One developer is on the verge of a potential approval for a breakout new blockbuster, another has a therapy in closely-watched trials which could lay the foundation for a new drug capable of unleashing significant pent-up demand. There's a biotech company in talks with partners on a late-stage product now in a cleverly designed clinical trial. One cancer drug is under the spotlight in a risky trial--while another cancer drug appears to be just weeks away from a possible success. All of them appear in our new issue of On the Radar, which this month comes from two top analysts at Leerink Swann: Howard Liang and Joseph P. Schwartz.
Radar features analysts' projections on five biotech companies that are nearing a crucial crossroad in the next two or three months. Each of them face a moment of truth that has been years in the making. This is how Liang and Schwartz see the chips falling in the weeks and months to come for Human Genome Sciences, Auxilium Pharmaceuticals, Inspire Pharmaceuticals, GTx and Poniard Pharmaceuticals. - John Carroll
Human Genome Sciences (Outperform)
We expect Human Genome Sciences (HGSI) to become the next large cap Biotech. Benlysta could be the first true disease-modifying therapy for lupus, a multi-billion dollar opportunity. We have high conviction in our estimate of ~85 percent likelihood of success for HGSI's Benlysta BLISS-76 Phase III data in November, based on our statistical power analysis and previous positive data from the BLISS-52 trial. Full details of BLISS-52 data, to be released at the American College of Rheumatology on Oct. 20, should confirm the strong efficacy and clean safety profile. An NDA filing is expected in 1H10. We currently estimate worldwide Benlysta sales of $364M in 2010 growing to $7.2B in 2015. HGSI share of revenue is 50 percent, or ~$3.6B in 2015. Regarding Partnering & Acquisition potential, Benlysta is currently partnered with GSK, and we believe the incremental 50 percent rights to Benlysta is likely worth much more than HGSI's ~$2.5B market cap. HGSI also has around $2B of NOL's which could be attractive to other potential acquirors. - Joseph P. Schwartz