13 Biotech Stock Predictions for 2013
BOSTON ( TheStreet) -- Thirteen biotech predictions for 2013:
1. The U.S. commercial launch of Arena Pharmaceuticals (ARNA) and Eisai's weight-loss pill Belviq will be a major disappointment. Belviq will also fail to receive European approval.
2. Sarepta Therapeutics (SRPT) will have another big year, with an accelerated approval filing mid year for the Duchenne muscular dystrophy drug eteplirsen in the U.S. and a significant and lucrative ex-U.S. partnership for the company's exon-skipping drug technology platform.
3. Orphan drug pricing comes under scrutiny and increasing criticism.
4. The Nasdaq Biotechnology Index will close 2013 flat or down single digits.
5. Amarin (AMRN) delays the commercial launch of its triglyceride-lowering fish-oil pill Vascepa to the second quarter due to manufacturing and supply issues. Vascepa sales fail to meet lowered expectations.
6. Gilead Sciences (GILD) hits a snag that delays the filing, approval or launch of its all-oral hepatitis C drug regimen. Investors also wake up to the realization that the commercial market for Hep C drugs is far smaller than expected. Gilead shares close in the red for the year. This is my Black Swan prediction for 2013.
7. FDA takes steps to liberalize overly restrictive conflict-of-interest rules that are preventing "A list" medical and scientific experts from participating in advisory committee meetings.
8. U.S. courts decide that off-label drug marketing is a form of constitutionally protected free speech and therefore legal.
9. "Expert networks" Gerson Lehrman Group and Guidepoint Global see a significant drop off in investor and doctor participation. Revenues plummet and the two companies either merge or one goes out of business.
10. By the end of the year, one or more of these companies will be gobbled up an M&A deal: BioMarin Pharmaceuticals (BMRN) , Onyx Pharmaceuticals (ONXX) , Medivation (MDVN) , Achillion Pharmaceuticals (ACHN) and Incyte (INCY) .
11. Cell Therapeutics (CTIC) raises money at least twice. (I needed at least one prediction guaranteed to come true.)
12. Celgene (CELG) will be the best-performing large-cap biotech in 2013.
Here's a look back at how well my 2012 predictions fared :
1. The Amgen(AMGN) strategy of returning cash to shareholders in form of share buybacks, Dutch tender offers and dividends is abandoned in favor of ramped up acquisitions i.e. Gilead Sciences buying Pharmasset. Large-cap biotech firms start acting like Big Pharma -- choosing to buy growth instead of seeking it from internal drug development.
Correct: Amgen remains the only biotech firm to offer a dividend. Amgen bought Micromet, Kai Pharma , and DeCode Genetics ; Gilead Sciences bought YM BioSciences (YMI) ; Biogen Idec acquired Stromedix; and Celgene acquired Avila Therapeutics .