PropThink’s Biotech Roundup

  • ICPT has a big problem, and could be headed back to its post-IPO prices, 50% lower than where they trade today. The company piqued our interest with the realization that pressure on the stock was a result of a lock-up expiration on the majority of ICPT’s outstanding shares. But the digging led us down a rabbit-hole of risks for this $550M company. It seems analysts and investors have overlooked a critical competitor to the company’s lead candidate, on which ICPT’s near-entire valuation currently hangs. Read more in the report, but Intercept has a major problem.
  • Illumina sold off on the news that Life Technologies (LIFE) had been bought by Thermo Fisher. The drop in share price, we believe, was overdone. The deal may bring Roche and ILMN back to the negotiating table, although Illumina’s leadership in sequencing is reason enough to own the stock.
  • Mr. Deryugin got interested in Vertex last month in acknowledgment of a strong cystic fibrosis program; buying VRTX then has returned 60% as VX-661 demonstrated some impressive clinical results this week. Back in December, PropThink said VRTX could be picked up as a long-term holding based on its CF franchise, and a position after that has pulled in a 117% return.
  • The transcript from PropThink’s conference call regarding Keryx Biopharmaceuticals is now available. PropThink subscribers were invited to join a discussion and Q&A with Dr. Scott Chambers, which we believe provided insight and clarity on a number of key issues around Keryx and Zerenex, but namely the overall strength of Zerenex’s IP and its chancec at a Patent Term Extension.
  • The takeout speculation on Achillion is a little overdone. But while many have shifted attention to its competitors, ACHN and its HCV drugs have a niche to fill in the treatment landscape, says Mr. Deryugin.
  • Cologuard doesn’t have much commercial potential, despite what Exact Sciences’ half-billion dollar market cap suggests. Clinical data look good, but next to other, cheaper CRC diagnostics, it’s marketability is questionable.
  • Sarepta revealed the outcome from its latest meeting with the FDA regarding an accelerated approval for eteplirsen. That decision is still in limbo, but the weakness in the stock was a good place to make an entrance, allowing for some exposure to a key event –and what we believe is long-term upside.

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