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Alcon Continues to Grow Pipeline – Analyst Blog

Zacks Market Commentaries — Mon, 26 Oct 2009 18:52:09 +0000

Alcon, Inc. (ACL) recently entered into an in-licensing agreement with Potentia Pharmaceuticals, a privately-held biotechnology company that focuses on the development of medicines for the treatment of age-related macular degeneration (AMD). Alcon gained the right to develop Potentia's leading drug candidate, POT-4, for the treatment of AMD. Alcon also gained the right to acquire Potentia’s shares on the achievement of certain development milestones and if Alcon opts to continue with the development of POT-4.

Alcon will make upfront payments to Potentia for the initial license and option rights. Potentia is also entitled to receive future payments based on the achievement of several clinical and global regulatory approval milestones for different therapeutic indications and on Alcon's decision to proceed with development. Potentia will also receive royalties based on sales of any products that are approved and commercialized under this agreement.

POT-4 is a complement inhibitor, which is being developed for both dry and wet AMD. The candidate has completed a phase I study in wet AMD patients. With AMD being the leading cause of blindness in the elderly in the western world and estimated to affect more than 10 million patients in the United States alone, we believe the commercial opportunity for AMD is significant. While 10% of AMD patients are afflicted by the wet form of the disease, the dry form of the disease is more prevalent with 90% of AMD patients suffering from it.

Although detailed information regarding the financial terms of the deal was not available, we are pleased to see Alcon’s commitment towards building its pipeline through in-licensing deals and acquisitions. The in-licensing deal with Potentia is the latest in a series of deals executed by Alcon to strengthen its pipeline.

In September 2009, Alcon announced the acquisition of Swiss biotech company, ESBATech AG. In July 2009, Alcon entered into a five-year collaborative research agreement with AstraZeneca (AZN) for the exclusive ophthalmic discovery and potential development rights to AstraZeneca’s compound library. Alcon also entered into a research and licensing agreement with PhiloGene Inc. for rights to a vascular endothelial growth factor (VEGF) protein, which will be developed for the treatment of wet AMD and diabetic macular edema. All these transactions should allow Alcon to strengthen its ophthalmic product pipeline.

We maintain our Neutral recommendation on Alcon. The company’s primary competitor in the ophthalmology market is Allergan, Inc. (AGN).
Read the full analyst report on "ACL"
Read the full analyst report on "AZN"
Read the full analyst report on "AGN"
Zacks Investment Research

Regeneron Enrolls for Studies – Analyst Blog

Zacks Market Commentaries — Thu, 24 Sep 2009 17:00:43 +0000

Last week, Regeneron Pharmaceuticals, Inc. (REGN) announced the completion of enrollment in two late stage studies of its VEGF (vascular endothelial growth factor) trap-eye treatment for age-related macular degeneration (wet AMD), a leading cause of blindness in adults. Each of the randomized, double-masked trials has enrolled more than the target of 1,200 patients.

The company is developing the drug in partnership with Bayer HealthCare (BAYRY.PK). The study will be a non-inferiority comparison of the VEGF trap-eye with ranibizumab (Lucentis from Genentech, Inc- now a wholly owned subsidiary of the Roche group (RHHBY.PK)), an anti-angiogenic agent approved for use in wet AMD. The company expects one-year primary endpoint data from both studies in the fourth quarter of 2010.

As a reminder, Regeneron and Bayer HealthCare entered into a collaboration agreement in Oct 2006 for the development and commercialization of the VEGF trap-Eye outside the United States . The two companies agreed to collaborate and share the costs of development of the VEGF trap-eye through an integrated global plan including wet AMD, diabetic macular edema (DME), and Central Retinal Vein Occlusion (CRVO).

The duo will equally split the profits from ex-U.S. sales of the VEGF trap-eye. Within the US , Regeneron has retained exclusive commercialization rights in all indications and will retain 100% of all profits.

Regeneron recently suffered a pipeline setback when together with its collaboration partner Sanofi-Aventis (SNY), it halted the development of the late-stage pipeline candidate, aflibercept, for the treatment of pancreatic cancer. This was because the study showed that patients on aflibercept were not surviving significantly longer than those in the placebo group. The pipeline setback had a negative impact on the company’s stock price and any such pipeline failure in the future will also weigh heavily on Regeneron’s shares.

