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April 19, 2007
Let A Thousand Flowers Bloom
Posted by Derek
If you want to see a bunch of press releases from biotech companies that you've never, ever heard of in your life, just go over to Google News and type in "AACR", sorting by date. That meeting just wound up, and it was the usual fiesta of early- and late-stage oncology data.
But cancer is an odd field for drug development. There are (relatively speaking) many more targets, since the disease itself is a huge fragmented bunch of different indications. And we don't have nearly enough knowledge to have a good idea - any idea, most of the time - about which of these targets are more likely to work, and against which forms of cancer. The trials themselves tend to be smaller (thus cheaper), since the course of the disease is often so relentless, and if you get a drug to market, you don't have to take out ads on the Super Bowl to promote it to oncologists.
All that means that the entry barrier to the field is lower, and there are plenty of niches. And boy, are they filled by a lot of microscopic companies. I keep up with things fairly well, but there are outfits presenting at AACR that might as well be from the asteroid belt for all I know about 'em. . ..
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1. Hap on April 19, 2007 11:49 AM writes...
I hope the same thing that happened to the thousand flowers doesn't happen to the thousand cancer drugs...
Permalink to Comment2. David Young MD on April 19, 2007 4:10 PM writes...
Yes, I was at the meeting. Lots and lots of targets. Seems that every receptor tyrosine kinase studied. Many new companies being named and ideas that will take 6 to 8 years to sort out. I don't know how they hang on for so long.
I keep a list of these investigational drugs for cancer and my list is 700 plus. Having attended the AACR, I will have to add another 50 to 100 new investiational drugs. Of course, some of the compounds tests have not advanced beyond cell cultures, so they would not really qualify as a contender yet.
Permalink to Comment3. Retired Med. Chemist on April 20, 2007 9:01 PM writes...
Yes, this is the area you can do some good science without burning a hugh hole in your pocket. If you get a hit, some Pharma will
Permalink to Commentlikely license it, for the same lower cost reason.
They can get an indication from relatively small
trials and off they run.
Sometimes, as in the case of Kosan, they licensed
from NCI a pair of good Hsp90 inhibitors and
are in Phase 2-3 in a couple of years.
4. Joseph Jones on April 23, 2007 11:30 AM writes...
Some of the web casts on their website seem to be quite promising though.
I've seen a few of those micro companies even going public on early cell culture/Xenographs data, assuming they hold the next billion dollar blockbuster drug.
Being a new broker, I was wondering if I could find some help on investigating(valuating?) such companies from an investor perspective. There have to be some with reality and/or potential. Anyway I enjoyed reading your blog and thought I should write here.
Permalink to Comment5. wcw on April 23, 2007 5:34 PM writes...
Valuing them as a broker?
1) have your clients index. Yeah, you won't get paid, but..
2) estimate the potential market. guesstimate the chance of success. divide this latter by 10. or 100. multiply. discount at a high rate. compare to the market cap. voila, you have a valuation
3) notice how much of crapshoot this is
4) see step 1
Now, I have made and lost money on small biotechs, but I'll tell you one thing: I would never have a widow or orphan invest in a single one, ever.
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