Message-ID: <11065011.1075840983052.JavaMail.evans@thyme> Date: Sat, 19 Jan 2002 15:49:25 -0800 (PST) From: bounce-smallcapdigest-871164q@lyris.smallcapnetwork.net To: h..lewis@enron.com Subject: Health Is Wealth Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: "SmallCap" @ENRON X-To: Lewis, Andrew H. X-cc: X-bcc: X-Folder: \ExMerge - Lewis, Andrew H.\Deleted Items X-Origin: LEWIS-A X-FileName: andy lewis 6-25-02.PST If you are reading this message in plaintext or if you have an AOL address = you must click on this link: http://www.smallcapnetwork.net/archive/listser= v/20020119-1.html and wait for a web page to automatically open up to prop= erly read this newsletter.=20 [IMAGE] =09 [IMAGE] Dow Jones [IMAGE] 9771.85 -78.19 5:08 am EST, Sat., January 18, 2= 002 [IMAGE] NASDAQ [IMAGE] 1930.34 -55.48 For info, visit www.smallcapne= twork.net . [IMAGE] S & P 500 [IMAGE] 1127.57 -11.31 To be removed, ple= ase click here . [IMAGE] Russell 2000 [IMAGE] 474.37 -8.02 VOLUME 02= : ISSUE 6 =09 [IMAGE]=09 Health Is Wealth It's PARTY time! 2002 is expected to be the coming out = party for the biotech sector. The fruits of innovative research performed i= n the past few years will propel a new pipeline of drugs to reach the marke= t. This means that many small companies may be potentially sitting on drugs= or therapies that could generate billions in sales and profits. The succes= s of Genentech in the 80's helped inflate a biotech bubble that eventually = imploded in the late 80's and early 90's. However, the trickle down effect= produced a new breed of scientist/entrepreneur. These future biotech CEOs= realized that they could go off on their own to pursue research without th= e bureaucracy that often plagues large corporations and academic institutio= ns. Moreover, the prospect of amassing vast personal wealth also played a = part. These above factors are the driving forces that are fueling the curr= ent biotech sprint. The new paradigm has shifted from internet/technology= companies to biotech. This is where the next major area of expansion will = be. Even the Nasdaq 100 (QQQ ) has expelled some of its most high profile = tech names in favor of biotech companies. [IMAGE] Our lives in the ne= xt few decades will be touched by the biotech industry more than any other.= Thousands of new jobs will be created, and as technology and biotechnology= start converging to one, the next great industry will be born. Ultimately= , for mankind, illnesses that were once thought to be fatal and incurable w= ill soon become treatable with simple, effective, and advanced procedures. = This is not only welcome news for the sick and the dying, but also for inve= stors who are smart enough to cash in on all the progress leading to this e= volutionary panacea. During the entire 10 year period between 1976 and 1= 985, the FDA approved only 198 new drugs. In 2001 alone, the number of new = drug approvals skyrocketed to 160. That figure is expected to climb even hi= gher in 2002. At present, an astonishing 643 new pharmaceuticals are nearin= g the final stages of the FDA's testing and approval process, according to = a recent report prepared for the US Department of Health and Human Services= . Many investors are already well aware of the coming biotech boom. The q= uestion is separating the contenders from the pretenders. Nonetheless, judg= ing from the recent rise in key biotech stock indexes, investors are bankin= g on biotechs, hoping that they'll generate whopping returns reminiscent of= those investors pocketed from once hot tech stocks such as Cisco (CSCO ) ,= Microsoft (MSFT) and other tech stalwarts. Such hopes are not entirely m= isplaced. There will indeed be companies that will develop and commercializ= e drugs/applications with billion dollar potential. [IMAGE] Developing new= pharmaceutical compounds is costly and time consuming. Yet the rewards can= be enormous, both for the companies involved and for their investors. Befo= re new pharmaceuticals can be sold, they must successfully complete three p= hases of testing as mandated by the FDA. This process can take as long as 1= 5 years, although expedited procedures enacted during the Clinton administr= ation have reduced the testing period in some cases to less than five years= . The earlier a new drug is in the development process, the higher the r= isk the drug does not ever reach the market. According to Tricia Nagle, man= aging editor of the newsletter Drug and Market Development, more than 90 pe= rcent of all new biopharmaceuticals under development never even make it to= the first part of Phase III trials. If a company is fortunate enough to re= ach Phase III testing, it is still not a guarantee of success. It is estima= ted that roughly 40 percent of potential new drugs fail their final phase I= II tests. The following are biotech companies with applications that hav= e the potential to make big splashes in 2002. ViroPharma (VPHM ): Cure fo= r the common cold. The company's future rests on Picovir, the magic cold tr= eatment. ViroPharma filed its New Drug Application (NDA) with the FDA for U= S approval of Picovir on July 31st, and it was accepted for review on Octob= er 1st. With an anticipated FDA review time of 12 months, we expect the co= mpany to hear back from the FDA July 31, 2002, with a final approval antici= pated by the end of the third quarter. This is your typical "grand slam" or= perishes type of biotech company. Maxim Pharmaceuticals (MAXM ): Canc= er Treatment. Ceplene?, is currently being tested in Phase III cancer clini= cal trials in 12 countries for malignant melanoma and acute myelogenous leu= kemia, and in Phase II trials for the treatment of hepatitis C and renal ce= ll carcinoma. Phase III clinical trials for Ceplene , the treatment of adva= nced metastatic melanoma, is expected to begin 1Q/02. Maxim will also be a= dvancing its hepatitis C infection program with a Phase II trial in 2002. = Medarex (MEDX ): Cancer Treatment & Arthritis. Medarex utilizes its own pa= tented UltiMAb-Mouse system to create fully human antibodies for itself and= others, offering a full range of antibody development and manufacturing ca= pabilities. 