmaceuticals (RXPC) not only got the Hostile React-o-Meter spinning out of control, but was also the launching point for some of the most entertaining and hard-hitting reporting I published all year.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AVNR $16.96 0.00%
AMRN $1.83 0.00%
OREX $0.45 0.00%
SPPI $7.09 0.00%
VRTX $84.34 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs