5-Star Stocks Poised to Pop: Exelixis

• Report this Comment On November 24, 2008, at 12:07 PM, Buffetisbest wrote:

  Just one question, how can this company be a five star stock and people think that it will outperform the S&P when it is expected to lose $1.59 per share next year?

• Report this Comment On November 24, 2008, at 7:50 PM, GoNuke wrote:

  Dear Buffetisbest

  Human knowledge grows exponentially. At this point in history we are at the point in the curve where it is starting to turn upward quickly. The advances in research techniques available to people studying the human system have advanced very quickly in the last 2-5 years. Scientific research is leaving the practice of medicine behind. Exelexis is applying this new knowledge to develop compounds that have a greater chance of success because they target specific biochemical pathways that have only recently been discovered. This is a far cry from the old shotgun approach to developing new medications employed by big Pharma in the past.

  Exelexis business model is to keep abreast of the breaking news regarding biochemical pathways involved in disease and developing compounds that interfere directly with those pathways. This means that they are likely to have a higher success rate with respect to developing drugs that work.

  Last year it would have cost you $1 million to have your entire genome sequenced. Next year it will cost $5,000. This means that large numbers of people with a particular disease can have their full genomes sequenced by researchers and have these genomes compared to healthy control groups. Genes that are common to the ill group that are not common to the control group become targets for research. We can, of course, reproduce the proteins coded for by the suspect genes than use modern bioassay techniques to find out what these proteins do and what pathways they are involved in. This leads to new targets for drug development. In essence researchers discover the actual chemical process that manifests as the disease before developing a compound that will interfere with that process.

  The human system used to be a black box. Now it is becoming less opaque at a fantastic rate.

  Recently some researchers sequenced the genomes of 200 people with Schizophrenia and compared them with full genomes of people without Schizophrenia. For years medical researchers have been looking for "the" gene that causes Schizophrenia with no success. This recent study suggests there are about 500 genes involved. Now we can go after all of them knowing that the answer is somewhere in those 500 genes. As it turns out one of the biochemical pathways that becomes dysregulated in schizophrenia is the same one that becomes dysregulated in the most common forms of breast cancer. The one operates in the prefrontal cortex of the brain and the other in the breast. Once the pathway governing cognition was discovered the researchers could go to the nearest pharmacy and get some Tamoxifen -an existing FDA approved medication for treating breast cancer, and give it to people experiencing psychosis. The result: Tamoxifen shut down the psychosis in most of the subjects in about a week. Tamoxifen turns out to be a powerful antipsychotic medication.

  As more biochemical pathways are figured out I am willing to bet that many compounds that failed phase III clinical trials because they were not effective treating their intended ailment will be revived to treat other ailments.

  I just doubled my investment in Exelexis. Unlike Warren Buffet I am reaching a point where I can understand pipelines. I just wish the medical profession did.

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