More Than Half of Industry Executives Anticipate Multiple Deals Next Year

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Valeant Pharma (NYSE: VRT) is looking for a successor to its royalty cash-cow antiviral drug Ribavirin and Epilepsy drug Retigabine seems to be the answer. Valeant, along with partner GlaxoSmithKline (NYSE: GSK) has recently submitted the drug for regulatory approval. Investors seem to have a positive view of the drug and thus Valeant’s share price has doubled since March and is currently trading at 34. However, investors might be over-optimistic about the epilepsy drug.

Valeant Pharma spent a fortune developing Ribavirin and had to settle a number of civil cases against it. Ribavirin proved its worth as treatment for Hepatitis C and generated a quarter of Valeant’s total profits. However, now royalties from Ribavirin are drying up as more and more generic versions of the drug have flooded the market. Revenues from Ribavirin are also decreasing due to expiry of country-specific deals.

Valeant expects Retigabine to step into Ribavirin’s shoe, which seems like an uphill task. Retigabine will have to face tougher challenges as the epilepsy drug market is already saturated. Nonetheless, Retigabine has an edge over other drugs as it uses Potassium ions to regulate the brain cells, controlling excitability. The drug has already garnered informal approval from Medical professionals.

Despite the euphoria surrounding the drug, it will be difficult for Retigabine to replicate Ribavirin’s success. Prescription-drug insurance plans are pressing their patients to opt for generic drugs and this is expected to have negative impact on name-brand drugs such as Retigabine. Any such failure of Retigabine may send the Valeant’s share price on the downward spiral. Valeant Pharma’s shares are already trading at a very high multiple. Its current share price is at 10 times trailing 12-month's cash flow which makes it almost 50% pricier than other pharma companies. If Retigabine does not garner the premium multiple of Ribavirin, Valeant’s stock price may decline by 30%.

GlaxoSmithKline PLC (NYSE: GSK) hit a new 52-Week high of $42.70 so far today. Currently the stock is up $1.12 (2.7%) to $42.65 on 852,101 shares traded. Today...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

BOSTON (MarketWatch) -- Drug stocks advanced in early action Monday, boosted by a rally among major European drugmakers, while shares of Cephalon Inc. fell on news that a later-stage clinical study for its pediatric drug Cinquil came up short-handed.

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PPD, Inc. will acquire BioDuro, a preclinical CRO, as a follow-up to its purchase last month of Excel PharmaStudies, both of which are major transactions; we reflected on the huge difference between how China and the US go about creating “life science clusters”; China enrolled a record number of students in American universities during 2008-9; China Cord Blood listed on the NYSE and also completed a secondary offering; Advanced BioMedical signed an agreement in China to develop its bio-absorbable material in new applications;[More...]

Biogen Idec (BIIB) and Genentech, Inc., a wholly-owned member of the Roche Group (RHHBY.PK), announced that they have received a complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) for Rituxan. The companies were seeking approval for the use of Rituxan (rituximab) plus fludarabine and cyclophosphamide (FC) in patients with previously untreated [...]

(BIIB) Biogen’s Rituxan Label Expansion Delayed

GlaxoSmithKline will begin manufacturing its treatment for flu, Relenza, in China to supply China’s domestic market. GSK received approval of the drug in September from the SFDA. Relenza, like Tamiflu from Roche, aims at reducing both the severity and the duration of flu symptoms, though some resistance to the drugs seems to be evident.[More...]

Biogen Idec (BIIB) and Genentech, Inc., a wholly-owned member of the Roche Group (RHHBY.PK), announced that they have received a complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) for Rituxan. The companies were seeking approval for the use of Rituxan (rituximab) plus fludarabine and cyclophosphamide (FC) in patients with previously untreated and treated chronic lymphocytic leukemia (CLL).
 
Although the companies did not provide any details regarding the letter, they said that the agency has not asked them to submit any new data. Genentech and Biogen intend to work towards gaining final approval for the expanded indication and are planning to continue final label discussions with the FDA.
 
Rituxan is currently approved for the treatment of rheumatoid arthritis and non-Hodgkin’s lymphoma (NHL), a type of cancer. It contributes significantly to Biogen’s top line. Biogen receives a profit-split on U.S. sales of Rituxan from Genentech, plus a royalty on international sales and reimbursement on development work. In 2008, the company recognized $1,128 million (up 22%) in Rituxan revenues. To keep the solid growth up, both companies are working to expand Rituxan beyond its current use.
 
