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TheStreet Open House

Biotech Buyside Predictions for 2012

BOSTON ( TheStreet) -- Gilead Sciences (GILD) is the most loved biotech stock; Amgen (AMGN) the most hated. New drug launches by Amylin Pharmaceuticals (AMLN) and Regeneron Pharmaceuticals (REGN) will blow. Dendreon (DNDN) is in for another rough year.

These are some of the thoughts and predictions of biotech's buyside investors for 2012, compiled by ISI Group analyst Mark Schoenebaum. His survey, completed by 266 institutional investors, isn't exactly scientific, but it does provide an interesting window into the minds of Wall Street's biotech crowd.

When asked to name their favorite biotech stock for 2012, 12% of investors picked Gilead Sciences, followed by Celgene (CELG) with around 8% of the popular vote. Biogen Idec (BIIB), Alexion Pharmaceuticals (ALXN) and Vertex Pharmaceuticals (VRTX) round out the top five faves.

Amgen was chosen as the least favorite biotech stock for 2012 by 12% of investors in the ISI Group-Schoenebaum survey. Gilead was second with a bit less than 8% of the vote, which likely reflects the love-hate thing investors have with the $11 billion Pharmasset (VRUS) acquisition. Celgene, Dendreon and Biogen Idec ranked 3-5 on the hated list.

No surprise seeing Dendreon land on list of bio-hazards given Provenge's epic fail last year. Investors aren't enthused about the prospect of a turnaround in 2012 either: 50% forecast Provenge will miss 2012 sales expectations. The other 50% split almost evenly between Provenge meeting and beating expectations this year.

Investor attitudes towards all drug launches seems surly, a continuation of the "short the launch" trend firmly established last year as a winning trading strategy. Forty-one percent of investors predict Regeneron's Eylea launch will fail to meet expectations, with 32% saying the launch will meet sales forecasts and 27% taking the optimistic "beat" line.

Amylin's looming Bydureon diabetes launch is likewise viewed with pessimism. Half the respondents predict a miss, with 29% and 22% forecasting "meet" and "beat," respectively.

The only faint glimmer of optimism about drug launches in Schoenebaum's survey comes from Human Genome Sciences (HGSI), where 42% of investors believe the lupus drug Benlysta can meet consensus sales expectations for 2012. Of course, Human Genome so badly failed with the Benlysta launch last year that the stock already bakes in a ton of negativity.

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