We biotech investors are generally an incredibly patient group, often waiting out the lengthy clinical trials required to get drugs approved by the FDA. But even though we're used to waiting years for these stories to play out, it's nice to find biotechs with near-term catalysts that could increase the value of the company in a much shorter period of time.
While it's usually not a good idea to make too aggressive a prediction of what the FDA will do, there's a lot of evidence to support this position. Thelin has a very compelling clinical-data package. In a phase 3 trial, Thelin was compared head-to-head with the market leader, Actelion's Tracleer, and the results were very favorable. Thelin had a modest edge in efficacy, but clearly came out on top in the safety profile with a much lower incidence of liver-function abnormality.
Tracleer is currently a $400 million-a-year drug and Actelion's management expects it to become a $750 million product. I think Thelin is going to take away a big chunk of these sales because it's simply a better drug. Even with Pfizer's
Encysive's stock has doubled in the last year, but I think it's got a lot of room left to run. For continuing coverage of Encysive and other companies in the biotech universe, take a risk-free trial to Motley Fool Rule Breakers.
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Pfizer is a Motley Fool Inside Value pick.