There are a finite number of biotech companies developing drugs. I know of about 250 or so that trade on one of the major U.S. exchanges. This universe of biotechs slowly churns as the big drug companies pick off some of the more promising prospects, such as Ilex Oncology
Within the past few months, a number of these private biotechs have gone public. This is exciting since it provides the opportunity to take a look at companies that were previously unknown entities. It's almost the investor's equivalent of opening Christmas gifts. Perhaps even a select few of these companies will move on to become notable leaders in the future.
I am going to review eight of these IPO companies over the next two articles. Today, I'll cover the first four, and next week's article will have the second batch. When I was looking into these companies, I was pleasantly surprised at the overall quality. I wasn't sure how mature they would be, but in fact some of them are closer to a real product than many public biotechs have been for years. The general theme among these eight companies is an emphasis on late-stage product development, otherwise known as having a business model.
Hepatitis or bust
Anadys' lead drug for hepatitis C is Isatoribine, a drug that activates the immune system and, hopefully, will result in an enhancement of the body's ability to eliminate the virus. It should be noted that drugs currently used to treat hepatitis C work indirectly though the immune system and do not directly target the virus itself. Isatoribine is in early clinical trials, so it will be some time before there is sufficient clinical data available to assess the product.
The hepatitis B program seems to be a little further along in clinical development with the drug LB80380 in phase 2 trials. This is a drug that Anadys intends to license from a Korean biotech called LG Life Sciences. Early clinical data was presented at a scientific meeting last December.
Cancer treatment hopeful
Canvaxin is pretty far along in clinical development, with two phase 3 trials in patients with ongoing melanoma. The goal of these trials is to see if Canvaxin can increase survival in patients with advanced melanoma who have had their tumors surgically removed.
In drug development terms, the timeline for finding out whether or not Canvaxin works should not be that far off. The first phase 3 trial should have all of the patients enrolled this summer, and the second trial will be fully enrolled in about a year. Retrospective analyses -- which should not be considered very rigorous -- of the phase 2 data suggest that Canvaxin does indeed increase patient survival, so it will be interesting to see if this effect is confirmed in prospective phase 3 studies.
In addition to melanoma, the company is also designing a pivotal phase 2 trial of Canvaxin in the treatment of advanced colorectal cancer. This trial is scheduled to start this summer.
Vision of the future
AMD is the leading cause of vision loss and blindness in patients over 50. Growth of abnormal blood vessels in the retina is the cause of this disease. The vessels leak fluid and cause scar tissue that result in deterioration of sight. Macugen can potentially treat this disease, as it is designed to block the function of vascular endothelial growth factor (VEGF). VEGF is known to play a role in blood vessel growth. Perhaps by blocking this activity with Macugen, the abnormal blood vessel growth in AMD can be halted, preventing blindness from occurring.
I'd like to note that this drug is administered through an injection directly into the eye. I can't imagine many experiences worse than a poke in the eye, but since going blind is no fun either, this is probably OK.
If Macugen is approved, it would be competing with Visudyne from QLT
Estrogen's many possibilities
Acapodene is in a phase 2b trial for reducing the risk of prostate cancer in men who have precancerous lesions of the prostate. Patients with these lesions have a high risk of developing prostate cancer. The goal of this study is to see if blocking the effect of estrogens in the prostate will decrease the rate at which these men develop prostate cancer. This study is expected to finish soon.
In November 2003, GTx initiated a pivotal phase 3 trial of Acapodene in the treatment of side effects from androgen deprivation therapy. Testosterone is known to stimulate the growth of prostate cancer cells, so drugs such as Abbott Laboratories'
Charly Travers is this month's guest analyst in Motley Fool Hidden Gems. Get your free trial now. Share your thoughts on these companies -- and any other biotech issue -- on our Biotechnology discussion board. And look for more biotech IPOs in part two of this article next week.