Biotechnology Companies Could Stand to Gain From Drug-Safety Worries
The storm lashing big pharmaceutical companies over safety concerns about pain treatments such as Celebrex and Vioxx may actually blow some good in the direction of biotech stocks.
As the product pipelines for pharmaceutical companies come under even greater pressure, biotechnology companies may be in a better bargaining position with the big drug companies that are seeking to license their drugs.
That wasn't the case about five years ago, says Kris Jenner, portfolio manager of T. Rowe Price Health Sciences Fund. "The balance of power in the commercial agreement between large and small companies was heavily lopsided toward the larger company," Mr. Jenner says. While the trend has been building for a while, now "it's more evenly distributed than it has been."
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As a result, says Eric Schmidt , a biotechnology analyst with SG Cowen, when big pharma buys rights to biotech drugs, "the price tag has gone up."
Indeed, investors have been buying biotech stocks as an alternative to pharmaceutical stocks, according to a Merrill Lynch report released this week. The report says investors view biotechnology companies as less plagued by the problems of big pharma, including product safety, drug pricing and a lack of innovation.
To be sure, drug approvals may face heightened scrutiny, which could pose problems for biotech companies as well. After all, most biotech companies burn through cash, and any delay in getting a drug approved -- and revenues flowing in the door -- could be perilous. "Even a modest increase in the regulatory hurdle will have big implications," says Steven Harr, a biotechnology analyst at Morgan Stanley.
The drugs now under fire come mainly from a class known as Cox-2 inhibitors, which are widely prescribed for arthritis and other ailments. Yesterday, the Food and Drug Administration recommended limiting use of the drugs, pending further review.
Since Merck & Co. announced it was withdrawing Vioxx on Sept. 30, because of a study that found the drug increased the risk of heart attacks and strokes if used longer than 18 months, drug stocks generally have fallen. Merck itself has fallen to $32.30 from $45.07 when it closed on Sept. 29, the day before the announcement. Shares of Pfizer Inc., whose drugs Celebrex and Bextra also have been subject to safety questions, in that time have fallen to $26.07 from $30.18.
Biotechs have fared better. Amgen Inc. has risen to $64.15 from $57.99 on Sept. 29, while Genentech Inc. has been roughly flat, closing at $53.85 yesterday, up from $52.14 on Sept. 29.
If heightened scrutiny of new drugs delays the approval process, fund managers may be less likely to invest in the industry. Increased post-approval surveillance also could create additional costs for biotechnology companies, which typically operate on smaller budgets than major pharma firms.
"Biotechs tend to be small," says Erin Xie, portfolio manager of State Street Research Health Sciences Fund. "If they have to spend more on post-surveillance, it's going to affect the bottom line."
However, biotechnology companies likely won't face the same level of regulatory scrutiny as the major drug companies.
Stelios Papadopoulos, vice chairman of SG Cowen, says biotechnology companies typically make drugs for deadly diseases, such as cancer. Their drugs often have serious side effects. But doctors, patients and regulators are more likely to accept those side effects in drugs for life-threatening illnesses. In contrast, drugs treating erectile dysfunction or pain relief are more likely to be heavily scrutinized by regulators, he says. In drugs for life-threatening conditions, Mr. Papadopoulos says, "the trade-offs between efficacy and side effects are better understood."
Biotechnology-stock investors are likely to be willing to absorb any additional costs resulting from a delayed approval process, adds Sid Taubenfeld, a health-care analyst with New York-based SIMRx Advisors. "People like to invest in biotech no matter what," he says. "It's probably the only industry where they sell ideas."
More pharmaceutical companies are seeking partnerships with biotechnology companies, and seeking those partnerships at earlier stages in the drug development process. In the past, pharmaceutical companies have been leery about assuming financial risks associated with preclinical and early clinical trials, analysts say. But shrinking drug pipelines and the ability of biotech drugs to attack new, untreated illnesses may help big drug companies diversify their products.
Some biotechnology companies are choosing to hold out for a more-favorable licensing deal.
Spiro Rombotis, chief executive of closely held biotechnology company Cyclacel Group PLC, Dundee, Scotland, says biotechs can offer better rewards to their investors by waiting until later-stage trials to enter into partnerships.
"The amount of money that one needs to invest in midstage clinical trials is dwarfed by the potential reward one can get by licensing the drug" when it is further along in the testing process, says Mr. Rombotis, whose company has two cancer drugs in clinical trials and several other drugs in preclinical development.
One issue biotechs don't face is the controversy over marketing. Big drug companies selling Cox-2 inhibitors have faced criticism from the medical community for heavily marketing the drugs to consumers, boosting demand before their risks were thoroughly vetted.
Because biotechnology companies generally promote their drugs to doctors, it is unlikely that the industry will be hurt by any direct-to-consumer marketing crackdowns, analysts and biotechnology companies say. For example, Michael Beckerich, spokesman for large biotech firm Amgen, says only two of the company's drugs are advertised on television.
