According to analysts, about 1 in 13 successful drugs is a “blockbuster.” Blockbuster drugs net over a billion in revenue and keep pharmaceutical companies profitable. Many new drugs can fail, get out-competed by other drugs, or never hit full stride, costing companies hundreds of millions of dollars lost to research, marketing, and approval.
Recently, I came across a few up and coming drugs and wanted to shed some light on whether investing in their respective manufacturing companies is a good idea or not.
1) Novartis- Malarial Drug – “spiroindolones”
Malaria remains one of the most deadliest diseases in the world and new drugs are always required to keep up with the resistance that the malaria parasite adapts to. For example, in Southeast Asia, the parasite is thought to be slowly becoming resistant to artemisinin – a combination therapy that is used by almost 100 million people. Novartis’ new drug – NITD609 – has shown promise in pre-clinical trials- working in mice and killing the parasite within one week and leaving no side effects in the mice. Although the results are positive and human testing will begin soon, is the drug enough to fill the coffers for Novartis? I don’t think so. US consumers will not need as much of the drug as their international counterparts and it’s a fact that most other countries put a price cap on all medication so the US usually ends up subsidizing for cheap drugs to other countries. No US consumers? Little revenue.
Bottom Line: Like other pharmaceutical companies, Novartis is a good stock to have in the portfolio. However, even if it is successful, this anti-malarial should not really affect the big picture. Keep an eye out open for further developments from Novartis, a
2) ImmunoCellular Therapeutics – Brain Cancer – “ICT-107”
This brain cancer treatment drug was granted orphan status by the FDA, allowing market exclusivity and tax benefits due to the small market that the drug is made for. ICT is a smaller company with a budget sheet under $10 million, yet they raised over $6 million from investments in the second quarter alone. ICT-107 has also passed several tests that indicate that it greatly increases the life span of patients and has a 100% 1-year survival rate when coupled with other forms of therapy. Glioblastoma has been a very hard disease to treat and any significant medical advances should be looked at carefully. Trading at around $1, it is a good investment, but a volatile one at best.
Bottom Line: ICT is a fair investment as the company is holding on and increasing its cash assets very well. They now have more cash than every before in their trading history. Their drug shows promise and should be followed in upcoming months for developments.
3) BIND Biosciences – Anti-tumoral nanoparticle – BIND-014 (docetaxel)
The relatively new nanomedicine drug that was introduced by BIND Biosciences this year (BIND-014) uses docetaxel, which is an already agent approved for breast, prostate, and lung cancer treatments. With the nanotechnology platform discovered by BIND, 20 times more of this agent can be deliver to a tumor site than with Taxotere, an injectable form. Furthermore, studies have shown that accumulation of Docetaxel at the site of the disease leads to improvements in antitumor activity and allows for better tolerability for cancer growth. Currently, BIND is an privately traded company that raised $12.4 million in investments from venture capital firms, including Polaris Venture Partners and Flagship Ventures. This is a relatively safer investment, so its a good idea to keep up with them and invest if they go public.
Bottom Line: Already using an approved agent, BIND merely enhances the medical route. Currently it is a private company, but has a good chance of going up for sale or becoming public as it shows growth. Read this article for more information about the future of the company.
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