We are generally positive on the pharmaceutical industry heading into 2009. We expect the majority of stocks to fair far better in 2009 than they did in 2008, based on a number of attributes.

Firstly, almost all the names in the group are trading at very reasonable valuations. Several of the largest players are trading at PEs below 10x, including Pfizer Ltd. (

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We are generally positive on the pharmaceutical industry heading into 2009. We expect the majority of stocks to fair far better in 2009 than they did in 2008, based on a number of attributes.Firstly, almost all the names in the group are trading at very reasonable valuations. Several of the largest players are trading at PEs below 10x, including Pfizer Ltd. (PFE, 8x), Eli Lilly & Co. (LLY, 9x), Merck (MRK, 9x), AstraZeneca (AZN, 9x) and Wyeth (WYE, 10x) based on our fiscal 2009 estimates.Secondly, expectations are low. Most of the companies are not expected to generate significant revenue growth, and earnings growth is primarily being drive by cost-cutting and share buybacks. Therefore, there seems little downside risk to our financial models, even should the economy continue to struggle throughout the entire year. So we do not see much risk ...

Yesterday, very few investors even knew about Dynavax Technologies Corp., but today the company received much attention after announcing a worldwide strategic alliance with GlaxoSmithKline (NYSE: GSK) to discover, develop and commercialize novel inhibitors of endosomal Toll-like Receptors (TLRs) to treat immuno-inflammatory diseases. As of Wednesday afternoon, the stock is up approximately 458% on 8.7 million traded shares.

Through the alliance, Dynavax will receive $10 million from GSK for the exchange of an exclusive option over four programs targeting autoimmune and inflammatory diseases such as lupus, psoriasis, and rheumatoid arthritis. According to the press release, Dynavax can receive future potential development and commercialization milestones totaling approximately $200 million per program. GSK has the exclusive option to license each program upon achievement of proof-of-concept or earlier depending on certain circumstances.

Dino Dina, M.D., President and Chief Executive Officer of Dynavax, commented, “Our alliance with GSK provides an opportunity to create an entirely

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Maxygen, Inc. (NASD: MAXY), a biopharmaceutical company focused on developing improved versions of protein drugs, recently announced a global agreement with Astellas Pharma Inc., a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. The agreement, in which Astellas will receive worldwide rights to commercialize MAXY-4 lead candidates for all autoimmune diseases and transplant rejection, represents a significant step.

MAXY-4 is Maxygen’s preclinical program to create a next-generation CTLA4-Ig protein for rheumatoid arthritis, transplant rejection and other autoimmune indications. The companies will co-develop MAXY-4 candidates for rheumatoid arthritis and other autoimmune diseases, under the terms of the development agreement, and Astellas will exclusively develop MAXY-4 candidates for transplant rejection. Additionally, Astellas will manufacture the finished product using the active drug substance provided by Maxygen, and market and sell such product globally.

Maxygen will receive a $10-million initial payment from Astellas

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Sinobiomed (SOBM) is a Chinese developer of genetically engineered recombinant protein drugs and vaccines. The company’s drugs treat diseases and ailments such as malaria, hepatitis, surgical bleeding, cancer, rheumatoid arthritis, diabetic ulcers and burns, and blood cell regeneration. Sinobiomed currently has 10 products: three on the market, four in clinical trials and three in research and development.

Sinobiomed, based in the bustling metropolis of Shanghai, could be on the forefront of the burgeoning Chinese biotechnology industry. China’s biotech industry is expected to continue its rapid expansion of 20 percent to 30 percent annually to $8.5 billion by 2010 helped by government contributions of $600 million annually. The Chinese pharmaceutical industry is expected to be the world’s 5th largest market by 2010.

Sinobiomed is considered a market leader in the area of recombinant protein drugs and recently acquired a distributor to facilitate a more expeditious sale of some its drugs. The

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Sinobiomed Inc. (SOBM.OB) is a leading Chinese developer of genetically engineered recombinant protein drugs and vaccines. Sinobiomed employs a patented low-cost, high yield production process to enhance bioactivity and guarantee the highest levels of purity.

Sinobiomed currently has 10 products approved or in development: three on the market, four in clinical trials, and three in R&D. The company’s products respond to a wide range of diseases and conditions, including: hepatitus B&C, surgical bleeding, diabetic ulcers and burns, malaria, cancer, rheumatoid arthritis, acute liver disease, stroke, blood clots and thrombosis, acute pancreatitis, and blood cell regeneration.

Sinobiomed has several competitive advantages in addition to the company’s patented recombinant protein manufacturing process. One advantage is the company’s strong strategic alliances with leading Chinese research hospitals and institutes for collaborative development of patentable techniques and treatments. Another advantage is the company’s distribution network.

Sinobiomed has also established a nationwide sales and marketing network along with international

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Vyteris Incorporated is a medical instrument and supply company involved in the development and production of electronically controlled transdermal drug delivery systems that deliver drugs through the skin without using needles. They are the maker of the first active drug delivery patch to receive market approval from the U.S. Food and Drug Administration. Vyteris was founded as a spin out of the Transdermal Systems unit of Becton Dickinson in November of 2000, and since that time they have received over 181 worldwide patents, most of which still have at least ten years remaining.

Nearly eight years after their founding, Vyteris is headquartered in Fair Lawn, New Jersey, in a building that provides the team with over 27,000 square feet of space for the research, development and manufacturing of their products. LidoSite, Vyteris’ proprietary active transdermal drug delivery technology, delivers drugs comfortably through the skin using low-level electrical energy.

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