OSI PHARMACEUTICALS (OSIP): About the negative opinion from the European Committee for Medicinal Products for Human Use (CHMP), regarding Tarceva in combination with gemcitabine chemotherapy as first-line, once-daily, oral therapy for locally advanced, inoperable or metastatic pancreatic cancer. Roche is evaluating a possible request for re-examination of the decision. The reason is that the same combination was approved by the FDA in November 2005 for the treatment of locally advanced, inoperable or metastatic pancreatic cancer in patients who have not received previous chemotherapy.

The FDA based its approval decision on results from a successful randomized double-blind, placebo-controlled Phase 3 clinical study of Tarceva, in combination with gemcitabine chemotherapy. These troials were conducted on 569 patients with unresectable locally advanced or metastatic pancreatic cancer. The study met its primary endpoint of improving overall survival by 23 percent (hazard ratio = 0.81) in this patient’s population. After one year, 24 percent of patients receiving Tarceva plus gemcitabine were alive compared to 19 percent of patients receiving gemcitabine plus placebo. A statistically significant improvement in progression-free survival (hazard ratio = 0.76) also was demonstrated. That explains why Roche decided to ask the (CHMP) to re-examine its decision.

XOMA(XOMA): In light of Cubist Pharmaceuticals’ decision to cease investment in its HepeX-B(TM) product because of stringent FDA requirements for regulatory approval, XOMA has placed its production process development work for Cubist on hold and has issued a notice of contract termination to Cubist. Cubist and XOMA have begun discussions to consider other development options for HepeX-B.

XOMA and Cubist had signed an agreement in September 2005 under which terms XOMA uses its antibody development and manufacturing capabilities to develop new processes to manufacture HepeX-B - a combination of two fully human monoclonal antibodies that target the hepatitis B virus (HBV). The product, has been granted Orphan Drug Status in both the U.S. and the European Union and has been under evaluation for the prevention of HBV re-infection in liver transplant patients.

On the bright side, Xoma will collect royalty payments on the sales of Genentech’s Newly approved drug Lucentis for macular degeneration.

Evaluating development-stage companies with no regard to their technologies and product pipelines has proven to be the primary cause of unfairness to the biotechnology industry as a whole, which led to a general suppression opf excellent firm’s market caps. Technology is what counts in this industry, as it represents the engine that produces novel therapeutic molecules for self and non-self, which will sooner or later translate into revenues.

XOMA

Today, XOMA. (XOMA) announced that it will start cashing on Lucentis™, owned by Genentech. The drug has been recently approved by the FDA for the treatment of neovascular (wet) age-related macular degeneration. Lucentis is the first marketed therapeutic product by a licensee of XOMA’s Bacterial Cell Expression (BCE) technology. The press release stated that XOMA will receive a royalty on worldwide sales of Lucentis. Another drug, Cimzia™ (certolizumab pegol, CDP870), owned by UCB (Euronext-Brussels:UCB), has been submitted to the FDA and European regulators for approval in Crohn’s disease and is currently in Phase 3 clinical trials for rheumatoid arthritis.

XOMA’s BCE licensing program includes production and research licenses, which to date have been signed with more than 45 pharmaceutical and biotechnology companies. XOMA has also provided its BCE technology in cross-license arrangements that have allowed XOMA to gain access to seven of the world’s leading phage display libraries and other technologies critical to its antibody discovery and development programs. As a matter of policy, XOMA generally does not disclose royalty percentages, up-front or milestone payments, or other financial terms of specific licenses.

This is one example of “hidden values” of small biotech firms. Many development-stage biotechnology firms have market caps that do not at all reflect the value of their technologies and the promises of their products. Prohost subscribers are aware of these firms.

Is it the best time to invest in this extremely suppressed biotech sector?