SAN FRANCISCO -- I've been attending the JPMorgan Healthcare Conference here since 2001. This year, the halls and meeting rooms seem more packed than ever. That may not mean anything, but then again, it may bode well for the biotech sector this year.

Of course, biotech hasn't suffered like the broader markets in early 2008. Through the first five trading sessions of the year, the two major biotech indices were flat, while there were steep drops in the S&P 500, Dow and Nasdaq.

Biotech Buzz: Fresh News From JPMorgan Confab

That may change when this conference wraps up on Thursday, and historically, biotech stocks do sell off after this confab. We'll see if the excitement here has legs.

ImClone Systems ( IMCL): Last October, I wrote a Columnist Conversation post that called ImClone an intriguing and undervalued biotech asset amid rampant (at that time) M&A speculation in the sector.

Since then, the stock has sunk to $38 from $45 -- either I'm stupid, or ImClone is even more undervalued today.

After listening to the company's presentation on Tuesday, I'm inclined to believe the latter (although the former might also be true -- let's reserve final judgment for a later day).

The way I see it, the company's position with Erbitux for colon cancer is getting better, and the opportunity in lung cancer has tremendous upside. Sure, Erbitux may not turn out to be as effective as Genentech's ( DNA) Avastin, but it really doesn't have to be; a large number of lung cancer patients cannot take Avastin. Yet these patients will likely benefit from Erbitux therapy.

As I've written before, ImClone has valuable biologics manufacturing capacity, an asset that Big Pharma appears to crave. ImClone also has a pipeline of cancer drugs, several in phase II trials, so it's not solely dependent on Erbitux.

A key event for ImClone this year will be the presentation of data from the Erbitux lung cancer trial at the American Society of Clinical Oncology meeting in June. We know the study is positive, but with no details yet, investors seem to believe the worst.

Perhaps I'll look smarter on ImClone after ASCO. I hope so.

The battle over the pulmonary arterial hypertension drug market must be heating up, because Swiss drug maker Actelion is using this conference to sling mud at competitor Gilead Sciences ( GILD) and its newer (and clinically superior) PAH drug Letairis.

Actelion executives are telling investors in private meetings here that doctors and patients prefer its PAH drug Tracleer over Gilead's Letairis because the latter is causing abnormally high rates of leg edema, or swelling. I was at a cocktail party this week where an Actelion executive told me the same thing.

Gilead executives, and many investors I spoke with, are brushing this off as a feeble attempt by Actelion to distract from the fact that physician surveys are showing a clear preference for Letairis over Tracleer. And data from clinical trials also show that rates of leg edema are comparable for both drugs.

At a presentation and breakout session Monday, Gilead management said the Letairis launch is going well, with early sales coming from newly diagnosed PAH patients and those who can't tolerate or fail Tracleer.

Gilead said it has seen some PAH patients switching from Tracleer to Letairis, but only in small numbers. However, I've spoken with some institutional investors who've commissioned their own doctor surveys that say the rate of patient switching is higher -- a good sign for Gilead.

Biogen Idec ( BIIB) may have said it is no longer for sale, but that doesn't necessarily mean a deal won't get done.

That's a bit of speculation making the rounds here. The chatter is light on details, and it may just be coming from burned investors hoping to make some money back after a sale flamed out the first time around, but here's the logic:

Swiss biotech firm Serono also put itself up for sale in late 2005 but didn't get any offers, just like Biogen Idec. Once the hubbub faded away, however, German drug maker Merck KGaA gobbled up Serono in September 2006.

Could the same thing happen to Biogen Idec now that the media spotlight on its planned sale has dimmed? It's hard to see how an acquisition at $80 a share or more could happen -- the stock was recently at $58.10 -- but a "discounted" deal in the high $60s or $70s isn't necessarily out of the question -- or so says the chatter in the conference halls.

The message from Amylin Pharmaceuticals ( AMLN) CEO Dan Bradbury here is that primary care doctors are prescribing more of the company's Byetta diabetes drug, meaning sales growth will reaccelerate in 2008.

Byetta prescriptions grew 33% in 2007 overall, but growth flattened in the later part of the year. In an interview, Bradbury said that general practitioners, who account for about 80% of diabetes drug prescriptions overall, are now prescribing more Byetta than early adopters of the drug, which included endocrinologists and diabetes specialists.

"The endocrinologist market for Byetta has stabilized, but prescription growth from primary care doctors is picking up," said Bradbury, adding that the company is investing in more patient support programs and Byetta marketing as well.

Amylin shares are down 24% since reporting third-quarter results in October, largely on investor concerns that Byetta sales growth is flattening. The stock was trading at $35.13 Wednesday. A once-weekly formulation of Byetta is expected to be a big revenue driver for the company, but an FDA filing for that drug isn't expected until the middle of 2009, so the drug won't likely be on the market until 2010.

It's worth noting that the overall market for diabetes drugs has also been stagnant, in part because of safety concerns that surfaced last year around GlaxoSmithKline's ( GSK) Avandia.

Investors will be watching Byetta prescription data in the next quarter or two to see if Bradbury's optimistic message strikes true. More than that, however, Amylin's problem seems to be its lofty valuation, even with the recent selloff.

Even if you assume all goes well with once-weekly Byetta and it brings in $2 billion to $3 billion in peak revenue, that's still only worth about $2 billion to $3 billion in market value to Amylin, by my calculations of present net value and the profit share with Eli Lilly ( LLY).

Amylin's market cap is $4.75 billion. I'm not factoring cash or other revenue, including that from diabetes drug Symlin, into my simple value calculation. There is, however, an argument to be made that, at Amylin's current price, you're already getting once-weekly Byetta and then some.
Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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