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: Ziopharm, Sarepta, Vivus, Aegerion, Gilead

One thousand patients on lomitapide at $300,000 per year are enough to justify significant upside to Aegerion's current stock price.

I'm more cautious on Isis for reasons beyond what I expect will be small market share for mipomersen in HoFH. [Don't forget Isis shares the drug's economics with the Genzyme unit of <b>Sanofi</b> <span class=" TICKERFLAT">(<a href="/quote/SNY.html">SNY</a><a class=" arrow" href="/quote/SNY.html"><span class=" tickerChange" id="story_SNY"></span></a>)</span>.] If Isis' antisense technology is the cause of the increased emergence of tumors -- both benign and cancerous -- observed in both mipomersen-treated animals and humans, then the rest of the company's drug pipeline is at serious risk.

Isis failed big time by keeping investors in the dark about FDA's mipomersen tumor concerns. Isis CEO Stanley Crooke is a liar by omission and I find it hard to see Wall Street trusting the guy again until he answers questions about the safety of his antisense technology.

@jmull14 asks, "What are your thoughts on PPHM? Appreciate your insight. Keep up the good work."

Outside of day traders playing for pocket change, I see no reason to believe Peregrine Pharmaceuticals (PPHM) has a viable future. The cancer drug bavituximab has been thoroughly discredited and no amount of data outside the most perfectly conducted phase III study will ever convince anyone otherwise.

I was amused to see Peregrine using its At-The-Market (ATM) equity facility to raise another $14 million over the past three weeks. Legal liability, anyone? That's just more sneaky, stealth dilution on the part of Peregrine's management team, but then given its shoddy track record when it comes to fiscal transparency, I shouldn't be surprised.

PLN mocks, "Nice job pumping Sarepta, you idiot."

I'm a stock pumper now? Make up your mind. I can't be a stock pumper and a basher at the same time.

I realize that traders are discomfited by Sarepta's fall from $44 to $24 since the beginning of October. The stock's rise from $4 to $44 (or even $24) is more impressive and noteworthy to me. Count me worried if Sarepta falls back to single digits, but not much before then.

The additional eteplirsen data presented at the World Muscle Society meeting on Oct. 3 bolstered the Sarepta bull case. Argue all you want about the small patient numbers and bio-statistics, eteplirsen is producing functional dystrophin in DMD kids and that's helping these kids walk further. There is no placebo effect that can explain away these facts.

I'm a Sarepta bull but not naive. The company's considerable challenge now is to convince FDA to consider eteplirsen for accelerated approval. Luckily, the company will be assisted by new federal regulations aimed at speeding approval of drugs for rare diseases. Advocates and parents of DMD kids are already organizing to lobby FDA on eteplirsen's behalf. They, more than anyone, know what's at stake here.

So, Sarepta's recent fall looks to me like a second chance to pick up the stock at a reasonable valuation. If Synageva Biopharma (GEVA) can sport a $1.2 billion market cap for an orphan drug with nine patients worth of phase I/II data, then Sarepta, with data from 12 patients in a well-run phase II study treating DMD patients for 48 weeks is certainly worth a lot more than $500 million.

@Chasingthealpha asks, "Does $GILD take it on the chin post-AASLD when analysts/funds realize $ABT is a real threat?"

The answer depends on the cure rate (SVR) in treatment-naive genotype 1 patients posted by Gilead Sciences' (GILD - Get Report) GS-7977/GS-5885 combination hepatitis C therapy. Abbott (ABT) has set the SVR bar high at 96% (possibly as high as 99%), which doesn't leave Gilead much room for error.

Gilead needs to bring a 90%-plus cure rate to the table if it wants to compete with Abbott. Gilead's dosing convenience (two drugs, co-formulated into a single pill) is an advantage over Abbott's multi-drug, twice-daily regimen but only if the respective cure rates are within shouting distance of each other.

On Monday, ISI Group analyst Mark Schoenebaum emailed results from his latest sentiment poll showing buyside investors predict, on average, an 85% SVR rate for Gilead's '7977/'5885 combo.

Gilead is the best-performing large-cap biotech stock this year by a wide margin and its HIV franchise appears to be re-gaining momentum, so the company might have enough Wall Street support built up to under-deliver in Hep C and emerge unscathed. Future Hep C drug sales are forecast to top $15 billion so there's enough market share for Gilead, Abbott and other players to capture.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
3 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
ZIOP $13.08 0.00%
AEGR $10.24 0.00%
GILD $105.96 0.00%
SRPT $36.76 0.00%
VVUS $1.25 0.00%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs