5 One-Drug Wonders Going for No. 2

A biotech that goes from zero drugs to one drug on the market is huge. Having revenue, any revenue, is the lifeline for profitability.

But then what? One drug doesn't make a successful biotech, and a post-launch slowdown is inevitable eventually. To keep the growth story alive, one-drug wonders have to have a second hit. No one wants to be the next Baha Men. Who? you ask. They released "Who Let the Dogs Out" in 2000, never to be heard of in the mainstream again.

Here are five drugmakers hoping not to follow a similar fate of the one-hit wonders they resemble.

"Whip It" by Devo
After a disappointing launch of its prostate-cancer treatment Provenge, Dendreon (Nasdaq: DNDN  ) needs to whip it into shape, shape it up, get straight, go forward, move ahead.

The biotech looked to be on task to have a quick blockbuster -- it was guiding for sales of at least $175 million in the fourth quarter -- but after picking up capacity, the drug sales didn't follow suit.

Picking up Provenge sales is important, but getting a second hit might be what it takes to get investors interested again. Provenge is a novel technology that trains the immune system to attack the cancer. Despite the positive phase 3 trials, there are still investors -- and probably some doctors -- that don't believe it's real.

Getting positive trial data for DN24-02, its immunotherapy for treating HER2 positive tumors, would be a step in the right direction. Dendreon just enrolled the first patient into a phase 2 trial for DN24-02 earlier this month, so we'll have to wait awhile to see whether Dendreon can have a second hit.

"I'm Too Sexy" by Right Said Fred
Elan's (NYSE: ELN  ) blockbuster multiple sclerosis drug, Tysabri, and its pipeline of drugs were apparently just too sexy for its drug-formulation business. The biotech sold Elan Drug Technology to Alkermes earlier this year.

Left with just the neurodegenerative and autoimmune business, its Alzheimer's disease treatment bapineuzumab is Elan's next chance at a blockbuster. Elan had been working with Wyeth, which then became Pfizer (NYSE: PFE  ) , on the drug and subsequently turned over development to Johnson & Johnson. At this point, Elan owns about a quarter of bapineuzumab, but if it's a hit, it'll probably be a multibillion-dollar drug, so 25% is worth another little turn on the catwalk.

"I Wanna Be Rich" by Calloway
Suing your marketing partner isn't necessarily advisable, unless of course it'll make you rich. Onyx Pharmaceuticals (Nasdaq: ONXX  ) sued Bayer for a share of its regorafenib, claiming that it was too similar to the duo's current cancer treatment Nexavar. The sides eventually settled, and last week Bayer announced positive phase 3 data for the drug, which Onyx will get a cut of.

The biotech also has another cancer drug, carfilzomib, which it recently submitted to the Food and Drug Administration for approval. In short order Onyx could go from one drug on the market to three. That's one way to get rich.

"Nothing Compares 2U" by Sinead O'Connor
Vertex Pharmaceuticals
' (Nasdaq: VRTX  ) new hepatitis C drug Incivek is flying off the pharmacists' shelves. Nothing, including Merck's new treatment Victrelis, compares -- at least not yet. There are plenty of combination treatments being developed by a variety of players hoping to top Incivek. To compete in the future, Vertex has to develop a combo treatment of its own.

Before that, though, Vertex will hear about its cystic fibrosis treatment Kalydeco, which it submitted to the FDA this month. Considering the data to date and the unmet need, an approval next year seems extremely likely. Kalydeco treats only a small subset of cystic fibrosis patients, so it remains to be seen whether its launch can compare to Incivek.

"Don't Worry, Be Happy" by Bobby McFerrin
Since the launch of Momenta Pharmaceuticals' (Nasdaq: MNTA  ) generic version of Sanofi's Lovenox, investors in the biotech have had plenty to worry about. Whether it was a generic from another player or an authorized generic from Sanofi, competition was inevitable.

Sanofi recently cut into its sales with the launch of an authorized generic, and Amphastar Pharmaceuticals and Watson Pharmaceuticals have gained approval for their generic version but they haven't launched it yet because Momenta sued to stop their sales. More worrying.

Fortunately, Momenta investors do have something to be happy about: Generic Lovenox isn't Momenta's only iron in the fire. It has a generic version of Teva Pharmaceuticals' (Nasdaq: TEVA  ) Copaxone ready to go as soon as the patents on the drug are worked out.

"I'll Be There for You" by The Rembrandts
If you want to keep track of any of these biotechs as they go for hit No. 2, add them to the Fool's watchlist service. Add all five, or add them individually below.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries, Johnson & Johnson, Momenta Pharmaceuticals, and Dendreon. Motley Fool newsletter services have recommended buying shares of Vertex Pharmaceuticals, Johnson & Johnson, Pfizer, Elan, Momenta Pharmaceuticals, and Teva Pharmaceutical Industries, as well as creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. 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.


Read/Post Comments (4) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 31, 2011, at 11:10 PM, bellbell63 wrote:

    A wise broker once told me the way to invest in developmental drug

    1. Buy 5 different ones

    2. Wait 10 years

    3. Hope on of the 5 is successful to make up for the 4 other failures

  • Report this Comment On October 31, 2011, at 11:12 PM, bellbell63 wrote:

    Typo Corrections:

    A wise broker once told me the way to invest in developmental drug companies:

    1. Buy 5 different ones

    2. Wait 10 years

    3. Hope one of the 5 is successful to make up for the 4 other failures

  • Report this Comment On November 01, 2011, at 5:39 AM, dendreon wrote:

    Dendreon has several "drugs" in the pipeline for treatment of various cancers. Their knowledge base is growing in a one-of-a-kind FDA approved treatment with Provenge. The other successes will build on the same propietary knowledge and relationships developed throughout the onocology community. It's been a tough road for the last five years but things are picking up steam and having revenue is a giant leap forward for Dendreon.

    I'm bullish. Oh, and don't forget international growth to follow each of these new drugs.

  • Report this Comment On November 01, 2011, at 6:50 AM, ICanFool wrote:

    "Despite the positive phase 3 trials, there are still investors -- and probably some doctors -- that don't believe it's real."

    What a negative spin!!!

    State the facts. The " active cellular immunotherapies (ACIs) " technology will prevail for other cancer treatments as well. Competition ?

    FDA balks at this "go fast" approach to cabozantinib approval -- and Monday's announcement certainly suggests FDA opposition to this plan -- Exelixis will have to wait for results from a larger, follow-on phase III study in prostate cancer that will seek to prove cabozantinib can prolong survival.

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