This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

On Nowruz, Reviewing Drug Stock Picks

Stocks in this article: ONXXVSTMAMLNGILDVRTXELN

NEW YORK ( TheStreet) -- As a few of you might have guessed from the contrast between my hard-to-pronounce last name and white-guy visage, I'm half-Persian. My dad was born in Iran and came to the U.S. to attend college; my mom's family is from Germany. Last week, my family celebrated Nowruz (literally translated "new day"), which is the Persian New Year and always occurs on the first day of spring.

Every Nowruz, I reflect on the past year and evaluate my decisions, with the goal of validating successes and learning from mistakes. In that spirit, let's revisit some of my drug-stock investment columns thus far. (You can access a complete archive here.)

Amylin Pharmaceuticals (AMLN)

Upon the long-delayed FDA approval for the diabetes drug Bydureon, Richard Pops, CEO of Amylin's partner Alkermes, tweeted "Game on." So far though, Amylin's game is way off. "Bydureon's commercial launch looks to be flailing, if not quite yet failing.

Wall Street analysts, nervously bullish, have already started to make excuses. Despite only a few weeks of prescription data, sellside notes are filled with reassurances: It's still early days in the Bydureon launch. True, I agree with that. The number of Bydureon prescriptions written to date is "similar" to competing diabetes drugs. I guess, but only if you apply a broad definition to the term "similar." Amylin's sales force "wasn't yet ready." That's a weak defense, given Eli Lilly (LLY) jumped exiting the Byudreon partnership three months before the drug's FDA approval.

From my view, Bydureon, a once-weekly GLP-1, is lagging the commercial launches of Byetta, Amylin's other diabetes drug, and Novo Nordisk's (NVO) Victoza, a once-daily GLP-1. Comparing Bydureon to Victoza is particularly apt and damning: Byudreon cumulative scripts are already more than 20% behind Victoza at comparable time points. If Bydureon were the revolution that bulls had hoped for, the drug should at least be launching in-line with Victoza. The excuses feel especially weak given Bydureon's advantages: High physician awareness, wide acceptance of the GLP-1 drug class and (according to the Amylin bulls) a competitive dosing advantage.

One other issue should worry the bulls: Amylin raised $200 million earlier this month in a secondary offering. I don't begrudge a "strike while the iron is hot" mentality, particularly when shares are up and management likely sees dark clouds gathering. Yet the move comes shortly after the company highlighted its tight expense control and guided to only a slight non-GAAP operating loss for 2012. Why do they need the money now? It seems like a red flag that suggests management has low confidence in the company's internal Bydureon launch estimates.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs