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4 Stories to Watch This Week in the Health-Care Sector

By Sean Williams - Dec 16, 2012 at 12:00PM

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Don't adjust the TV channel until you've seen what these four companies have in store this week!

As we approach the end of the year and investors' focus shifts to the looming fiscal cliff and Christmas present purchases, news in the health-care sector is getting scarce. Still, I've dug up four newsworthy stories that should keep your attention in the upcoming week.

On tap near the end of the week are two FDA-inspired stories: an FDA panel review of Hemispherx BioPharma's (NYSEMKT: HEB) Ampligen, and an FDA decision on Alexza Pharmaceuticals' (NASDAQ: ALXA) Adasuve.

Hemispherx is slated to go before the firing squad on Thursday for its chronic fatigue syndrome, or CFS, drug, Ampligen. It hasn't been an easy road for Hemispherx, which received a complete response letter in late 2009 requesting it run additional trials. New data published in late 2010 demonstrated that the drug caused people with CFS to use less concomitant medications versus the placebo. More recently, a peer study in March of this year determined that those patients with exercise improvements of 25%-50% increased 1.7 to 1.9 times as much as the placebo. With no FDA-approved drug on the market to treat CFS, this will be a panel meeting to watch closely. 

For Alexza, it's judgment day (again!) for Adasuve, its drug to treat agitation associated with schizophrenia or bipolar disorder in adults. This is actually a new drug application resubmission for Adasuve, which the FDA rejected in May because of manufacturing deficiencies. The application was resubmitted to the FDA roughly one month later. Alexza has been trying to get its inhalable compound approved for the better part of three years now but has seen countless delays from the FDA, and now manufacturing deficiencies slow things down. Look for the FDA's decision by Friday. 

It may be late in the year, but investor conferences are still worth keeping an eye on. Between Dec. 15 and Dec. 19, the American Society for Cell Biology, or ASCB, will be holding its annual meeting in San Francisco. Although an ASCB conference isn't going to move the sector by itself, it's worth watching some of the genome sequencing and instrumentation suppliers who'll be attending the event, including Life Technologies (NASDAQ: LIFE) and Qiagen (QGEN 0.77%). Testing and research devices are growing cheaper in recent years, which could lead to a surge in demand (as well as turnaround time) for these presenting companies.

Finally, we have a late-season earnings report from diagnostic testing company Neogen (NEOG 0.12%). Neogen makes diagnostic test kits for the food industry, while its animal safety segment makes everything from pharmaceuticals to veterinary instruments. Apparently it must be doing something right, as it reported record first-quarter revenue and income in late September. Don't be fooled, however, as Neogen is valued at a frothy 36 times forward earnings despite a rich history of growth. Having missed Wall Street's EPS projections in two of the past four quarters, it'll need a very strong report to maintain its current valuation.

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