Today's Biggest Biotech Stories: Alexion, Salix, and Ampio

Alexion Pharmaceuticals, Salix Pharmaceuticals, and Ampio Pharmaceuticals could all make health-care headlines this morning.

Feb 24, 2014 at 9:16AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! Let's take a look at three biotech stocks that could loom large in health-care headlines this morning -- Alexion Pharmaceuticals (NASDAQ:ALXN), Salix Pharmaceuticals (NASDAQ:SLXP), and Ampio Pharmaceuticals (NYSEMKT:AMPE).

Alexion's Soliris is granted a new orphan designation in Europe
First and foremost, Alexion announced that the European Commission has granted an orphan drug designation to Soliris for the prevention of delayed graft function (DGF) after solid organ transplantation. This follows the FDA granting an orphan drug designation to Soliris for the same indication last month.

Soliris is approved in the United States, Europe, Japan, and several other countries for the treatment of two ultra-rare diseases -- paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Due to the rarity of both diseases, Soliris is the most expensive drug in the world, with a wholesale price up to $400,000 per patient per year.

DGF occurs when a transplanted organ fails to function normally immediately after a transplant. In the case of a DGF occurring during a kidney transplant, the patient will require immediate dialysis. Since there is currently a shortage of kidney donors, the improved treatment of DGF will result in a more efficient use of donated kidneys. Today, 15% to 20% of donated kidneys are reportedly not used and discarded in the U.S. and Europe, due to a DGF disrupting the transplantation procedure. Peak sales estimates for Soliris are around $3.4 billion. In 2013, sales of Soliris, Alexion's only marketed product, rose 37% year over year to $1.55 billion.

Salix and Pharming receive a new PDUFA date for Ruconest
Meanwhile, Salix and its partner Pharming just announced that the FDA has extended the Prescription Drug User Fee Act (PDUFA) Action Date to July 16, 2014 for the company's biologics license application (BLA) for Ruconest, a treatment for acute angioedema attacks in patients with hereditary angioedema (HAE). Salix gained the drug via its acquisition of Santarus last year.

HAE is a rare genetic disorder that causes attacks of uncontrollable swelling, which can be fatal if the respiratory system is affected. There are currently four approved HAE treatments in the U.S. -- Shire's Cinryze and Firazyr, Dyax's Kalbitor, and CSL Behring's Berinert. Of these four drugs, only Cinryze, which Shire acquired through its acquisition of ViroPharma, can be used as a preventative measure, whereas the other three drugs are administered during acute attacks.

Since HAE only affects one in every 10,000 to 50,000 people, the size of the market is fairly limited. Therefore, HAE treatments are very expensive -- Cinryze, for example, costs approximately $350,000 per patient per year. Due to the small size of the market and the existence of four entrenched treatments, Ruconest isn't expected to be a blockbuster. Analysts expect the drug to generate peak sales of $100 million, still providing a slight boost for Salix, which reported $735 million in net product revenues in fiscal 2012.

Ampio announces a new offering of 8 million shares
Last but not least, Ampio just announced that it plans to offer 8 million shares of common stock in a proposed underwritten public offering. The pricing has not yet been announced. That big sale will considerably dilute the 42.1 million outstanding shares of the stock, so investors should expect some price insability.

Ampio's stock has rallied more than 130% over the past 12 months, but the company finished last quarter with only $26.3 million in cash and equivalents. With a negative operating cash flow of $19.1 million, a new offering wasn't a major surprise.

Ampio doesn't have any marketed products, but its two most advanced pipeline candidates -- Ampion for osteoarthritis of the knee (OAK) and Optina for diabetic macular edema (DME) -- show considerable promise. Ampion is currently in phase 3 trials for OAK, and Optina is in phase 2 trials for DME.

Analysts forecast that Ampion and Optina could respectively hit peak sales of $1 billion and $500 million if approved. Optina is notable in the field of DME treatments, since it is an oral drug compared to Novartis' (NYSE: NVS) Lucentis, which is injected into the eye.

One more top stock to watch this morning...
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Leo Sun has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information