August 15, 2007

Biotech notes

Gilead licenses new drug

Gilead (GILD) held strong today, despite the 1.4% decline in the S&P 500. After the bell, the company announced that it had entered into a licensing and co-development agreement with Parion Sciences on drug P-680, which treats pulmonary diseases like cystic fibrosis, chronic obstructive pulmonary disease and non-CF bronchiectasis. This drugs adds to Gilead's pipeline, which already includes Aztreonam Lysine, a Phase III cystic fibrosis candidate. Parion is also developing P-552, which treats cystic fibrosis, and is currently in Phase II trials. P-680 is currently in pre-clinical testing, which Parion will conduct. If the drug moves into clinical trials, Gilead will take over.
According to the press release, P-680 employs a proprietary Parion technology known as an epithelial sodium channel inhibitor, or an ENaC. The technology stimulates hydration on mucosal surfaces in the body, such as those in the lungs, warding off infections in patients who suffer from chronic lung diseases such as cystic fibrosis and chronic obstructive pulmonary diseases such as long-term bronchitis.

What does this mean for investors? Probably not much right now. Gilead has done a great job recently expanding its portfolio across different diseases other than its main area of expertise HIV. Gilead is the world leader in HIV treatments, but lately it has been expanding its reach. It got Letairis approved in June, which treats pulmonary arterial hypertension; it has a late stage drug to treat Hepatitis B, which could add to its current Hepatitis portfolio. While this license won't do much for shareholders now, investors should be happy that Gilead continues to invest and expand its portfolio.

Disclosure: I am long shares of GILD


Amgen to cut jobs

Amgen (AMGN) continued its six-month decline today as shares eased another 1.42%. The company today announced that it will cut up to 14% of its work forces in an effort to cut costs. The company said that a weakening market for its anemia drugs Aranesp and Epogen are to blame.
Investors have been very sour on Amgen this year, as growth seems to be slowing. Shares are off roughly 25% over the past 6 months.


Disclosure: I have no position in AMGN

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