May 27, 2013

Tiny Biotech Developing Drugs Akin To Biogen’s Rituxan Seen As Potential Buyout Bet

Written By Gene Marcial, Contributor

Welcome to the super-sized Tiny Biotech Developing Drugs Akin To Biogen’s Rituxan Seen As Potential Buyout Bet.

Unfortunately for investors in the arcane world of biotechnology, biotech stocks haven’t fully participated in the market’s current robust bull run. They have moved sideways, at best.

“The underlying trend in the biotech sector remains profit-taking (selling) mode, with an overall market shift into cyclicals and out of defensive sectors, as the broad markets rise to new highs,” notes John McCamant, editor of the Medical Technology Stock Letter, in Berkeley. California. Stocks

Nonetheless, the industry is where a big number of investors have doubled or even tripled their money on new drugs that turned out to be blockbusters. So understandably, Wall Street continues to have its eyes glued on the biotechs. True, the industry has also been a source of major failures that resulted in big losses for some. But for the perspicacious investor, that’s not a too high a price to pay for the prospect of possibly getting an enormous windfall.

Necessarily, the companies that engage in the search for new drugs are small outfits with big ideas that have to depend on financing from new-venture capitalists or angel financiers.

One small biopharmaceutical that believes it has a proven technology for another blockbuster is TG Therapeutics (TGTX), which is focused on developing drugs for the treatment of cancer and other underserved therapeutic needs, including hematologic malignancies, such as people suffering from chronic lymphocytic leukemia (CLL) and non-Hodgkins lymphoma (NHL).

The company has developed two advanced therapies: TGTX-1101 or Utuxin (ublituximab), a novel third generation monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found in mature B-lymphocytes. It is in clinical development for patients with relapsed and refractory NHL. The TGR-1202 is an orally available P2K delta inhibitor believed to be essential in the proliferation of B-cell lymphocytes. Utuxin has completed two phase 1 clinical trials in CLL patients. Enrollment of patients for a Phase 2 clinical trials are scheduled to begin this summer.

The excitement over Utixin is its similarity in some aspects with Rituxan, Biodgen Idec’s (BIIB) blockbuster drug.

“We believe Utuxin has blockbuster potential, given its proven mechanism of action,” says Jonathan Aschoff, biotech analyst at investment firm Brean Murray Carret & Co. Utuxin is “effective, differentiated and from a clinical and regulatory standpoint, it’s significantly de-risked by other approved CD20 antibodies,” he says, such as Rituxan, the world’s most prescribed treatment for NHL and rheumatoid arthritis. Biogen Idec develops and makes therapies for the treatment of neurodegenerative diseases, hemophilia, and auto immune disorders.  …read more