One Guy's Investments: Annual Checkup -- CVTX

I haven't written much about CV Therapeutics (CVTX -- free RT quote), largely because I bought it on a newsletter recommendation and haven't become much of an expert on the science of this biotech company. The argument for CVTX that I found compelling was that they had a truly new treatment for chronic angina, an ailment that affects millions and that is currently treated with a cocktail of generic drugs that don't always work well for everyone. Their lead drug in that area, Ranexa, has completed phase III trials now and seems very likely to be approved -- and if current treatments continue to be lacking for many patients, they will find a good market, with possibilities for expanding into a blockbuster market in the future. I wrote a couple months ago that bad news for Beta Blockers might be good news for Ranexa, but that's just a wild guess. At the same time, CV's sales force has been built up over the last half of this year as they gear up to sell Aceon, which they licensed in from Solvay Pharmaceuticals, in the hypertension market. With several other late-stage compounds in development that seem to show real promise for other cardiovascular diseases, CVTX seems like a solid bet to have several important products on the market within the next few years. I expect there will be news probably early this year on approval for an expanded label for Ranexa, and approval for the new cardiac imaging agent Regadenoson, and their three other compounds in the clinic may supply some fodder for the news mill as well. If you're interested in more detail, Zacks recently published a long (pdf) analysis with their assessment of the potential of all the clinical compounds. I have a full position in CVTX that I acquired at an average cost of just about $21, so it has been a fine performer even if not as quick a mover as PDLI or VRTX ... but I expect good things over the next couple of years. I will hold on to see if Ranexa, in particular, can catch on quickly with cardiologists. I'll also try to monitor how Aceon is doing, because that will be the acid test for this new sales force before they bring their own compounds out of the clinic.

Labels: CVTX