New Power for Ancient Names in Biotech

NEW YORK (TheStreet) -- Watching Jim Cramer last Friday on "Mad Money" reminded me of some of the darlings in the biotech and biopharmaceutical space with fascinating names and powerful momentum.

Gilead, for example, is a Hebrew word which means "Hill of testimony" or "mound of witness." As a child my family loved to sing an old spiritual song called "There is a Balm in Gilead." A "balm" is a healing or soothing substance, and there's a publicly traded company named Gilead Sciences ( GILD) that's been working on some life-saving "balms" worth billions of dollars.

GILD is a biopharmaceutical company with a $51.40 billion market cap that discovers, develops, and commercializes human therapeutics for the treatment of life-threatening diseases all over the planet. Its product list reads like a "Who's Who" or "What's What" of the world of pharmaceutical products.

They include Atripla, Truvada, Viread, Complera/Eviplera and Emtriva for the treatment of human immunodeficiency virus (HIV) infection in adults; Viread and Hepsera oral formulations for the treatment of chronic hepatitis B; Letairis, an oral formulation for pulmonary arterial hypertension; Ranexa, a tablet for chronic angina; Lexiscan/Rapiscan, a test that detects and characterizes coronary artery disease; Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, a capsule for the treatment and prevention of influenza A and B.

Their trailing-12-months revenue is more than $9 billion and they have a product pipeline in various stages of testing and development slated to make them billions more. Rather than repeat what Cramer said about this popular company, I'll show you the following chart and you can see for yourself that it's been experiencing major accumulation.

GILD Chart GILD data by YCharts
Since April 2012 the profit margin has ascended impressively as has the price-per-share.

On Monday, Oct. 15, some good news for Abbott Labs ( ABT) cast more positive light on what appears to be coming down the pipeline for Gilead Sciences concerning its hepatitis treatments.

ABT reported that its experimental hepatitis C drug regimen cured 99% of patients in a middle-stage study with the most common and most difficult form of the disease. This news alone caused share of ABT to leap more than 3% to hit an intra-day, 52-week high of $71.99!

Concerning this news, Citi Investment Research analyst Yaron Werber commented that the study results were strong, particularly in newly diagnosed patients. However he said the regimen is complicated because it includes five different types of pills and Abbot's ritonavir can cause serious side effects when taken with some other medications.

Werber said he believes a regimen being studied by Gilead Sciences could produce similar cure rates with fewer pills. Gilead's approach uses two experimental pills, including its drug candidate sofosbuvir, as well as ribavirin.

On Aug. 27, GILD announced the U.S. Food and Drug Administration had approved Stribild (elvitegravir 150 mg/cobicistat 150 mg/emtricitabine 200 mg/tenofovir disoproxil fumarate 300 mg), a complete once-daily single tablet regimen for HIV-1 infection for treatment-naive adults. Stribild, referred to as "Quad" prior to FDA approval, combines four compounds in one daily tablet: elvitegravir, an integrase inhibitor, cobicistat, a pharmacoenhancing agent, emtricitabine and tenofovir disoproxil fumarate.

Investors can anticipate that shares of GILD will continue to perform well if their experimental compounds produce similar cure rates to the one that ABT announced Monday. Their treatment focuses on both hepatitis B and C has the potential to powerfully increase their bottom line profits and earnings in the months to come.

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Now let's look at another name from antiquity of yet another promising biopharmaceutical company. Isis was the name of a goddess in Ancient Egypt's religious system whose worship spread throughout the Greco-Roman world.

Isis was worshipped as the ideal mother and wife as well as the patron of nature and magic. Her name literally meant "throne" as in the throne of the pharaoh. Her headdress was also a throne. As the personification of the throne, she was an important representation of the pharaoh's power. The pharaoh was said to have been her child who sat on a throne provided by his mother Isis.

Quickly ascending to a pharmaceutical "throne" of great potential is what our next company, Isis Pharmaceutical ( ISIS)is in the process of accomplishing.

ISIS engages in the discovery and development of antisense drugs using antisense drug discovery platform. Its product pipeline comprises 26 drugs to primarily treat cardiovascular, metabolic, severe, and rare diseases, as well as cancer.

Their flagship product, Kynamro, is an apo-B synthesis inhibitor in development for the reduction of low-density lipoprotein cholesterol. The company has collaboration agreements with Biogen Idec to develop and commercialize ISIS-SMNRx for the treatment of spinal muscular atrophy. It's also working with Bristol-Myers Squibb ( BMY) to discover, develop, and commercialize antisense drugs targeting proprotein convertase subtilisin/kexin type 9; and Ortho-McNeil-Janssen Pharmaceuticals to discover, develop and commercialize antisense drugs to treat metabolic diseases, including type 2 diabetes.

Isis also has a strategic relationship with Eli Lilly ( LLY) for the development of LY2181308, an antisense inhibitor of surviving as well as a strategic alliance with GlaxoSmithKline ( GSK) to develop new drugs against targets for rare and serious diseases. These valuable collaborations and strategic relationships put the Carlsbad, Calif.-headquartered Isis on the radar screen of the "Smart Money" and a large number of savvy investors.

There's one big possible "fly-in-the-ointment" so to speak. Another biopharmaceutical named Aegerion Pharmaceutical ( AEGR) has a similar cholesterol-fighting drug that the FDA is about to anoint as "safe and effective."

On Monday Oct. 15 (a busy day in the world of medical drugs and companies) an FDC regulatory staff report expressed its support of a possible approval of a plan that manages the risks of AEGR's drug, Lomitapide. It combats the most life-threatening forms of extremely high cholesterol levels. An advisory panel will meet Oct. 17 on the drug, which is Aegerion's most promising product candidate, with the FDA scheduled to make a final decision by the end of December.

AEGR shares were up an astounding 12.4% on Monday hitting a new 52-week high of $18.15. ISIS shares rose as well, up as high as $14 intra-day before cooling down after the good news on AEGR's drug.

The chart below compares the 1-year price gains of both ISIS and AEGR to colorfully illustrate how hot the biopharmaceutical sector has been. Biotech and biopharma stocks are in the mid stages of a long-awaited bull market.

ISIS Chart ISIS data by YCharts

Careful investors might want to start nibbling on GILD, ISIS and AEGR on any pullbacks in anticipation of more possible good news about their blockbuster medicines and their potentially life-saving array of yet-to-be-approved products. Accumulate carefully and as Jim Cramer likes to admonish, use limit orders. These kinds of stocks are very volatile.

At of the time of publication the author held no positions in any of the companies mentioned in this article.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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