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BIOTECHNOLOGY PROMISES A HUGE GROWTH

Prohost Biotech - Wednesday, December 21, 2011

EXELIXIS’ (EXEL) advanced PI3K-delta research and development preclinical program attracted Merck, known as MSD outside of the United States and Canada. “PI3K-delta is therapeutic target that academic researchers and the drug industry are racing to develop therapeutic antagonists for both inflammatory diseases and cancer. To get to Exelixis program, Merck agreed to pay $12 million in upfront payment in addition to potential milestone payments for multiple indications of up to $239 million and royalties on net-sales of products that would emerge from the agreement. Merck will also pay Exelixis royalties on any compounds that would emerge from Exelixis’ PI3K-delta program or from certain compounds that arise from Merck’s internal discovery efforts targeting PI3K-delta during a certain period.

In addition, Merck has gotten an exclusive worldwide license to Exelixis product XL499, the company’s most advanced preclinical PI3K-delta inhibitor and other related compounds. Merck will have a worldwide exclusive license and have sole responsibility to research, develop, and commercialize compounds originating from the program.

Comments: Activation of PI3K-delta is thought to contribute to multiple inflammatory and allergic disorders, including rheumatoid arthritis and allergic asthma. Selectively targeting PI3K-delta has also shown potential in the treatment of certain lymphomas. Exelixis PI3K-delta program is not new. The firm has advanced pan-PI3K inhibitors in clinical development for cancer. The firm  believes that Merck’s global presence and significant resources make it the ideal organization to carry the PI3K-delta program forward, while providing Exelixis with resources that help it continued development and potential commercialization of its lead compound, cabozantinib, which is in late-stage development for medullary thyroid and prostate cancers.

GILEAD SCIENCES (GILD): the European Medicines Agency validated Gilead’s Marketing Authorisation Application for the Quad single-tablet regimen of elvitegravir, cobicistat, emtricitabine and tenofovir disoproxil fumarate for the treatment of HIV-1 infection in adults. The application was submitted on November 24. Review of the MAA will be conducted under the centralized licensing procedure, which, when finalized, provides one marketing authorization in all 27 member states of the European Union.

What’s Going On?

December 20 was a great day for biotechnology stocks as firms, which were expected to rebound since long, have finally began to climb the road to the mountain they were thrown from for no reason. Our picks have almost all rebounded, including the “Top Picks” and the “Widely Held biotech picks”.  (See Newsletter.)

Biotechnology is showing huge symptoms of future growth as new functional disease-causing genes are discovered and new disease pathways are pinpointed with many proteins being selected as promising targets for therapeutics and the fastness with which therapeutic molecules aiming at these targets are being developed. A typical example is Exelixis’ program around the promising PI3K-delta, which was licensed to Merck. At the speed the biotech industry is making its discoveries, building its equipments, developing its drugs and attracting large pharmaceutical companies to their great accomplishment is what makes us expect a huge growth for the biotech industry.

We are following up on every move and we are now satisfied with our picks.

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