I'll kick off the action with a note from Dore S., who writes: "Hey Adam, your faithful herd would probably appreciate an update on Cell Genesys. The company released a Feb. 15 press release that smelled like a subset analysis but has catapulted the stock. Your two cents for all to read would be appreciated." Dore's sense of smell is pretty good. I'm
Pfizer's ( PFE)
Along the Letairis lines, from Jerry G. came this email: "Why no comment of Gilead Sciences' Letairis getting a change in its
Ron R. writes: "Adam, I've been following your posts for a while and have concluded you are a really good soul, as well as a rather astute biotech analyst. So tell me please, what has been going on with the bizarre fluctuations in Alexion Pharmaceuticals' stock price." This is the first time anyone has commented on my soul, so thanks, Ron. With the caveat that I don't follow Alexion that closely, I'll say that the drop in the stock from mid $70s to the low $60s over the past week or so seems to coincide with a downgrade to market perform from Wachovia Securities. This was essentially a valuation call, prompted by what the analyst sees as flattening revenue growth for Soliris, Alexion's drug used to treat an ultra-rare blood disorder. This week was also not very kind to mid-cap biotech stocks, with many, not just Alexion, coming under some heavy selling pressure. There was an unconfirmed rumor in the market that perhaps a large mutual fund was selling off all or parts of its biotech book. Fundamentally, Alexion has been and continues to be a strong biotech story. Fourth-quarter results were very good, and 2008 guidance indicates the company is driving toward profitability. From a valuation perspective, there seems to be tug of war between those who see fair value in the low $70s versus somewhat higher, call it $80 plus. The difference comes down to how many patients Alexion can identify and treat with Soliris both here and in Europe. But I'd also pay attention to the company's efforts to expand Soliris into other indications. If successful, that could be the really big growth driver for the company that is somewhat overlooked today.