2 Biotech Stocks Making Waves

Once again, biotech investors are reminded that a slow day on the markets doesn't guarantee we'll be drama free in the health-care sector. We had several big moves and a few notable headlines grabbing investor attention. Let's dive into two of those stories and highlight key investor takeaways.

Targacept (Nasdaq: TRGT  ) managed to completely roll back yesterday's 11% decline, which happened when its ADHD drug candidate TC-5619 didn't pass its phase 2 trial. Adam Feuerstein of The Street noted that the support came from institutional buyer and major shareholder Fidelity. TC-5619 might not work for ADHD, but it may for schizophrenia and Alzheimer's, two massive markets.

This morning, shares traded for under cash on hand, although for an unprofitable biotech, cash is certainly a moving target. Before investors jump in with real money, though, remember that just because Targacept has institutional support, that doesn't mean its drug will be successful; Alzheimer's is a particularly tough disease to crack. Just ask Elan (NYSE: ELN  ) investors, who lost 15% when bapineuzumab was shelved, or the fact that Eli Lilly (NYSE: LLY  ) climbed 3% even as its drug, solanezumab, failed both phase 3 trials simply because it had a hint of efficacy.

Arena Pharmaceuticals (Nasdaq: ARNA  ) added another 7% to yesterday's 3% gain, despite the news that rival obesity drug Qsymia by Vivus (Nasdaq: VVUS  ) was commercially available. Having a competitor beat you to market is generally a bad thing, but this was widely expected, since Arena's Belviq is tied up in the DEA classification process. Besides, Belviq will be on the market soon enough, and the winner won't be decided in the first few months. Arena's rise this week is probably just momentum behind both obesity-drug makers, but at these lofty levels, a stumble by either one on launch could dampen enthusiasm for the space.

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Read/Post Comments (4) | Recommend This Article (2)

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  • Report this Comment On September 18, 2012, at 11:47 PM, genesis667 wrote:

    Lofty levels....Yeah, sure!

  • Report this Comment On September 19, 2012, at 1:22 AM, Foreeverlong wrote:

    David,

    I really don't think that Arena is going to stumble with Belviq. All inidcatons are that the drug will be well-recieved by the medical community (physicians) as a safe and efficacious drug.

    I am sure that others who follow Arena will be more than willing to provide you with the details, if you don''t have them , as to why Belviq will be so successful as a multi-purpose purpose drug that will treat both obesity and type II diabetes.

  • Report this Comment On September 19, 2012, at 7:19 AM, MRJOSEPHD wrote:

    $9.25/share is cheap ahead of DEA classification and launch. Strong Buy

    Belviq v. Qsymia

    But since you brought up the subject, let me tell you the facts:

    1. Belviq actually has 8% efficacy versus 10% Qsymia if you properly account for the dropouts in the Belviq clinical trials. The FDA approved Belviq because it is safe, effective and good quality. This is the FDA's job.

    2. Belviq is much safer by miles.

    3. Belviq is available through the usual and customary channels.

    4. Qsymia is available through mail order with significant prescription restrictions.

    5. Qsymia has potential patent issues which if I were a lawyer for the patent claimants I would be able to present a strong case based upon existing patent law.

    6. Qsymia still has clinical study results to show. Where are they and what do they say?

    7. Qsymia has CVOT studies.

    8. Qsymia does not have any partner anywhere in the world.

    9. Qsymia has a problem with approval in Europe because of the phentermine ban in the UK.

    10. Belviq's biomarker improvement is superior. Please review Belviq's Bloom-DM. This is where the two drugs significantly diverge. This may not be important to lay people but the physician who knows what this actually means to the overall health of the patient will opt for Belviq over Qysmia any day of the week.

    11. For the reasons I have stated in my article with all the research linked via hyperlink the choice is easy - BELVIQ is the blockbuster single-agent drug using revolutionary technology!

    Case closed. I have always believed the truth shall set you free.

  • Report this Comment On September 19, 2012, at 3:52 PM, bhasa04 wrote:

    Belviq (Lorcaserin) weight-loss clinical trial patient Ed Susman (who is a MedPage reporter in real life) lost 55 lbs in one year.

    His weight went from 293 to 238 lbs, that is 55 lbs. In other words, he lost 18% of his body weight.

    The low 3% weight loss number often quoted by "Experts" is nonsense. This drug will be a blockbuster once people start realizing the amount of weight they can lose without major side effects

    http://www.medpagetoday.com/PrimaryCare/Obesity/33723

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