Biotech Values

[biomaven0]

I looked at that report:

http://www.phrma.org/sites/default/files/1000/phrmamedicinesindevelopmentcancer2012.pdf

First comment is that there is a lot of double-counting going on here - for example, Abraxane appears half-a-dozen times, and that is not unusual for some of the other approved drugs like Avastin, as well as not-yet approved drugs such as ridaforolimus. Secondly, many of the VEGF drugs that he criticizes are not pure VEGF at all - rather they are targeted against multiple kinases (e.g., Exelixis' drug). Thirdly, the database also includes some clearly dead projects - for example I noted PCYC's old and very defunct motexafin gadolinium. Finally, I see a whole bunch of projects from companies I don't recognize at all - I assume these must be small private companies.

So at the end of the day I think this report substantially exaggerates the data.

My main point though is that I'm not investing in a portfolio of all oncology drugs under development - indeed I'd be happy to short the entire basket if I could as a pair trade against my longs. Rather I've picked a few that I think will be successful - ARIA, PCYC and MDVN as my substantial picks, with very much smaller positions in a handful of smaller oncology companies that I think have a differentiated drug.

I think the same point can be made with virtually any area of drug development. For example, there are over 1,400 studies on rheumatoid arthritis listed on clinicaltrials.org

Peter