Biotech earnings updates -- ISRG, MYGN, VRTX, CVTX
Lots of releases on my biotech companies yesterday and today, some great, some a little bit bad, most just the kind of non-news one often expects from an earnings release from a early stage biotech.
First, Intuitive Surgical -- some might not call this biotech as it's in the medical devices area, but I think of the whole next generation of health care companies as biotech so mabye I'm a bit broader than most. ISRG (get free real time quote from ADVFN) absolutely blew away estimates, again, and took off by 25%, again. In retrospect, of course, I wish I had bought some more yesterday while I was thinking about it ... but I still think my ideas had merit. It's true that their earnings are likely to be lumpy as long as sales of new robots is the major part of their earnings, but it so happened that these last two quarter have been really, really big lumps. My loss, I'll have to think about whether I'm willing to add to my position now at $90 -- this is really a bit of a crap shoot, long term I expect a lot of great growth so I should probably just buy, but short term I can't believe that this won't pull back at some point and give me a better price. We'll see which angel of my nature I follow this time.
Next, Myriad Genetics. They beat the analyst estimates by a bit, which isn't quite as dramatic for them as it is for ISRG since their earnings growth isn't necessarily what everyone's looking for just now -- and it didn't move the share price at all. MYGN's (get free real time quote from ADVFN) earnings from testing services did grow substantially more than predicted, which is great, and I think this part of their business is perhaps a little bit underestimated. But what we're all waiting for are their drugs -- and not even necessarily their top-line drug, the Flurizan for alzheimer's that is their farthest along. The news from that particular drug has been particularly so-so all along, as it is for most Alzheimer's compounds, so it seems likely that actual approval or solid sales would be a good lift for the company. But what we're really waiting on are their early stage drugs -- they show promise, but no news of significance just now so we'll just sit and wait and watch the testing business grow to soak up those drug development costs.
And finally, Vertex and CV Therapeutics.
CV Therapeutics had some surprisingly bad news yesterday in that they need to pull back one of their new drug candidates in Europe for additional research. That definitely hurt the shares, much more than any news about marginally bad losses in the balance sheet. No particular news on ACEON yet, which is what I was hoping to see, just that in their brief selling window before the end of the quarter they didnt' reach the milestones that require royalty payments yet. The real bad news was on ronalizine (Ranexa), which was rejected by European regulators and which will require another trial and resubmission. This sends a message that perhaps this flagship drug will have some trouble and require additional trials in the US as well given the current FDA climate ... so the stock tumbled a bit. CVTX needs Ranexa, but there is no reason that I've seen to suggest that it might not be approved -- hopefully it will just take a little longer, I'll definitely be keeping an eye on this one. According to an AP story, "CV said it plans to conduct one or more additional trials in order to satisfy regulators, but said it does not expect a large or lengthy trial to be necessary."
And Vertex is plugging right along -- they had a big charge this quarter which may have spooked a few folks, but that should have been expected from the retirement of convertible debt. The big news for VRTX (get free real time quote from ADVFN) will be the progress of their clinical trials, and on that front they appear to be on track. The CEO reiterated that they remain on schedule, and that phase 1b for VX-950 is underway and phase II shoudl begin in the fourth quarter, and phase II for VX-702 is fully enrolled. Those are the two real flagships of the pipeline, so good news that there are no announced hiccups just yet. New is going to come hot and heavy from Vertex over the coming year, so I expect lots of volatility -- hopefully much of the news will be good from their trials and reinforce everyone's hopes that VX-950, at least, might reach blockbuster status and be the first actual cure for HCV. After many years of disappointment Vertex really seems to have a few possibly hits on their hands -- let's hope it remains that way.
First, Intuitive Surgical -- some might not call this biotech as it's in the medical devices area, but I think of the whole next generation of health care companies as biotech so mabye I'm a bit broader than most. ISRG (get free real time quote from ADVFN) absolutely blew away estimates, again, and took off by 25%, again. In retrospect, of course, I wish I had bought some more yesterday while I was thinking about it ... but I still think my ideas had merit. It's true that their earnings are likely to be lumpy as long as sales of new robots is the major part of their earnings, but it so happened that these last two quarter have been really, really big lumps. My loss, I'll have to think about whether I'm willing to add to my position now at $90 -- this is really a bit of a crap shoot, long term I expect a lot of great growth so I should probably just buy, but short term I can't believe that this won't pull back at some point and give me a better price. We'll see which angel of my nature I follow this time.
Next, Myriad Genetics. They beat the analyst estimates by a bit, which isn't quite as dramatic for them as it is for ISRG since their earnings growth isn't necessarily what everyone's looking for just now -- and it didn't move the share price at all. MYGN's (get free real time quote from ADVFN) earnings from testing services did grow substantially more than predicted, which is great, and I think this part of their business is perhaps a little bit underestimated. But what we're all waiting for are their drugs -- and not even necessarily their top-line drug, the Flurizan for alzheimer's that is their farthest along. The news from that particular drug has been particularly so-so all along, as it is for most Alzheimer's compounds, so it seems likely that actual approval or solid sales would be a good lift for the company. But what we're really waiting on are their early stage drugs -- they show promise, but no news of significance just now so we'll just sit and wait and watch the testing business grow to soak up those drug development costs.
And finally, Vertex and CV Therapeutics.
CV Therapeutics had some surprisingly bad news yesterday in that they need to pull back one of their new drug candidates in Europe for additional research. That definitely hurt the shares, much more than any news about marginally bad losses in the balance sheet. No particular news on ACEON yet, which is what I was hoping to see, just that in their brief selling window before the end of the quarter they didnt' reach the milestones that require royalty payments yet. The real bad news was on ronalizine (Ranexa), which was rejected by European regulators and which will require another trial and resubmission. This sends a message that perhaps this flagship drug will have some trouble and require additional trials in the US as well given the current FDA climate ... so the stock tumbled a bit. CVTX needs Ranexa, but there is no reason that I've seen to suggest that it might not be approved -- hopefully it will just take a little longer, I'll definitely be keeping an eye on this one. According to an AP story, "CV said it plans to conduct one or more additional trials in order to satisfy regulators, but said it does not expect a large or lengthy trial to be necessary."
And Vertex is plugging right along -- they had a big charge this quarter which may have spooked a few folks, but that should have been expected from the retirement of convertible debt. The big news for VRTX (get free real time quote from ADVFN) will be the progress of their clinical trials, and on that front they appear to be on track. The CEO reiterated that they remain on schedule, and that phase 1b for VX-950 is underway and phase II shoudl begin in the fourth quarter, and phase II for VX-702 is fully enrolled. Those are the two real flagships of the pipeline, so good news that there are no announced hiccups just yet. New is going to come hot and heavy from Vertex over the coming year, so I expect lots of volatility -- hopefully much of the news will be good from their trials and reinforce everyone's hopes that VX-950, at least, might reach blockbuster status and be the first actual cure for HCV. After many years of disappointment Vertex really seems to have a few possibly hits on their hands -- let's hope it remains that way.
This article posted by One Guy @ 10/26/2005 04:43:00 PM 0 comments
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