Danny,
It certainly looks like Biotech stocks are again the place to be invested; especially ones from San Diego, according to the following article: I think EXTI should do everything it can to be part of this month's San Diego Biomedical Conference, What do you think? Look at how much some of the stock prices of these other companies have risen. GO EXTI! Shawn
While technology stocks soared stunningly last year, something extraordinary was happening under the radar: Biotechnology quietly returned to favor with silicon-weary investors. Biotech initial public offerings meet eager acceptance and stock values are rising in already public companies.
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The biotech resurgence has hit San Diego full force, with many once-languishing stocks surging. From January 1999 to last month, Nanogen has risen from less than $5 per share
to more than $30 per share; Corvas and Alliance Pharmaceuticals both climbed from about $3 per share to more than $9. Top rebound honors go to Amylin Pharmaceuticals
Inc., whose stock rose from less than 70 cents to nearly $12 per share.
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There have been a few setbacks, too, such as a clinical trial failure in December for Isis Pharmaceuticals that caused its stock to lose 65 percent of its value in one day. But these disappointments didn't cause a general sell-off in the sector, as they might have a few years ago. Instead, investors rallied around stocks such as Maxim Pharmaceuticals, which skyrocketed from under $8 per share in September to nearly $40 by late January. The catalyst was continued good news for its anti-cancer drug Maxamine, which may rewrite the books on immunology if it successfully completes clinical trials this year. Meanwhile, Isis is preparing other shots at the brass ring with its "antisense" technology and can't be counted out.
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Paradoxically, biotech success presents a new set of problems for San Diego -- the problems of how to provide big-city infrastructure in what in some ways is still a small town at heart. In the near term, San Diego's biotech outlook is strongly positive, like that of the rest of the country, industry leaders say.
ÿÿÿÿBacked by this comforting trend of resurgence,nine San Diego biotech and biomedical companies will present their stories this month at the San Diego Biomedical Conference hosted by local stock guru Bud Leedom. The companies: Alliance Pharmaceutical, Biosite Diagnostics, Collateral Therapeutics, Corvas International, Idec Pharmaceuticals, Isis Pharmaceuticals, Quidel Corp., Synbiotics Corp and Women First Healthcare Inc. Local
biotech veterans say part of the rebound comes from investors looking for new opportunities in an undervalued sector. But biotech companies also have made real progress in meeting their goals, says William H. Rastetter, Idec's president, chairman and CEO.
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"The biotech industry is stronger today than it was two years ago. It was stronger two years ago than it was five years ago, and it was stronger five years ago than it was 10 years ago," Rastetter says. Companies have a far sturdier scientific base on which to research new products, and the U.S. Food and Drug Administration has become more of a partner and less of an adversary in getting new drugs to the market.
ÿÿÿÿIdec is the top star in San Diego's biotech firmament: It developed the blockbuster drug Rituxan for non-Hodgkin's lymphoma ($72 million in sales for the last quarter of 1999). Idec is now preparing to introduce an even more potent treatment for the disease, Zevalin. With a stock that topped $120 per share in early January, Idec's total market capitalization -- the total value of all its stock -- has exceeded $5 billion.
ÿÿÿÿIf anyone should be optimistic about San Diego biotech, it should be Rastetter, long active in promoting the local industry. However, Rastetter says he is growing more worried
about San Diego's viability as a biotech stronghold. The area's inability to provide the infrastructure biotechs need once they reach the manufacturing phase could lead them to
expand elsewhere.
ÿÿÿÿWhile biotechs were struggling to keep drug development going, that was not an issue, but with success the need to look to the future becomes more pressing. Rastetter cites the huge success of North Carolina's Research Triangle Park as an example of how good planning and infrastructure can nurture a huge biomedical and high-tech cluster. San Diego
has not had this planning. He warns that the area's traditional strategy of relying on the scientific prowess of UCSD, Scripps and Salk won't be enough. Once product
development moves out of the research stage other necessities come to the fore.
ÿÿÿÿ"We need a guaranteed supply of water, brine lines, other utilities and space to expand. Our plants have to be designed with overcapacity from the day they open (to allow for expansion)," Rastetter says. A high technology park with those amenities has been proposed for San Diego. However, a feasibility study needs to be done first, and no agency has volunteered to pay the $150,000 needed. Affordable land is available in the South County area; some have also suggested Temecula. But in biotech-speak, the idea hasn't gotten out of R & D and into the clinic.
ÿÿÿÿ"The problem is a lack of will," Rastetter says, and a lack of vision, too, to see how San Diego might look 20 or 30 years down the road, and the patience and tenacity to build toward that vision. That's not to say everyone lacks the will or vision, Rastetter adds. At the San Diego Regional Economic Development Corp, Julie Meier Wright is trying to find funding for the study.
