Biotech Values

[mblimon]

GTCB and REMICADE: unlocking the transgenic technology

Centocor (J&J) is getting closer to Market Authorisation for yet another block buster application of REMICADE, this time for ulcerative colitis (see the link below)

http://www.biospace.com/news_story.cfm?StoryId=20216120

Now, GTC has two monoclonal antibody programs with Centocor. In the first, for a transgenically produced form of Remicade®, GTC has developed founder animals which are being maintained.

When Geoffrey Cox recently said that approval of GTC's first marketed transgenic product, Atryn, will unlock the value of its transgenic technology, I think we have to think about these kind of blockbuster drugs being produced in goats. It would make perfect sense when Centocor wouls decide to produce Remicade in goats as a way to extend their market position for this drug for another 5-10 years, once Remicade loses its protection and becomes generic. By shifting to a much more cost-effective trangenic production method, Centocor will effectively be able to maintain its market share for this drug, which is now already the major cash cow of Johnson&Johnson. Just imagine the licence revenues and milestone revenues this will bring in for GTCB.

We should be aware that the recent analyst reports of R&R and Cowen for GTCB do no (cannot) take into account these and other future external collaborations. So if they reach at a 4$ share price target, this is just based on Atryn and some other existing internal GTC programmes, while the real value IMO lies in the externalisation of the transgenic technology.