Replies to post #72040 on Biotech Values

[DewDiligence]

Re: Ophthalmology stocks

Do you have an opthalmogy specialist stock known to the board? Just thinking with the baby boomers and the volume of old people increasing, the population's gonna need more specialist treatment.

EZredux, ‘stayfocused’, et al: I don’t especially like any of the ophthalmology biotechs these days. This might seem surprising given that GENR was my biggest gain ever in a biotech stock in absolute dollars; however, I was lucky to have made so much money on it in 2003-2004 insofar as the drug that fueled the gains (squalamine) ultimately proved to be a dud.

As you undoubtedly know, the AMD market changed radically in 2006 with the approval of Lucentis, which raised the bar substantially for competing drugs and devices. Lucentis made Macugen and Visudyne irrelevant and caused several AMD drugs in development to be canned.

OPK is still a player in AMD, but I don’t think bevasiranib is an especially good drug and I wouldn’t touch any Phillip Frost company with a ten-foot pole. AGN killed Sirna-027 (#msg-34101883), the other AMD drug candidate based on RNAi, and MRK did not even bother to reacquire the program. This does not imply that bevasiranib will also fail, but it’s not a good harbinger.

OXGN claims to have a topical treatment for AMD, but I’m skeptical (#msg-27629141).

REGN now has the highest-profile program vying to compete with Lucentis: VEGF-Trap-Eye. I think VEGF-Trap-Eye, if approved, will have a tough time gaining traction against Lucentis, and it’s far from a lock to succeed in phase-3. Moreover, REGN has a market cap of about $1.2B of which most is attributable to the non-ophthalmology assets—it’s hardly the pure play you seem to be seeking.

ISPH is a small-cap (~$200M) company that focuses on ophthalmology, but I don’t follow it closely because the company’s programs are for such mundane conditions as dry eye and ocular infection rather than back-of-the-eye diseases where the medical need is more compelling.

ACL is the premier ophthalmology company on the planet, but I presume you weren’t asking about companies that already have a $25B market cap! Moreover, ACL no longer has any buyout vig because NVS has effectively bought it already.

The stock I like best among the ones mentioned in this post is AGN, although it’s a vastly different company since the acquisition of Inamed. Ophthalmology is now a relatively small part of the business. (I think Latisse, the newly approved drug to make eyelashes longer and thicker will be a big seller: #msg-34424441.)

Regards, Dew