Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
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Special
Note |
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As we have stated in previous editions,
the OTC Journal believes Biotechnology will be one of the best performing
sectors in the market throughout the first decade of the 21st century.
We are actively seeking out biotech companies with unique products and
proprietary market niches on behalf of our members who are seeking above
average returns.
We should be publishing our long
awaited February profile early next week. Please check our home page at
www.otcjournal.com
frequently for an update starting next Tuesday morning as the market opens.
In the interim, this weekend's edition
contains our thoughts on the upcoming Biotech revolution. Enjoy the long
holiday weekend, and check our web site on Tuesday morning first thing.
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The
BioTech Revolution- A Leading Group For the First Decade of the 21st Century |
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Vast fortunes were accumulated in
the 80's and 90's as the computer evolved into an integral part of our
daily lives. Companies like Microsoft, Cisco, Oracle, Intel, Sun Microsystems,
and Dell Computer yielded massive profits for shareholders during the twenty
five year meteoric growth phase of this industry.
The BioTech industry is poised
to provide those same kind of returns in the first decade of the 21st Century.
The fruits of innovative research will propel more new drugs to market
than ever before. The paradigm has shifted from technology/internet companies
to BioTech.
Serving as evidence of this paradigm
shift is the recent "rebalancing" of the NASDAQ 100. Thirteen companies
were booted off; all of them technology. Of the thirteen newly added; eight
of them are BioTech.
During the 10 year period between
1976 and 1985 the FDA approved just 198 new drugs. Last year alone, the
number of new drug approvals skyrocketed to 160. That figure is expected
to climb even higher in 2002. At present, an astonishing 643 new
pharmaceuticals are nearing the final stages of the FDA's testing
and approval process according to a recent report prepared for the US Government.
Enormous returns are likely for investors in the right companies as some
of these 643 new therapies come to market.
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Factors
Fueling the BioTech Revolution |
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The chart of the biotech index reveals
a 53% climb to the upside from the September low to the early
December high. Stocks have given back ground recently as company guidance
for the immediate future is sobering. This "reality" correction of the
last three weeks has yielded a 50% retrenchment in the biotech index, suggesting
entry levels are becoming attractive again.
The BioTech revolution is
being fueled by many factors. Expedited FDA Approval procedures were implemented
during the Clinton Administration, reducing the average clinical testing
period from 15 years down to 5 years.
In addition, the recent breakthroughs
in Human Genome Mapping have provided bio-scientists with
revolutionary new tools to aid in identifying the underlying causes of
disease and help accelerate the pace of the development of potential cures.
Companies like Human Genome Sciences (NASDAQ: HGSI) are providing
bio-scientists with exciting new tools to help speed the development of
revolutionary treatments.
While it is estimated the FDA approval
process requires an investment north of $150 million, the return on investment
associated with a successful new drug introduction is staggering. 40% to
50% of new drugs making it to Stage III clinical trials never get approved,
but successful approvals can generate billions in profits for drug companies.
In other parts of the world, barriers
to entry are more relaxed for new drugs, causing increased competition,
lower margins, and lower profits. Patent protection and stringent FDA requirements
still keep the US pharmaceutical market positioned as the most coveted
in the world.
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Potential
Major Breakthroughs |
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The following is a list of potential
major breakthroughs for 2002:
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ViroPharma (NASDAQ: VPHM):
The
Common Cold. ViroPharma is developing Picovir, purported
to be the magic cure for the common cold. The company specializes in novel
therapeutics for the treatment of diseases caused by RNA viruses. Such
viruses are responsible for a host of common disorders, including certain
types of meningitis, hepatitis, and the common cold. Many analysts feel
an approval could be coming late this year for Picovir.
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Maxim Pharmaceuticals (NASDAQ: MAXM):
Cancer
Therapy. The Company's lead drug candidate, Ceplene™, is
currently being tested in Phase 3 cancer clinical trials in 12 countries
for malignant melanoma and acute myelogenous leukemia, and in Phase 2 trials
for the treatment of hepatitis C and renal cell carcinoma.
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Medarex (NASDAQ: MEDX):
Arthritis.
Phase III trials were recently started on MDX-CD4, a treatment for
rheumatoid arthritis. MDX-010 is currently undergoing several multi
center Phase Phase I/II trials in prostate cancer, melanoma and other malignancies.
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Axcan Pharma (NASDAQ: AXCA): Ulcers
and Other Stomach Problems. Axcan
is a leading specialty pharmaceutical company within the field of gastroenterology
in North America and Europe. This company posted fiscal year revenues of
$104.5 million dollars and earnings of $11.5 million. Helicide,
Axcan's patented, oral, single capsule, triple therapy treatment
for H. Pylori infection (the leading cause of peptic ulcers and a potential
cause of gastric cancer) should be FDA approved later this year.
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DUSA Pharmaceuticals (NASDAQ: DUSA):
Cancer
Detection. The company's main product Levulan® PDT/PD
is a platform used for the detection and treatment of a variety of superficial
conditions, such as early cancers, pre cancers and skin conditions. Levulan
apparently has wider applications and may add to the bottom line in the
not too distant future. DUSA initiated three Phase I/II Levulan PDT clinical
trials.
As mentioned earlier, 160 new drugs
were approved by the FDA last year. There are currently 643 new drugs
with a realistic chance of success in the FDA pipeline. Companies will
make staggering profits as many of these new therapies come to market,
and investors in the right stocks will enjoy the ride.
Please check our website
beginning Tuesday morning for our next profile.
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