According to the American Cancer Society, CLL is the most common form of adult leukemia, accounting for one-third of all leukemia in the United States. About 90,000 Americans are living with CLL and it is estimated that more than 15,000 new cases will be diagnosed this year. Current treatments for CLL include Cephalon’s (CEPH) Treanda, GlaxoSmithKline’s (GSK) Leukeran and Bayer’s (BAYRY.PK) Campath.
 
We currently have a Neutral recommendation on Biogen. The company is the market leader in therapies for the treatment of multiple sclerosis (MS) and we believe that Biogen will continue to retain a leading position in the MS market
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Pfizer (PFE) announced that the US Food and Drug Administration’s (FDA) Vaccines and Related Biological Products advisory committee voted in favor (10 to 1) of data presented to support the safety and effectiveness of Prevnar 13, its 13-valent pneumococcal conjugate candidate vaccine. The favorable recommendation of the vaccine was based on data from 13 phase [...]

(PFE) Pfizer Earns Panel’s Backing for Prevnar 13

Companies featured in this segment: FPL Group Incorporated (NYSE:FPL), Siemens AG (NYSE:SI), GlaxoSmithKline plc (NYSE:GSK), AstraZeneca plc (NYSE:AZN), Schering-Plough Corporation (NYSE:SGP), Merck & Company, Incorporated (NYSE:MRK), Novartis AG (NYSE:NVS), Xstrata plc (LON:XTA)

Companies featured in this segment: FirstEnergy Corporation (NYSE:FE), Exxon Mobil Corporation (NYSE:XOM), BP plc (NYSE:BP), Siemen AG (NYSE:SI), Chevron Corporation (Chevron) (NYSE:CVX), Royal Dutch Shell plc (NYSE:RDS.A), InterOil Corporation USA (NYSE:IOC), GlaxoSmithKline plc (NYSE:GSK), Pfizer Incorporated (NYSE:PFE), Novartis AG (NYSE:NVS), Eli Lilly & Company (NYSE:LLY), AstraZeneca plc (NYSE:AZN), Wyeth (NYSE:WYE), Genzyme Corporation (NASDAQ:GENZ), Merck & Company, Incorporated (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), Santos Limited (OTC:STOSY), Petronet LNG Limited (BSE:532522)

Companies featured in this segment: Pfizer Incorporated (NYSE:PFE), GlaxoSmithKline plc (NYSE:GSK), Merck & Company Incorporated (NYSE:MRK), IMS Health Incorporated (NYSE:RX), Drax Group plc (LSE:DRX), KBR Incorporated (NYSE:KBR), ConocoPhillips (NYSE:COP), OAO Gazprom (OTC:OGZPY), Vestas Wind Systems A/S (CPH:VWS)

Companies featured in this segment: Southern Company (NYSE:SO), Foster Wheeler (NASDAQ:FWLT), American Electric Power (NYSE:AEP), GlaxoSmithKline plc (NYSE:GSK), Diageo plc (NYSE:DEO), JPMorgan Chase & Company (NYSE:JPM), Northern Foods plc (LSE:NFDS)

Companies featured in this segment: Fluor Corporation (NYSE:FLR), American Electric Power (NYSE:AEP), Southern Company (NYSE:SO), ReneSola Limited (NYSE:SOL), POSCO (NYSE:PKX), Suntech Power Holdings Company Limited (NYSE:STP), Ormat Technologies Incorporated (NYSE:ORA), Sanofi-Aventis (NYSE:SNY), GlaxoSmithKline plc (NYSE:GSK), Novartis AG (NYSE:NVS), AstraZeneca plc’s (NYSE:AZN), Mitsubishi Corporation (OTC:MSBHY), Sharp Corporation (OTC:SHCAY), CSL Limited (ASX:CSL), Mumias Sugar Company Limited (NBO:MSCL), Athi River Mining Limited (NBO:ARM), Kenya Power & Lighting Company Limited (NBO:KPLA), Daewoo Engineering & Construction Company Limited (SEO:047040)