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Biotech Stock Mailbag: Antares Pharma, NewLink, Celgene

Numbers? Jefferies analyst Corey Davis (a big Antares bull) forecasts $16 million in Otrexup U.S. sales in 2014, $43 million in 2015 and growing to peak sales of $190 million in 2022. Cut Davis' forecasts by one-third, at a minimum, to account for sell-side overreach.

Selling moderately improved and more expensive versions of generic drugs is not easy. Antares knows this better than anyone because its currently approved products Elestrin and Gelnique (sold through partners) have been commercially disappointing.

And it's not like investors have been ignoring Antares. The company's current market cap already exceeds $500 million.

Before I address a specific question about NewLink Genetics (NLNK), I want to lay down a bifurcated position on cancer immunotherapy in general.

Position No. 1: Until I see convincing evidence of efficacy (successful phase III studies, FDA approvals) I am extremely skeptical of any company taking the "vaccine" approach to targeting cancer cells. I define a cancer vaccine as any therapy made up of tumor cells (autologous or patient specific), antigens or other immune-boosting agents designed to provoke the body's immune system to mount an attack on specific types of cancer cells.

Who's in this cancer vaccine group? Dendreon (DNDN), of course. Provenge is approved, but it's a fluke and a commercial disappointment. The list of companies with failed cancer vaccines is much longer -- Cell Genesys, Genitope, Favrille, Oncothyreon (ONTY), Antigenics (AGEN), CancerVax, etc.

Despite a lot of convincing evidence debunking the vaccine approach to cancer immunotherapy, tiny biotech companies push ahead -- NewLink, Galena Biopharma (GALE), Vical (VICL), Northwest Biotherapeutics (NWBO), ImmunoCellular Therapeutics (IMUC). I'm not a believer. I'll be happy to admit my error if/when one of these companies produces boffo clinical data. I just don't see that happening anytime soon.

Position No. 2: The anti-PD1/PDL1 approach to cancer immunotherapy works. These therapies turn off a cloaking device used by cancer cells to hide from a patient's immune system. One way cancer cells grow is by donning molecular camouflage which tricks the immune system into thinking they're normal, healthy cells. The anti-PD1/PDL1 (and anti-CTLA4) drugs turn off cancer's cloaking device. Without the protective camo, the immune system attacks cancer cells as foreign and deadly.

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