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Biotech Stock Mailbag: Vivus, Chelsea, BioCryst

Perhaps BioCryst's biggest challenge is playing catch up. '5191 is late to the party and may not find many hepatitis C patients to treat if and when it gets approved years from now, behind all the other drugs way out in front.

Right now, there is scarcity value with respect to nucleot(s)ide polymerase inhibitors -- the so-called "nuke" class of antiviral hepatitis C drugs. That makes BioCryst's announcement noteworthy. But ahead of these guys in the nuke race are Gilead, Inhibitex (INHX) and Idenix Pharmaceuticals (IDIX). In a few months, Vertex Pharmaceuticals (VRTX) will be releasing the first human data on its nukes. I'm sure there are other nukes in drug labs getting ready to be unleashed on investors, too.

My guess is that this time next year, we'll be talking about the nuke class of hepatitis C drugs the same way we talk about protease inhibitors today -- lot of them, too many, a glut.

If BioCryst is going to make a go of it with '5191, the company needs to move really fast and have exquisitely good data.

Jeff D. sends one of the few emails regarding my column examining why BioSante Pharma (BPAX) is overvalued that I can publish without censoring for naughty words.

"It's apparent you know very little about this company! And have your own agenda. Smart investors can see through this. You make general statements and circle around the truth. A remark that 'you think royalties are 6%' shows that you obviously were too lazy to obtain the correct information before writing the article. The statement you made that their cancer vaccines are worthless: Did you mention the fact that JHU [Johns Hopkins University] has been working on them for a decade? I guess these doctors know less than you, Adam. I am not going to give you an education on what the responsibility an author should have before writing an article. You are deliberate in your attempt to mislead investors for some reason. Does the word 'character' mean anything to you?"

"Character" in the context of my job as a biotech stock columnist means telling the truth even if it's uncomfortable or unpopular. My agenda is to help investors make informed decisions about biotech stocks. When it comes to BioSante, the numbers do not lie. Traders and momentum investors can distort the true value of a company's stock price for a time, but eventually, the numbers and the fundamentals do matter.
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