Biotech Portfolio Updates – Buying More Genentech and Exelixis


 

Only two and a half weeks have passed since the launch of the model portfolio, so it is still too early to assess its performance, nevertheless, even after a sharp decline in two stocks, the portfolio seems more robust than the general market. Since inception, the biotech portfolio, co-managed by Ran Nussbaum and myself is down “only” 3.6%, compared to the Nasdaq and S&P which are down 8.5% and 6.7%, respectively for the same period.    

 

Based on recent market action and the unprecedented level of anxiety, it seems that the bottom is getting closer and hopefully, the markets will stabilize towards the end of 2008. Therefore, the coming weeks may be a good opportunity for increasing exposure to the stock market, which is why we intend to end 2008 with 90-95% of the portfolio in stocks.

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Arqule’s Imminent Licensing Deal

   

The past year certainly was not an easy one for Arqule’s (ARQL) investors who saw their shares plummet more than 50%. Perhaps this kind of decline does not look too big of a deal for a small biotech company when compared with “solid” investments such as AIG (AIG) or Citi (C), but the current price level is certainly not what the institutionals who bought $55 million worth of stock for 7.75$ a share last year envisioned. The good news is that now, with a new management team and an imminent partnership deal for Arqule’s lead compound, ARQ-197, the stock represents an opportunity for an aggressive upward move in 2009.

 

The company has been talking about licensing ARQ-197 for some time now, but based on remarks made by its new CEO, there are active discussions with potential partners that could mature into a deal in the near future. Last month, the Oppenheimer & Co healthcare team issued an insightful report titled “Collaborations as Catalysts” which mentioned ARQ-197 as a potential licensing candidate. According to Oppenheimer, although such a licensing deal could happen already this year, it is more likely to happen next year following the release of clinical data from ongoing clinical trials.

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Poniard Pharmaceuticals – Platinum Rediscovered (Part II)

Poniard Pharmaceuticals – Platinum Rediscovered(Part II)

This article will discuss the development of Poniard’s lead drug, picoplatin, for the treatment of small cell lung cancer (SCLC). A General introduction for picoplatin can be found in the first part of this article.

As a novel platinum compound, picoplatin seems to be the ultimate “platform” product, with potential application in multiple indications, including some of the most lucrative oncology markets. Nevertheless, the only chance Poniard has to generate sales from this product in the next 4-5 years lies in a relatively modest indication – Small Cell Lung Cancer (SCLC).

SCLC accounts for 13%-15% of all lung cancer diagnosed in the US (32,000 cases in 2007). When diagnosed early, the disease is curable with surgery in some patients, however, in most cases, patients either develop recurrent disease or are diagnosed at an advanced stage. The common treatment for SCLC is a platinum-containing chemotherapy regimen, which typically leads to a very high response rate, however, the vast majority of patients eventually relapse, thus creating a second line market of around 70 thousand patients in developed nations. Although this market represents a rather small market for picoplatin, it can certainly be viewed as the most underserved one.

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