Currently, we are Neutral on Regeneron.
Read the full analyst report on "REGN"
Read the full analyst report on "SNY"
Zacks Investment Research

Zacks Bull and Bear of the Day Highlights: ON Semiconductor, Developers Diversified, Alcon Inc., AstraZeneca and Allergan, Inc. – Press Releases

Zacks Market Commentaries — Fri, 18 Sep 2009 14:15:05 +0000

For Immediate Release

Chicago, IL – September 18, 2009 – Zacks Equity Research highlights ON Semiconductor (ONNN) as the Bull of the Day and Developers Diversified (DDR) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alcon Inc.(ACL), AstraZeneca (AZN) and Allergan, Inc.(AGN).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

ON Semiconductor (ONNN) is an OEM of primarily analog semiconductors used within a diverse set of end markets. June quarter results beat consensus expectations, with management guiding for stronger results in the September quarter.

Recent acquisitions, a broad product portfolio, a well diversified business across end markets and geographies, restructuring actions and debt reduction initiatives are other positive factors.

While competition is strong as ever and restrictive covenants and some residual integration risk remain, we believe the positives far outweigh these negative factors. Consequently, we are reiterating our OUTPERFORM rating on the stock.

Bear of the Day:

Developers Diversified (DDR) has a relatively high leverage compared to its peers due to acquisitions over the past several years. Developers Diversified is raising cash through asset sales, debt, and by selling 30 million shares and additional warrants to the Otto family, a shopping center developer in Germany.

The equity sale is dilutive and the long-term sustainability of the company is under doubt. Our recommendation for the company is Underperform as we anticipate it to perform well below the broader market. However, if Developers Diversified can tide over the current storm, the share price can rise.

Latest Posts on the Zacks Analyst Blog:

Alcon Expands Pipeline

Earlier this week, Alcon Inc.(ACL) signed a definitive agreement for the acquisition of Swiss biotech company ESBATech AG. Alcon will pay $150 million in cash at closing. Besides this, Alcon may pay up to $439 million on the achievement of future research and development milestones.

With this acquisition, Alcon will gain access to ESBATech’s proprietary antibody fragment technology, which is used for the development of compounds for the treatment of eye diseases like age-related macular degeneration, diabetic macular edema, glaucoma, dry eye and uveitis.

ESBATech has several stable and soluble single-chain antibody fragments in development. ESBATech’s lead antibody fragment, ESBA105, is a recombinant humanized scFv antibody fragment directed against human tumor necrosis factor-alpha (TNFα). ESBA105 is being developed for a number of therapeutic indications and is currently in a phase IIa study for uveitis and a phase Ia/IIb study for cataract surgery.

We view this acquisition as a positive as it reinforces Alcon’s commitment towards building its pipeline through in-licensing deals and acquisitions. The transaction should allow Alcon to strengthen its ophthalmic product pipeline.

The ESBATech acquisition is the latest in a series of deals entered into by Alcon to build its pipeline. In July 2009, Alcon entered into a five-year collaborative research agreement with AstraZeneca (AZN) for the exclusive ophthalmic discovery and potential development rights to AstraZeneca’s compound library.

Alcon also entered into a research and licensing agreement with PhiloGene Inc. for rights to a vascular endothelial growth factor (VEGF) protein, which will be developed for the treatment of wet age related macular degeneration and diabetic macular edema.

Alcon’s primary competitor in the ophthalmology market is Allergan, Inc.(AGN).

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

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Zacks Investment Research

BioMedReports FDA Calendar: Seven New Extreme Trades

Bullish Bankers — Mon, 22 Jun 2009 21:00:48 +0000

Below are companies with market caps under $250 million from the BioMedReports.com FDA Calendar, which have either pending FDA decisions or pending clinical trial results that may have a major impact on each of the underlying stock prices. A high risk/reward trading approach to consider for speculative traders is investing a small amount of money [...]