Biotech and Fantasy Football Picks for Fall 2013
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Cambridge, MA-based Foundation Medicine. This company uses the tools of fast/cheap gene sequencing to find the particular genetic abnormalities driving an individual patient’s cancer. Knowing this information, doctors can prescribe a targeted drug they might never have thought to give before. This push for “clinical genomics” or “genomic medicine” has been building for a while, and Foundation is poised to seize the opportunity. Its challenge will be to persuade insurers to pay for a test that has a list price of $5,800.
The JaMarcus Russell Bust of the Year. It’s a bit unfair to have previously named this award after Tony Romo, because the Dallas Cowboys quarterback had been a solid pro for many years, even if he tends to choke in big games. JaMarcus Russell, the former No. 1 overall pick who flopped as a quarterback for the Oakland Raiders, deserves to be in the conversation with the biggest NFL busts ever, along with Ryan Leaf and Tony Mandarich. Last year’s bust was Dendreon, which I think fairly belongs in any conversation with chuckleheads like Leaf, Mandarich, and Russell.
This year the dubious distinction goes to Cambridge, MA-based Aveo Oncology (NASDAQ: AVEO). This company once appeared to have great promise, as it hit the primary endpoint of a pivotal clinical trial for kidney cancer patients with a product that has a clean profile on safety and convenience. But the company used a flawed clinical trial design that suggested it was a dud on overall survival, and an FDA advisory panel hammered Aveo for this misstep. A predictable series of events ensued, including a partner desertion, executive departures, and mass layoffs. It’s hard to see how Aveo can ever get back on its feet.
The Russell Wilson Rookie of the Year. This was my best football pick last year, hands down. Before Wilson started his first NFL game, I wrote he was destined to become a star. He went on to lead his team to the playoffs, and tie Peyton Manning’s rookie record with 26 touchdown passes. The biotech rookie of the year went to San Francisco-based Medivation (NASDAQ: MDVN), and it didn’t disappoint, either.
There are quite a few promising rookies to choose from in the new biotech class of 2013. I’m going to go with Cambridge, MA-based Epizyme (NASDAQ: EPZM). This is still an early and risky call, and Epizyme will surely endure some hard knocks after an overheated IPO debut. But it has a strong scientific underpinning, good management, solid finances, and a clear development strategy in treating rare forms of cancer.
The Aaron Rodgers MVP Award. The Green Bay Packers quarterback is at the top of his game, and even though I’m biased in his favor, most of the stats say he’s playing quarterback as well as anybody has ever played the position. Last year’s MVP was Tarrytown, NY-based Regeneron Pharmaceuticals (NASDAQ: REGN), which continues to roll. This year, the most valuable player award in biotech is going to the partners at Boston-based Third Rock Ventures.
Third Rock has started to reap the rewards of its early-stage investing strategy, six years after its founding. It raised a new $516 million venture fund to keep starting and aggressively building innovative life sciences companies, at a time when few other biotech VC firms are willing or able to play that game. Early in the year, Third Rock secured a solid return on the sale of Lotus Tissue Repair. This summer, it saw a couple portfolio companies go public—Bluebird Bio (NASDAQ: BLUE) and Agios Pharmaceuticals (NASDAQ: AGIO). Now Foundation Medicine is in the IPO queue for the fall. Surely the firm will have some failures in its portfolio because that’s the nature of early-stage investing. It still needs to prove that its West Coast startups can deliver like those on the East Coast. But Third Rock looks like it’s in position to throw a lot more touchdowns, with not too many interceptions.
Jim Harbaugh Coach of the Year. Harbaugh strikes a lot of people as obnoxious, but it’s hard to argue that he is one heck of a coach. He was a winner at Stanford University, and then turned around a 49ers franchise that bumbled for years before he got there. Harbaugh stuck his neck out last year when he benched a steady veteran quarterback in Alex Smith, in favor of an unheralded young player in Colin Kaepernick. The young guy took the team to the Super Bowl.
John Martin of Gilead Sciences takes home the hardware this year. Actually, he should probably share it with his whole management team, which includes long-tenured operators in John Milligan, Norbert Bischofberger, and Gregg Alton. Martin and Co. deserve credit for sticking their necks out to buy Pharmasset, even though it cost a breathtaking $11 billion. This was a bold strategic move to extend the company’s HIV leadership into another big opportunity in hepatitis C. What fewer people have noticed is that Gilead is finally becoming more than an antiviral company. It has also made a series of shrewd acquisitions to become a serious cancer drugmaker.