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12:00 AM
Oct 01, 2012
 |  BioCentury  |  Finance

4Q Financial Markets Preview: Wanted: Catalysts for generalists

4Q12 stocks: Buysiders focus on big names with picks for biotech milestone plays

On the back of a strong multi-quarter run for biotech, buysiders hope a handful of important catalysts from some of the industry's biggest names will continue to attract generalist interest. A steady flow of news from mid-caps, including launches for prostate cancer, obesity and irritable bowel syndrome drugs, also could draw in generalists.

Big cap biotechs with milestones this quarter include Biogen Idec Inc., Celgene Corp. and Gilead Sciences Inc.

Biogen Idec is a name that crops up on many watch lists going into 4Q12 based on important clinical readouts and an FDA decision.

Approval of BG-12 for multiple sclerosis (MS) could come by year end, based on a February submission and a standard 10-month review at FDA. The oral dimethyl fumarate that activates the nuclear factor (erythroid-derived 2)-like (NFE2L2; NRF2) pathway also is under review in Europe.

"That is the really big one for me," said HBM Partners' Ivo Staijen. He thinks BG-12 will compete well with the two approved oral MS drugs, Novartis AG's Gilenya fingolimod and Sanofi's Aubagio teriflunomide (see "Adagio for Aubagio," A26).

Biogen is slated to report Phase III data this quarter for rFVIIIFc, a long-acting recombinant Factor VIII product to treat hemophilia A, and dexpramipexole, a small modulator of mitochondrial bioenergetics to treat amyotrophic lateral sclerosis (ALS).

Biogen licensed dexpramipexole from Knopp BioSciences LLC, while rFVIIIFc is partnered with Swedish Orphan Biovitrum AB.

Last week, Biogen and Swedish Orphan reported positive data from another hemophilia program, as rFIXFc met the primary endpoints in a Phase III trial in hemophilia B.

"Biogen has a lot of readouts coming but the risk-reward for them is mixed," noted Marshall Gordon of ClearBridge Advisors. "Expectations are high for the hemophilia program, which is reasonable because they are open-label studies and the company has been up front about being excited about the product."

In contrast, he said, "there is a lot more upside with dexpramipexole because people are skeptical of the likelihood of anything in ALS, and the Phase IIb data were not particularly compelling. So it's risky but has the possibility of a big payoff and won't be catastrophic to the stock if it doesn't work."

Celgene's pomalidomide will be the focus of a Nov. 8 meeting of FDA's Oncologic Drugs Advisory Committee (ODAC). The thalidomide analog is the company's next-generation immunomodulatory drug (IMiD) after multiple myeloma drug Revlimid lenalidomide. Pomalidomide is under FDA review for relapsed and refractory MM with...

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