The Thin Ice Enanta Was Standing On Has Cracked

Just two days after I posted this Gilead released some positive data. The thin ice Enanta was standing on cracked as I expected and the stock has lost 25%. You'll notice some very negative comments, you'll also notice things got very quiet very fast! I'll paste a snip from the conclusion. See the complete post here.

The risk-to-reward profile of its current partnerships, make Enanta just the sort of well managed biotechnology company I would recommend owning for the long haul, but I wouldn't start a position now at $37 per share. Given the lack of late stage candidates beyond ABT-450, the recent price is too dependent on a blended percentage of royalties from a not-yet-approved therapy for an increasingly competitive indication.

Enanta is certainly worth a spot in a watch list. It doesn't need Abbvie's combination to succeed, or even win approval, to remain buoyant. The risk is entirely on Abbvie. Enanta has no debts and is producing positive net income on a trailing twelve month basis. With four of the six Phase 3 trials associated with the Abbvie NDA to be completed by March 2014, an entry opportunity may present itself fairly soon. In the mean time I recommend keeping a close eye on this promising upstart.

Again the complete post is only available at Seeking Alpha here.

MacroGenics A Biotech Stock For Investors That Like A Floor Well Above Zero

Looking for a chance to reap huge rewards with a promising biotechnology company, but would like some sort of safety net high enough off the ground that you won't get bruised on the slightest hint of bad news. The Monoclonal Antibody (MAB) discovery machine that is MacroGenics $MGNX has enough steady milestone payments to keep afloat even if the worst happens to its wholly owned programs. Here's a snip from a report I published recently at Seeking Alpha (Full analysis here).

Big Pharma's hunger for access to monoclonal antibody development and production technology hasn't grown much over the past few years, but it isn't slowing either. Five of last year's top 20 drugs by sales contained antibodies. Although there has been a disconcerting amount Big Pharma dollars funding university based discovery, innovative biotechs are still getting plenty of attention.

Rookie deal maker of the decade

Fresh off its October IPO, MacroGenics (MGNX) has been getting a great deal of attention from deep pocketed deal seekers both in the US and abroad. The 13-year-old Rockville, Maryland company discovers and develops monoclonal antibody-based therapeutics for the treatment of cancer, autoimmune, and infectious diseases. Its candidates are generated via a suite of proprietary platforms that the drug industry values quite highly. The Company has entered into deals with titans like Gilead Sciences (GILD), Pfizer (PFE), France's Servier, and Germany's Boehringer Ingelheim.

Failure of a lead program during Phase 3 trials is the sort of news you would expect to cripple a budding biotech. MacroGenics suffered just this calamity, and promptly entered something of a golden age. The company quickly peeled itself off the lab floor after teplizumab, the diabetes treatment in-licensed by Eli Lilly (LLY), failed in October 2010. Less than a week after the disappointing announcement, the company announced deals with Pfizer and Boehringer Ingelheim potentially worth billions.

Read the complete analysis here.