No Biotech Stock Mailbag this week owing to my J.P. Morgan Healthcare Conference travels, but I'm going to use the blog to answer some reader questions, and at the same time, offer takeaway thoughts from the conference.
@adamfeuerstein Can you rate the top five company presentations you were most impressed with at the J.P. Morgan Healthcare Conference?ThanksFireTimCook (@FireTimCook) January 17, 2014
I didn't see everyone at #JPM14, obviously, but among the companies I did get a chance to hear from, here's who impressed me the most:
Morphosys: A new stock for me, first time seeing management present their story. Super-deep pipeline of monoclonal antibodies -- almost ridiculously deep. Good partners -- Celgene (CELG), Novartis (NVS), J&J (JNJ), Roche (ROG) -- plus proprietary compounds. Most interesting pipeline products (to me) are 1) the anti-CD38 for multiple myeloma, partnered with Celgene. If Celgene likes your myeloma drug, it must be promising. 2) Gantenerumab, the amyloid beta monoclonal antibody partnered with Roche and being studies in a phase III trial enrolling pre-Alzheimer's patients. Obviously, this is a super speculative, high risk program but the rewards, if it works, is gigantic. I know I'm late to the Morphosys story -- the stock has a great run last year -- but I liked it. Morphosys trades in Germany under the ticker "MOR" and in the U.S. as an OTC stock "MPSYF"
Intercept Pharma (ICPT): Oh god, here comes Adam pandering to the momentum stock-trading crowd. Seriously, not my intention. The volatility in Intercept has been insane and will probably continue, but I walked away from Wednesday's presentation impressed. My "CEO is a stock tout" alarm bell did not ring. The focus is on the NASH indication, naturally, but the phase III study of OCA in primary biliary cirrhosis is coming up early in the second quarter. We won't see data from the phase II NASH study until later in the year, probably in November at the AASLD meeting. Between now and then, expect a lot of debate and chatter about the "lipid abnormalities" and the FDA approvable endpoints for a pivotal NASH study. I'm not saying Intercept is going straight up all year, but if NASH works out, this could be a winner even after everything that's already happened to the stock.
Gilead Sciences (GILD): As I do almost every time I sit in a room with Gilead's executives, I walk out remembering just how smart these guys really are. I know there's a wee bit of controversy about the outsized Street expectations for the hepatitis C drug Sovaldi and how insurance companies will deal with pricing and competition. But then I remember Gilead knows A LOT about how to price, launch and market anti-viral drugs. No one in the industry is better than Gilead. Plus, Gilead's oncology pipeline is moving along really well and it even has a NASH drug!
Sarepta Therapeutics (SRPT): Okay, I hear the collective groan from the peanut gallery. Adam is obsessed with Sarepta -- blah, blah, blah. Point taken, but then, I believe sincerely in eteplirsen. I think the drug works and was happy to see the positive 120-week update from the phase II study. No, I'm not betting on FDA reversing course and allowing Sarepta to seek early approval on the phase II data. I still expect the company to run a phase III study. I do hope -- and feel more confident about -- FDA not requiring a placebo control arm. What I liked best about Wednesday's presentation was Sarepta starting to talk more about its morpholino chemistry RNA therapeutics platform. Platform. Platform. Platform! Investors have vested Isis Pharma and Anylam Pharma with multi-billion dollar market values because of their respective RNA therapy technology platforms. Sarepta gets no credit for its RNA platform. Granted, Isis and Alnylam have done more through deeper pipelines and partnerships to earn their accolades, but Sarepta is moving in that direction, too, particularly with the hiring of its new CSO Art Krieg. I really liked what I heard from Sarepta CEO Chris Garabedian on Wednesday -- a step in the right direction.
Orexigen Therapeutics (OREX): A shameless plug for one of my 2014 predictions. When Contrave is approved later this year (and it will be approved), it will be the only obesity pill on the market with cardiovascular outcomes data derived from a large, randomized clinical trial. I think that's a big advantage for Orexigen and Takeda, which will be selling the drug in the U.S. Orexigen hasn't disclosed the specifics from the CV outcomes study, but management's body language surely sounded confident to me. Plus, the CV outcomes data could be ticket to European approval, where Vivus (VVUS) and Arena Pharma (ARNA) have failed. Obesity pill stocks have been big disappointments post approval -- and rightly so -- but I like Orexigen's chance to reverse the negative trend.
That's my five. This doesn't mean there my only five. I left San Francisco feeling good about Celgene, NPS Pharma (NPSP), and others. I'll write about them later.