SOURCE: Rothman Research

Rothman Research

March 18, 2010 10:06 ET

Biotech Can Still Be Healthy to Investors

JOHANNESBURG, SOUTH AFRICA--(Marketwire - March 18, 2010) - - One of the key drivers boosting demand for biotechnology products and services is the readiness for insurers to disburse funds for innovative therapeutics solutions and treatments. For companies to capture those demands and maximize their profit margins on them, it would generally depend on how they have invested in Research & Development (R&D) and how resourceful their marketing strategies are. What makes this market interesting for small fish sharing the waters with larger pharmaceutical corporate is the fact that there is room for competitive co-existence provided the small companies have the proficiency in a particular field of research. There is just fine line separating biotech and pharmaceutical industries and one could arguably identify the growing similitude between those two industries as more drugs are being created using biotechnology know-how. "The biotech industry is one of the pillar industries savvy investors look forward to invest in," commented Mathew Collier of "However, it is also true that it is a risky venture which often gives way to speculations. The rewards are high if the company you invest on makes it through clinical trials and FDA's strict guidelines." 

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Analysts from have Incyte Corporation (NASDAQ: INCY) and Genzyme Corporation (NASDAQ: GENZ) on their radar. Here are reasons why: Incyte Corp is currently developing the later-stage drug '424, a drug program referred to as INCB28050, or just '050, which has already shown plenty of promise, plus they snugged an SPA from the FDA for the INCB18424 Phase III program. Meanwhile, Genzyme Corp recently declared the publication of phase III data on mipomersen in The Lancet. The data was published from a study that was conducted in patients with homozygous familial hypercholesterolemia (hoFH) and the results from an ongoing phase III study in patients with severe hypercholesterolemia are expected in mid-2010. To download the reports on Incyte Corporation and Genzyme Corporation register now for free at or

With the recent economic downturn, the biotechnology industry has shown only a slump of one third of what the overall market has experienced. Small companies in this sector were the hardest hit due to funding issues and many are on the brink of financial ruin. With these readings, the chances of seeing a number of takeovers and mergers become apparent. Investors are always keen to see a successful merger or acquisition especially in this industry as this allows the smaller companies' shareholders to break a deal or help large corporate increase their product pipeline which can boost their share price. 

Incyte Corporation delivered outstanding fourth quarter results which prove that company has serious growth potential. The company achieved all of their corporate goals in 2009 including the initiation of a global Phase III program for othei lead compound, INCB18424, for myelofibrosis, the completion of a successful corporate financing and the establishment of two major alliances with top-tier pharmaceutical firms. Consequently, they are in a strong position to advance their pipeline and prepare for the potential launch of INCB18424 in myelofibrosis.

While patient enrollment in the phase III trial for INCB18424 is complete in Europe, the US enrollment process is expected to be completed in the first quarter of 2010. Incyte is looking to file a New Drug Application in 2011, provided results from the trials are encouraging.

Genzyme largely develops and markets drugs that treat rare disorders and diseases with significant unmet medical need. The company also has promising drugs in development for cardiovascular and neurodegenerative diseases. But, at present, Genzyme is struggling with manufacturing issues at its Allston plant (viral contamination), which is where its blockbuster drug Cerezyme and Fabrazyme are produced. In June, Genzyme had interrupted production of Cerezyme and Fabrazyme at the Allston plant in Boston to sanitize the facility after identifying a virus in a bioreactor used for Cerezyme production. Additionally, the company has also had to overcome significant regulatory hurdles to have its potential blockbuster drug Myozyme approved through a larger manufacturing process. These setbacks have collectively resulted in company's weak results for the fourth quarter. Fourth-quarter earnings dropped 73% because of manufacturing problems that the maker of rare-disease treatments sees continuing to hurt earnings this year.

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