A week of bold statements, and what is next for the companies
Friday, 13-February-2015
Aside from the commotion of the BIO CEO and Leerink conferences, this felt like a very slow week of news for biotech. However, one thing that stood out in my mind were some bold statements made in the press about a few companies I follow. They are Aerie Pharmaceuticals (Nasdaq: AERI), Acadia Pharmaceuticals (Nasdaq: ACAD), and Intra-Cellular Therapies (Nasdaq: ITCI). I own all three of these stocks and am optimistic about their future, but you always have to worry about a jinx when bold statements are made publicly. Therefore, I thought I would provide a quick recap of what was said, and offer up what catalysts are coming in case you want to follow their progress and see if they ultimately back up the big words with results.
What was said: In a Reuters story about glaucoma on Monday, Aerie CEO Vicente Anido Jr. made a big prediction about what type of companies Aerie might compare to one day.
"We think we could end up being the next Allergan or Alcon," he said.
What's next: Aerie has a huge event coming up in the second quarter. That is when the phase 3 "Rocket 1" trial for their Rhopressa eye drop will report in patients with glaucoma or ocular hypertension. After that, a second Rhopressa phase 3 trial called "Rocket 2" will report in the middle of the year. Both of these are binary events that have to succeed, or you can throw Monday's bold statement out the window.
Rhopressa is a once-daily eye drop that inhibits both Rho Kinase and the norepinephrine transporter. Nearly 20 years have transpired since a new class of medicine has been introduced for glaucoma.
What was said: Forbes columnist Matthew Herper wrote an excellent story this week about the mini-renaissance that is going on in neuroscience lately. One company that was profiled was Acadia Pharmaceuticals, and CEO Uli Hacksell gave a bold prediction about how his company will be the sector's new leader.
“We expect to become the leading neurology company in the U.S.,” he said.
What's next: First of all, Acadia needs to actually file the NDA for Nuplazid, their Parkinson's disease psychosis drug, before any talk like that is in order. The company was originally scheduled to file the application before the end of 2014, but has delayed it until first quarter of 2015. Given that we are already halfway through Q1, time is of the essence to get it filed and prove there are no lurking issues.
One question you might be asking is: how can a company with only one drug be the leading neurology company in the U.S.? As Zacks analyst Jason Napodano suggests below, Acadia will likely buy one or two commercial assets to complement Nuplazid soon.
Credit to Jason for always being on top of things.
What was said: In a supplement to the same Forbes story, Jeffrey Lieberman, psychiatrist in chief at New York-Presbyterian Hospital-Columbia University Medical Center, had some strong words to describe Intra-Cellular's 5-HT2A serotonin receptor antagonist, ITI-007.
“It could be the most promising advance in antipsychotic pharmacology [in decades],” he said.
What's next: This drug is currently in a phase 3 trial for schizophrenia, and the trial will likely report in the fourth quarter of this year. I agree ITI-007 could be a big drug, but you have to be especially careful following this stock because it is thinly-traded and moves easily. Yesterday alone the stock was up nearly 15% on very low volume, likely due to exposure gained from the above statement. On the bright side, Intra-Cellular is less known to investors than Aerie and Acadia, and so it might represent an under-the-radar opportunity.
There you have it. In a week of slow news, those interesting statements were one of the few things that actually stood out to me. While I would personally like to see actions rather than words, I do think these are three excellent companies that can potentially live up to the hype one day. Keep an eye on those upcoming catalysts, and let's see if they can back up the big talk.
Who Am I?
I'm an individual investor from Kansas City. My focus is on biotech stocks, but I enjoy investing in all industries. I'm an old-school, buy and hold investor who believes the best way to outperform and grow capital is to own innovative companies with good management teams over the long-term. more>>