4 Stories to Watch This Week in the Health-Care Sector

As we approach the end of the year and investors' focus shifts to the looming fiscal cliff and Christmas present purchases, news in the health-care sector is getting scarce. Still, I've dug up four newsworthy stories that should keep your attention in the upcoming week.

On tap near the end of the week are two FDA-inspired stories: an FDA panel review of Hemispherx BioPharma's (NYSEMKT: HEB  ) Ampligen, and an FDA decision on Alexza Pharmaceuticals' (NASDAQ: ALXA  ) Adasuve.

Hemispherx is slated to go before the firing squad on Thursday for its chronic fatigue syndrome, or CFS, drug, Ampligen. It hasn't been an easy road for Hemispherx, which received a complete response letter in late 2009 requesting it run additional trials. New data published in late 2010 demonstrated that the drug caused people with CFS to use less concomitant medications versus the placebo. More recently, a peer study in March of this year determined that those patients with exercise improvements of 25%-50% increased 1.7 to 1.9 times as much as the placebo. With no FDA-approved drug on the market to treat CFS, this will be a panel meeting to watch closely. 

For Alexza, it's judgment day (again!) for Adasuve, its drug to treat agitation associated with schizophrenia or bipolar disorder in adults. This is actually a new drug application resubmission for Adasuve, which the FDA rejected in May because of manufacturing deficiencies. The application was resubmitted to the FDA roughly one month later. Alexza has been trying to get its inhalable compound approved for the better part of three years now but has seen countless delays from the FDA, and now manufacturing deficiencies slow things down. Look for the FDA's decision by Friday. 

It may be late in the year, but investor conferences are still worth keeping an eye on. Between Dec. 15 and Dec. 19, the American Society for Cell Biology, or ASCB, will be holding its annual meeting in San Francisco. Although an ASCB conference isn't going to move the sector by itself, it's worth watching some of the genome sequencing and instrumentation suppliers who'll be attending the event, including Life Technologies (UNKNOWN: LIFE.DL  ) and Qiagen (NASDAQ: QGEN  ) . Testing and research devices are growing cheaper in recent years, which could lead to a surge in demand (as well as turnaround time) for these presenting companies.

Finally, we have a late-season earnings report from diagnostic testing company Neogen (NASDAQ: NEOG  ) . Neogen makes diagnostic test kits for the food industry, while its animal safety segment makes everything from pharmaceuticals to veterinary instruments. Apparently it must be doing something right, as it reported record first-quarter revenue and income in late September. Don't be fooled, however, as Neogen is valued at a frothy 36 times forward earnings despite a rich history of growth. Having missed Wall Street's EPS projections in two of the past four quarters, it'll need a very strong report to maintain its current valuation.

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  • Report this Comment On December 17, 2012, at 11:37 AM, NoPanicBill wrote:

    On Friday morning your site posted an article: "EU Panel Recommends Approving Alexza's Adasuve

    By Rich Smith

    On Friday, Alexza Pharmaceuticals (NASDAQ: ALXA ) and Grupo Ferrer International, S.A., announced that Europe's Committee for Medicinal Products for Human Use (CHMP) has issued a "positive opinion" recommending that their Adasuve anti-agitation drug be approved for sale in the European Union.

    Specifically, CHMP recommended that Adasuve be authorized in the EU for the rapid control of mild-to-moderate agitation in adult patients with schizophrenia or bipolar disorder, provided the drug is "administered only in a hospital setting under the supervision of a health care professional" and that drugs be kept at hand to deal with possible severe respiratory side effects. CHMP's ruling was based on clinical trial results that showed "statistically significant reductions in agitation from baseline compared to placebo."

    CHMP's recommendation is not binding, and will now go to the European Commission, which will render a binding decision, probably in the first quarter of next year.

    Alexza estimates that as many as 8 million adults in the EU suffer from schizophrenia or bipolar disorder; agitation is a common symptom for those people."

    I digested this article and came to the conclusion to sell all of my shares. My reason is this, if the FDA takes the same stance as the EU, which in my opinion now is that the FDA will be harsher, I can NOT see any reason why a Doctor in a hospital setting would ever administer an inhaler drug that requires that the hospital must keep drugs on hand in case of respiratory problems that mar occure from administering this drug when they already have an approved injectable that does NOT have this side effect. The article states in the EU that there is the potential of 8 million users. I don't believe there will be any users. I will be surprised if this drug is approved by the FDA. I also believe if they do approve it with the same label the result would be the same and I see no value in this company anymore. I am not a bashier and I am not shorting this company. I am an investor that is giving 40 years of my experience to my fellow investors in this stock of which I am extremely disappointed.

  • Report this Comment On December 17, 2012, at 11:39 AM, NoPanicBill wrote:

    I meant to say 40 years of investing and my opinion of this stock.

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