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TheStreet Open House

10 Biotech Stock Predictions for 2012

Update: Please submit your own 2012 biotech stock predictions at the end of this story.

BOSTON ( TheStreet) -- Ten biotech predictions for 2012:

1. The Amgen (AMGN) strategy of returning cash to shareholders in form of share buybacks, Dutch tender offers and dividends is abandoned in favor of ramped up acquisitions i.e. Gilead Sciences (GILD) buying Pharmasset (VRUS). Large-cap biotech firms start acting like Big Pharma -- choosing to buy growth instead of seeking it from internal drug development.

2. After much wrangling, lawmakers pass important PDUFA V legislation but it's amended to prohibit FDA from issuing drug approval decisions on Friday evenings.

3. Cancer immunothera-flop: Phase III cancer "vaccine" studies being run by Merck KGaA and Oncothyreon (ONTY) (Stimuvax in non-small cell lung cancer) and Vical (VICL) (Allovectin in melanoma) both fail. The only positive clinical news in cancer immunotherapy in 2012 will come from GlaxoSmithKline (GSK) with its Mage-A3 therapy, in phase III for melanoma.

4. By the end of the year, one or more of these companies will be gobbled up in an M&A deal: Seattle Genetics (SGEN), Celgene (CELG), Biomarin Pharmaceuticals (BMRN), Amag Pharma (AMAG), Onyx Pharma (ONXX), Momenta Pharma (MNTA)

5. Cell Therapeutics (CTIC) exits 2012 the same way it started -- with pixantrone still not approved anywhere. The only changes at the company will be to its share count and executive compensation -- both higher; and stock price -- lower.

6. Roche (RHHBY) doesn't buy Aeterna Zentaris (AEZS) despite a half-dozen additional Seeking Alpha articles penned by "Jeremy Richards" claiming otherwise.

7. Leucovorin shortages end, so too does Spectrum Pharma's (SPPI) fairytale ride.

8. Vertex Pharma's (VTX) cystic fibrosis drug Kalydeco will be approved. More importantly, studies testing Kalydeco combined with other Vertex's cystic fibrosis drugs will show strong benefit in a larger swath of patients. Vertex becomes a cystic fibrosis company. Hepatitis C? What's that?

9. FDA rejects obesity drugs from Arena Pharmaceuticals (ARNA) and Vivus (VVUS) for a second time.

10. Celgene (CELG) will be the best-performing large-cap (market cap greater than $10 billion) biotech stock in 2012.

Happy 2012! If you have predictions of your own for the coming year, please share in the comments section below.

Here's a look back at how well my 2011 predictions fared:

1. Cell Therapeutics will increase its share count to 2 billion, followed by a 60:1 reverse stock split. Pixantrone still isn't approved.

Correct. My numbers were off a bit. Cell Therapeutics didn't bloat its share count quite that high but came close. Pixantrone still not approved.

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