生物科技公司坐享其成
那些大型制药公司因其生产的Celebrex和Vioxx等止痛药存在安全性问题而饱受诟病，这对生物科技类股而言可能却成了件好事。
由于制药公司在新产品永续规划方面甚至将面临更大的压力，因此生物科技公司在与那些寻求使自己的药品获得上市许可的制药公司打交道时将拥有更多讨价还价的余地。
T. Rowe Price健康科学基金的投资组合经理克里斯?詹纳(Kris Jenner)说，5年前的情况可不是这样，那时大型制药公司在与小型制药公司开展商务交往时占有很大优势。詹纳称，虽然冰冻三尺非一日之寒，但目前大公司和小公司间的实力确实更加均衡了。
SG Cowen的生物科技分析师埃里克?施密特(Eric Schmidt)指出，上述现象导致大型制药公司不得不花更高的价钱购买生物科技药品的权益。
事实上，据美林公司(Merrill Lynch)本周发布的报告称，投资者一直在将生物科技类股作为制药类股的替代品而买进。该报告说，在投资者看来，产品安全、药品定价和缺乏创新等困扰大型制药公司的问题在生物科技公司身上不是那么严重。
诚然，监管机构在批准药品上市方面可能会采取更加严格的态度，这对生物科技公司来说也是不利的。不管怎么说，多数生物科技公司都还在赔钱，药品在获准上市方面的任何延误（这也意味著公司无法及时获得收入），都有可能使这类公司处于险境。摩根士丹利(Morgan Stanley)的生物科技分析师史蒂芬?哈尔(Steven Harr)说，监管障碍的有限度加大也会对生物科技公司产生重大影响。
目前受到抨击的主要是被称做Cox-2抑制剂的那类药物，医生经常给关节炎患者和其他身体略感不适的人开这类药物。美国食品和药物管理局(FDA)昨天建议人们减少对这类药物的使用，并说将对这类药物做进一步的评估。
自从默克公司(Merck & Co.)于9月30日宣布将从市场上撤回其药物Vioxx以来，制药类股普遍出现了下跌。有研究显示，如果服用Vioxx的时间超过18个月，那么人们患心脏病和中风的危险性将会加大。默克公司的股价就从9月29日收盘时的45.07美元跌至了32.30美元。在此期间，辉瑞公司(Pfizer Inc.)的股价也从30.18美元跌至26.07美元。该公司的药物Celebrex和Bextra也被发现存在安全问题。
与此同时，生物科技类股却表现良好。Amgen Inc.的股价从9月29日的57.99美元升至了64.15美元，Genentech的股价昨日收于53.85美元，与9月29日的52.14美元大体持平。
如果新药因安全审查趋严而导致审批进程放缓，那么基金经理们投资生物科技业的兴趣可能将会下降。而新药获准上市后跟踪监督力度的加大也有可能增加生物科技公司的成本，而这类公司的运营预算通常要少于大型制药公司。
State Street Research健康科学基金的投资组合经理爱伦?谢(Erin Xie)说，生物科技公司的规模往往不大，如果它们在后续跟踪监督方面的成本加大，那么其利润将受到影响。
不过，生物科技公司遇到的监管审查可能不会像大型制药公司那样大。
SG Cowen的副董事长帕帕多普洛斯(Stelios Papadopoulos)说，生物科技公司开发的药物通常都是用于治疗癌症等致命疾病的。它们开发的药品经常都有严重的副作用。但为了救命，医生、患者和监管当局也更愿意容忍这些副作用。相反，监管当局更有可能对治疗性功能障碍的药物和止痛药严加监管。帕帕多普洛斯说，对于治疗致命性疾病的药物，人们更看重的是其疗效，而非副作用。
SIMRx Advisors的医疗保健分析师陶本菲德(Sid Taubenfeld)说，生物科技类股的投资者看来愿意承受任何因批准程序延误而增加的成本。他说，无论出现什么情况，人们就是愿意投资生物科技类股。
正有更多制药公司寻求与生物科技公司结成合作伙伴，它们希望在药品开发的早期阶段就结成这种合作关系。分析师们说，制药公司以往一直不愿因开展临床前研究和早期临床治疗而使自己蒙受财务风险。但新产品永续规划的减少以及生物科技公司治疗致命性疾病能力的增强可能正促使大型制药公司开始寻求自身产品的多样化。
为了在签发自己产品的使用授权方面获得更优厚的条件，一些生物科技公司采取了更加稳妥的做法。
少数人持股生物科技公司Cyclacel Group PLC的首席执行长罗姆伯提斯(Spiro Rombotis)说，如果生物科技公司在临床试验的中后期再与其他公司结成合作伙伴，那么它们给予投资者的回报会更加丰厚。
罗姆伯提斯说，虽然生物科技公司在中期临床试验阶段需要有资金投入，但如果它能在进一步试验的基础上得以签发自己所开发药品的使用授权，那它所获得的回报比中期临床试验时所能获得的投资要大得多。罗姆伯提斯的公司就有两种治疗癌症的药物正在进行临床试验，处于临床前开发阶段的药品还有几种。
生物科技公司无需面对的另一个问题是有关药品营销的争议。出售Cox-2抑制剂的大型制药公司一直受到医学界的批评，后者指责这些公司在向消费者推向这些药品方面做得太过分了，以致于这些药品在其副作用尚未被充分了解前就获得了很大的市场需求。
由于生物科技公司一般只是向医生推销其药品，因此分析师和生物科技类公司认为，如果医生向消费者推荐这些药品时出现问题也不大可能影响到生物制药业。例如，大型生物科技公司Amgen的一位发言人就表示，该公司只有两种药品在电视上作了广告。
