NEW YORK ( TheStreet) -- What oil was in the 1930s, biotech is now.
It's a world of wildcatters, only instead of searching for huge pools of oil underground, these wildcatters are trying to bring lifesaving drugs to market, worth billions of dollars. Better yet, families of drugs.
The payoff is usually a buyout by a larger company, as with Onyx Pharmaceuticals (ONXX), now studying buyout offers in the wake of its success with Nexavar, an anticancer drug.Through the 20th century, and again from 2002-2003, Onyx traded for less than $10. Following the rejection of an offer from Amgen (AMGN), it's now trading at about $127 a share. This was also the dream of Dendreon (DNDN), one of the first stock stories I began following closely upon moving from a tech to a finance beat in 2011. Dendreon makes Provenge, a drug for prostate cancer, and back then it was a $40 stock, with bulls like Dr. Theodore Cohen pounding the table for it in commentary on the Internet. As I wrote at the time at Seeking Alpha, I was skeptical about Dendreon, noting that management was asking insurers to pay $93,000 for a treatment that was shown to extend the life of late-stage cancer patients by just a few months. Bulls such as Dr. Cohen called that view ghoulish, and maybe it was, but allowing any unlimited draw from a limited pool of funds is a game that's bound to end in tears, as I noted in my comments. The good times ended in August, 2011, as our Adam Feuerstein reported, over reimbursement issues. Now, with the stock trading for less than 5, the bears are getting their turn, with one asking in an online commentary recently whether it's time to give up on the stock. While hopeful about sales in Europe, the fact is Dendreon now faces two competitors, Johnson & Johnson's (JNJ) Zytiga and Medivation's (MDVN) Xtandi. Back when Dendreon fell, Sangamo Biosciences (SGMO - Get Report) was selling for about $4.50 a share. It's now more than double that, at more than $9.50, on a class of drugs called ZFPs, which can be used to modify DNA sequences to turn genes on or off. (Even at its current price, Sangamo's market cap is less than that of Dendreon.)