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ÿThe Comeback Kids
ÿÿÿÿMerely listing the jump in local biotech stock prices makes it seem effortless, a simple decision by investors to find new opportunities. But the biotech companies say the real story is one of steady, incremental progress in advancing their core technologies and exploring new market opportunities. At some point, the financial community gets a whiff of the change and starts to give a once-ignored company a more serious look. That's the story with Corvas International. There has never been any doubt that the company's research into cardiovascular products is focused on large markets with potentially big returns. Its scientists got headlines for their creativity in discovering an anticoagulant in blood-feeding hookworms, theorizing the compound could be transformed into a drug. However, over the years Corvas became stereotyped as a "research boutique" that could never quite focus on development and commercialization, says Randall E. Woods, Corvas
president and CEO.
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Woods changed that, focusing attention on developing Corvas' oral and injectable anticoagulants, but also by bringing in a very respected investor, Stefan Engelhorn, one of the former owners of the German pharmaceutical giant, Boehringer Mannheim, now part of The Roche Group. Engelhorn joined three other investors in plunking down $15 million.
That's not a large amount of money as investments go, Woods concedes, but the presence of Engelhorn, and the favorable terms of the investment for Corvas gave other investors
confidence in the company.
ÿÿÿÿAlso, in December Corvas got an unexpected bonus: corporate partner Schering-Plough Corp. agreed to renew its longstanding collaboration to develop oral anticoagulants, giving Corvas $3 million to fund the work until December 2000. In December 1998, Corvas started a Phase II clinical trial of an injectable anticoagulant to prevent deep vein thrombosis. The anticoagulant is a recombinant protein called rNAPc2 that is the analog of the anticoagulant found in the hookworm.
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ÿMeanwhile another corporate partner, Pfizer, is conducting a Phase II trial of a drug Corvas researched to treat ischemic stroke.
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ÿCorvas has leveraged its cardiovascular expertise into the anticancer field. An enzyme similar to one that works in the blood "coagulation cascade" has been found to play a role
in the spread of cancer, called metastasis. Corvas is working on an inhibitor of this enzyme, called Urokinase Plasminogen activator.
ÿÿÿÿAlliance Pharmaceutical has been on the biotech
roller coaster for years, with its stock price rising and
falling while the company kept to a steady strategy of
developing from the same technological base a family of
oxygen-carrying products for cardiovascular and pulmonary uses; and developing imaging contrast agents.
ÿÿÿÿTed Roth, Alliance's president and chief operating
officer, says the progress at Alliance and many other
biomedical companies had been "virtually ignored for
the last year or two," until the fall of 1999. "Nobody
seemed to care."
ÿÿÿÿOne factor hurting Alliance was a legal dispute with
its former partner, Hoechst Marion Roussel Inc. That spat was settled in September, and the stock began rising from under $4 per share to more than $9 a share in January. On Dec. 1, Alliance reported progress in a Phase III trial of its Oxygent temporary blood substitute and on Dec. 14, Alliance reported that the FDA had accepted for review its New Drug Application to approve Imagent, its ultrasound contrast agent.
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As a private company, Applied Molecular Evolution doesn't have to worry about a stock price -- yet. The biotech formerly known as Ixsys is concerned about advancing and
protecting technology it has licensed in the hot field of directed evolution.
ÿÿÿÿTaking its cue from Charles Darwin's great discovery of evolution through natural selection, Applied Molecular Evolution uses mutation and artificial selection to mold what appears in nature into forms that fit human needs. The process quickly creates randomly varying types of a specific protein, selects the variants that most closely match a
pre-determined function, then cycles the second-generation products back through the loop. The end result is a protein-based drug that can be more than a hundred times as
potent, stripped of unwanted side effects. For example, an antibody derived from an animal can be "humanized" so it won't be neutralized by the human immune system.
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Molecular evolution is the opposite of earlier attempts to precisely engineer a drug to a molecular target by understanding its structure down to the atomic level. Molecular Darwinism doesn't require that degree of precision: chance, guided by a human hand, comes up with the answer. Applied Molecular has worked for years improving target molecules for Bristol-Myers Squibb as the pharmaceutical company researches new drugs for cancer, and more recently in a February 1999 deal with MedImmune to develop monoclonal antibodies. But much more is possible with the technology, says Larry Bloch, Applied Molecular's vice president of business development.
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ÿÿ"Our technology platform is so powerful that we can take an existing marketed and approved therapeutic and come out with a more potent therapeutic," Bloch says. The result
is a new drug that qualifies for another patent, serving the needs of patients for a better drug as well as the company's financial interests by forestalling generic competition. That's the goal of the company's new Phase IV division. The company is also looking to expand into industrial processes by producing enzymes used in manufacturing.
ÿÿÿÿThe company got its technology in 1995 through an exclusive worldwide license of the discovery by two scientists, Marc Ballivet and Stuart Kauffman. The patent embodies broad claims for methods of generating "libraries" of DNA, RNA, protein and peptide molecules, and how to identify molecules that are linked with specific biological activities.
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ÿHowever, a Redwood City company, Maxygen, went public last year on the strength of its own directed evolution technology. When asked how that was possible, Bloch replied,
"That's a good question." Applied Molecular's attorneys are now researching that question, Block adds. Hmmm. Patent wars. That's a sure sign of an industry with a lot of value to protect.
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