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Fearless Football and Biotech Picks For Fall 2012

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Infinity Pharmaceuticals (NASDAQ: INFI) will be this year’s comeback story. Infinity has seen its share of adversity, as its stomach cancer drug flunked a final-stage clinical trial three years ago, and its pancreatic cancer drug candidate failed in a mid-stage clinical trial in January. But Infinity, led by CEO Adelene Perkins and R&D chief Julian Adams, has regrouped. It has amended its partnership with Purdue Pharma and Mundipharma to get back the worldwide rights to its PI3 kinase inhibitor program, made some R&D spending cuts to preserve its cash, raised another $88.4 million, and renewed some enthusiasm on Wall Street. Still, the PI3 kinase field is crowded and competitive, and it’s unclear yet what advantage Infinity might have. But Adams is known for his work developing bortezomib (Velcade) which is now a billion-dollar blockbuster for Millennium: Takeda, so it would be foolish to count him and his team out.

The Baltimore Ravens Defensive Team of the Year. Last year I gave this award to the FDA division that reviews obesity and diabetes drugs, for setting up what looked like impossibly high hurdles for drugmakers in this field. The Ravens remain tough, but the FDA softened up a bit last year, and allowed Arena and Vivus to reach their goals of getting cleared for sale in the U.S. The defensive award this year goes to Thousand Oaks, CA-based Amgen (NASDAQ: AMGN), for its uncanny ability to defend its existing franchise drugs. Last November, it was awarded a new patent on its blockbuster autoimmune drug etanercept (Enbrel) that allows the company to keep direct competitors off the market until 2028. The old patent would have allowed competitors to flood the market as soon as 2013. This past week, the FDA approved a “biosimilar” drug from Teva Pharmaceuticals that competes with Amgen’s pegfilgrastim (Neupogen) to help cancer chemotherapy patients fight off infections. But Amgen has a deal with Teva that keeps the biosimilar off the market until November 2013—plenty of time for Amgen to get even more patients taking a patent-protected longer-lasting version of the drug called Neulasta. And even though the EPO franchise is limping along on bad knees, those products still generated more than $2 billion in worldwide sales in the first half of 2012.

The Tony Romo Bust of the Year. The Dallas Cowboys’ quarterback is overrated, and tends to play his worst when it matters most. Last season, I picked Seattle-based Dendreon (NASDAQ: DNDN) as the bust of the year and it takes home the prize once again. The company had a golden window of opportunity to build a great cancer drug company in 18-month period following FDA approval of its trailblazing immunotherapy for prostate cancer. But it fumbled. Competitors have exploited that opening, and while Dendreon has overhauled its management, it could be too little too late. Dendreon’s market value now stands at about $680 million, a long way from the days of $5 billion-plus valuations it enjoyed in 2010 and 2011. Tough new competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s enzalutadmide (Xtandi) are on the march. Dendreon’s dreams of going to the Super Bowl of drug marketing, just like Romo’s dreams of winning the big game, appear to have little chance of materializing.

Wes Welker Overachiever of the Year. This honor went to Berkeley, CA-based Plexxikon last year for its breakout performance with a new melanoma drug. This year, it goes to South San Francisco-based Onyx Pharmaceuticals (NASDAQ: ONXX). Onyx has long had ambitions of going from a one-drug company to a two-drug company—the traditionally necessary step for long-lasting success in biotech. Onyx surprised many analysts by reaching that goal faster than expected, winning FDA approval of its second drug, carfilzomib (Kyprolis) for multiple myeloma. But an even bigger surprise came when it settled a long-running dispute with its partner, Bayer, and agreed to take a $160 million payment and a 20 percent royalty on future sales of another cancer drug, regorafenib. Days after that settlement, Bayer reported that the drug extended lives of colon cancer patients (albeit modestly), and it later showed strong results for gastrointestinal stromal tumors. It all means that Onyx is likely to leapfrog from a one-drug company into a three-drug company in short order. Like Welker, who finds a way to get open downfield when others can’t, Onyx found a path to success that few others in biotech have ever been able to find.

Russell Wilson Rookie of the Year. As a lifelong Wisconsin Badger fan, I concluded last year that Russell Wilson was the best quarterback in school history and could be the best quarterback to come from the Big Ten since Drew Brees. When the Seahawks stole him in the third round of this year’s NFL draft, I told a sportswriter friend that Wilson has amazing poise under pressure, football IQ, leadership ability, a great arm, and athletic ability. The only thing he lacks is height, and I don’t believe that’s going to stop him from becoming a star. I see similar qualities in San Francisco-based Medivation (NASDAQ: MDVN). Like Wilson, this company is frequently overlooked in favor of companies with more flashy stories. But Medivation just quietly goes about its business, nailed its pivotal clinical trial, and won FDA approval for its first cancer drug about three months ahead of schedule. Given the faster-than-expected approval—which is almost unheard-of—you might expect some operational stumbling out of the gate. After all, sales reps need to be trained, manufacturing inventory needs to be built up, doctors need to be informed. But listening to Medivation CEO David Hung on a conference call with investors, I get the feel that while this guy lacks cover-boy charisma, he’s got his act together, and a winning team behind him.

Aaron Rodgers Most Valuable Player. The quarterback for the Green Bay Packers, my favorite team, had an amazing MVP season last year with 45 touchdown passes and just six interceptions. Last year, this honor went to Vertex Pharmaceuticals for its successful introduction of its hepatitis C drug, and for gearing up for the successful rollout of its truly groundbreaking cystic fibrosis drug. This year’s honor goes to Tarrytown, NY-based Regeneron Pharmaceuticals (NASDAQ: REGN). The company has had a breakout year, starting with its stock at about $56 a share, and closing Friday at $148.05. This antibody drug developer has grabbed a huge share of the market for macular degeneration drugs almost overnight with afilbercept (Eylea). Along with its partner, Sanofi, Regeneron has impressed scientists and physicians with its anti-PCSK9 antibody for lowering cholesterol. And it won an FDA approval this year for ziv-aflibercept (Zaltrap) as a cancer treatment. It threw one interception in late July when the FDA turned down its application for a gout drug, but with this many wins in a row, fans of Regeneron have nothing to complain about.

Tom Coughlin Coach of the Year. The New York Giants were not a popular pick to win the Super Bowl last season, but Coughlin coaxed his team played its best when it mattered most. Last year this went to Biogen Idec CEO George Scangos as he helped the venerable biotech company get its mojo back. This year, the honor goes to Illumina CEO Jay Flatley. Illumina (NASDAQ: ILMN) faced a mortal threat earlier this year when Roche made a hostile takeover bid for the market-leading maker of genome sequencing instruments. Flatley led the effort to reject the low-ball bid. He successfully argued to shareholders that Illumina could create more value as a focused independent company than it could as a division of a global healthcare colossus with scientific instruments, diagnostics, and drugs all competing for resources under one roof. Illumina hasn’t won the Super Bowl yet, and it has a problem with stagnant revenues, but it also shows huge potential as we head into the era of the $1,000 genome. Flatley’s resolve in facing down Roche is the kind of inspired move that I suspect will lead the company to much greater things.

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  • lebronz

    Guess that means you and your buddy Mr. Loncar are definitely buying DNDN shares now yes..? Cool! I’m in too!
    Good luck sir!