The crowds have finally thinned in the halls of the Westin St. Francis in San Francisco, the home of JPMorgan's annual health care conference. There is a sense of urgency at the gathering, where seemingly every health care investor and executive spends at least part of the week. Everyone is looking for an edge, and the CEOs of both publicly traded and private companies are all too eager to explain why their organization deserves investors' attention and dollars. The big-cap names mostly presented Monday and Tuesday. I
discussed my observations of that part of the show earlier in the week. The last two days concentrated on the smaller names, and here are some of the highlights of what was said -- and what wasn't. rants on the shares of Shire partner New River Pharmaceuticals ( NRPH), you know that I was chomping at the bit for Emmens to address the labeling issue of NRP104, now known as Vyvance.
When asked if Vyvance needs to have the anti-abuse label in order to be successful, Emmens said that Vyvance simply needs to be effective and "show anti-abuse potential." He refused to comment on the label specifically. MGI Pharma ( MOGN) was more than willing to talk about 2007, which executives expect to be a big year for the company. While the company preannounced disappointing revenue for 2006, its Aloxi drug, which treats nausea caused by chemotherapy, could see improved sales this year. In a sit-down with TheStreet.com, MGI Chief Financial Officer William Spengler explained that Aloxi's flat $250 million in sales in 2006 was the result of several factors related to competition from generic versions of GlaxoSmithKline's ( GSK) Zofran. Spengler said that MGI was aggressive in offering rebates to compete with the cheaper alternatives. Some clinics held off placing orders for Aloxi, expecting MGI to continue to lower prices as the end of the quarter drew closer. While the competition was expected, the company has been hurt by clinics and physicians who can make an additional $80 to $90 per vial by prescribing the generic anti-nausea medication instead of Aloxi. However, in the third quarter this year, physicians will have to pay more for the generic, closing the price gap between MGI's drug and generic competition. The company also plans on filing a new drug application for Aquavan, a sedative for use during gastrointestinal procedures such as colonoscopies, midyear. MGI hopes to launch the product next year. Spengler believes sales for Aquavan could reach $250 million just in GI indications.
MGI has been cash flow positive for six months, is expected to earn a profit this year and "has no financing needs," according to Spengler.
The hedge fund manager says royalties from companies with viable products or compounds but weak management could be returned to shareholders in the near future. He named Ligand Pharmaceuticals ( LGND), MGI Pharma and SuperGen ( SUPG) as potential candidates. MGI's Spengler said the idea was interesting but was more likely to occur in earlier stage companies than in companies such as MGI that have existing products.