Read Part 1 of Jubak's picks.
It's been an up and down year for
. The company recorded mixed results from a Phase III trial for ISIS 2302, its drug candidate for treating Crohn's Disease, which led to the termination of a partnership with
The stock then went under pressure as Boehringer Ingelheim sold off its shares.
However, Isis will begin new Phase III trials for the drug this year. And the company has four other compounds in Phase II trials, including ISIS 14803 for hepatitis C. Meanwhile, ISIS 3521 for nonsmall-cell lung cancer, is currently in Phase III trials. On March 19, Isis announced a one-year extension of its research partnership with
to develop drug candidates for treating hepatitis C. The company finished 2000 with $127 million in cash and short-term investments.
You certainly wouldn't know it from the stock price, but
has been making progress. By the end of 2001, the company should have five products in Phase III trials to go along with its FDA-approved drugs ONTAK, Panretin and Targretin for the treatment of T-Cell lymphoma and Kaposi's Sarcoma. A fifth drug, Morphelan, a once-a-day oral form of morphine, is now waiting for regulatory approval.
The knock on Ligand is that all these are very specialized cancer drugs with small markets. True enough, but in taking these drugs from trial to market, the company has developed critical expertise in managing a process that frequently trips up biotechnology companies. The company has a huge pipeline of drugs for larger markets currently in development with partners such as Pfizer for osteoporosis and breast cancer,
for diabetes and
for inflammation. At the end of December 2000, the company had $58 million in cash and cash equivalents.
shows the power of money. The company used some of the almost $60 million it raised in the first half of 2000 to reacquire product rights from Chiron and Eli Lilly and to accelerate its drug development program. Along with its partner Chiron, Ribozyme has taken Angiozyme into Phase II trials for metastatic breast cancer and has begun planning for Phase II trials for the drug candidate in colorectal and kidney cancer. Heptazyme, a potential drug to fight hepatitis C, has moved into Phase II trials after successfully completing its Phase I test in April 2000.
Two other drug candidates for breast cancer and hepatitis B are about to enter trials. Ribozyme Pharmaceuticals finished September 2000 with $37 million in cash and cash equivalents. In late December, the company entered into an agreement with
Acqua Wellington North American Equities Fund
that would require the fund to buy up to $60 million in Ribozyme stock in $1 million to $8 million lots, at Ribozyme's request, during the next 28 months at a discount of no more than 5% from the current market price.
Vertex Pharmaceuticals has a lot on its plate. The one drug it already has on the market, Agenerase, a protease inhibitor sold in partnership with Glaxo, is projected to show sales of $95 million in 2001 -- resulting in about $15 million in royalty income for Vertex. The company has an additional 12 compounds in development. The most promising include VX-745, now in Phase II trials for rheumatoid arthritis, VX-497 in Phase II trials for the treatment of hepatitis C and VX-175 in Phase II trials for the treatment of HIV.
Thanks to a huge deal with
, the company will be ramping up spending on research on discovering new drug targets for kinase proteins, a class that has been implicated in everything from cancer to cardiovascular disease. Vertex is obligated to provide Novartis with eight clinically and commercially relevant drug candidates, and Novartis is to provide research funding and milestone payments that could reach as high as $800 million over the life of the deal. The company ended 2000 with $707 million in cash and cash equivalents
American Association of Cancer Research
annual conference this month,
presented evidence showing positive results for its Vaxid naked-DNA vaccine in the treatment of low-grade non-Hodgkin's B-cell lymphoma. This is the first time that the company has presented evidence that a naked-DNA vaccine is safe for human cancer patients and marks an important milestone in establishing that a naked DNA cancer vaccine -- based on each patient's own cells -- could work. Besides Vaxid, the company is conducting Phase II trials for Allovectin-7 in melanoma, Phase II trials for Leuvectin in kidney cancer and Phase II trials for a malaria vaccine. The company expects results for the trials for kidney cancer and malaria in the second half of 2001. The company finished September 2000 with $20 million in cash and cash equivalents and $131 million in marketable securities on its balance sheet.
One more for the portfolio to replace Microcide -- and I've got 10 again. I'm dropping Microcide not because the stock has tanked -- it's up 8% since I added it on March 4, 1999, at $3.88 a share -- but because the company hasn't made enough progress, in my opinion, toward developing a full pipeline of drug candidates. That relative lack of progress sent me looking for a company with a broader drug discovery platform and a larger stable of promising drug targets. My candidate?
The company, formed in a merger with
in 1999, has developed an expertise in the body's calcium receptors and is specializing in developing small molecules and proteins as drugs for bone and central nervous system diseases. Its lead project, ALX-11 for osteoporosis, is not in Phase III trials. But the "jackpot" product, under development with partners Kirin Brewery and Amgen, is a potential drug for hyperparathyroidism. That disease, which is characterized by excessive levels of parathyroid hormone and calcium in the blood, affects more than 1 million people in the U.S. The drug candidate is currently in Phase II trials. The company finished December 2000 with $237 million in cash and cash equivalents.
That's it for now. I'll update this portfolio in another six months. At that time, since we're at the 10-stock maximum for this portfolio, I'll again look for candidates to improve the group. I hope no buy-and-holder will be too upset if we trade once every six months or so.
At the time of publication, Jim Jubak owned or controlled shares in the following equities mentioned in this column: Brocade, Hyseq, Icos, Isis Pharmaceuticals, Ribozyme Pharmaceuticals, Vertex Pharmaceuticals and Vical.