15 UltiMAb-derived antibodies are expected to be in the clini= c by the end of this year. Collaboration agreements with 10 new partners sh= ould be initiated during 2002. Phase III trials were recently started on M= DX-CD4 a treatment for rheumatoid arthritis. MDX-010 is currently undergoin= g several multi center Phase I/II trials in prostate cancer, melanoma and o= ther malignancies. MDX-210 is being evaluated in patients with solid tumor= s. MDX-33 is currently being tested in patients with the auto immune diseas= e ITP. Axcan Pharma (AXCA ): Gastrointestinal Treatment & Cancer. Axcan i= s a leading specialty pharmaceutical company within the field of gastroente= rology in North America and Europe. Key products including ULTRASE for panc= reatic enzyme replacement, PHOTOFRIN photodynamic therapy for lung and esop= hageal cancer and CANASA rectal suppository for inflammatory bowel disease.= Helicide, Axcan's patented, oral, single capsule, triple therapy treatment= for H. Pylori infection (the leading cause of peptic ulcers and a potentia= l cause of gastric cancer) should be FDA approved later this year. It's go= od to know someone is fighting our gastro problems. DUSA Pharmaceutica= ls (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 conditi= ons. Levulan apparently has wider applications and may add to the bottom l= ine in the not too distant future. DUSA initiated three Phase I/II Levulan= PDT clinical trials. In dermatology, in co-operation with Schering AG, Ger= many, trials are now well underway in onychomycosis (nail fungus) and warts= , joining the already ongoing study in acne. Initial results from all of th= ese studies are expected during early to mid 2002. Investing in the biote= ch world is more interesting and fruitful than any other sector. Biotech i= nvestors most often seek to find the company with the cure for something. = The companies mentioned above are on the "application side", where returns = are much higher, although accompanied with the downside of greater risk. I= n addition, most biotechs show little or no revenue, and almost all in a se= a of red ink. However, finding "the one" will lead to the kind of home run= that each investor only dreams about. The monetary gains are quite substan= tial but so are the potential losses if something goes awry. Just look at = Imclone (IMCL ) - a perfect example of what happens when a dream turns to a= nightmare. But much like the internet/technology sector, there are two = types of companies. First, we mentioned the application companies which ar= e often too risky for many investors. The second type of company is on the= infrastructure side, usually referred to as the "picks and shovels". Thes= e biotechs are the suppliers and drivers to the application companies. Thi= s relationship is similar to how Cisco (CSCO ) and Oracle (ORCL ) has helpe= d power all the Webvans and eToys of the world. Infrastructure companies= often have real revenues and earnings derived from supplying application c= ompanies. Owning stock in infrastructure companies helps diversify much of= the downside risk because there are so many startups aiming to develop tha= t billion dollar cure. They will spend millions on goods and services which= in turn, allow the infrastructure companies to build their war chest of ca= sh for use in getting into the application side of the business in the futu= re, creating a biotech behemoth. Any company can wake up one day and deci= de to find a cure for any disease, but trying to become an infrastructure c= ompany is very difficult because of the barriers to entry. Now the burnin= g question is who are these "picks and shovels" companies? The SmallCap = Digest has discovered a biotech company that fits the bill. We will be brin= ging you more information on this company very soon. Once we have conducte= d a complete due diligence on this company we will inform our subscribers o= f the findings. Stay Tuned! =09 D I S C L A I M E R :[IMAGE] The SmallCap Digest is an independent electro= nic publication committed to providing our readers with factual information= on selected publicly traded companies. SmallCap Digest is not a registere= d investment advisor or broker-dealer. All companies are chosen on the basi= s of certain financial analysis and other pertinent criteria with a view to= ward maximizing the upside potential for investors while minimizing the do= wnside risk, whenever possible. Moreover, as detailed below, this publicat= ion accepts compensation from third party consultants and/or companies whic= h it features for the publication and circulation of the SmallCap Digest or= representation on SmallCapNetwork.net. Likewise, this newsletter is owned= by TGR, LLC. To the degrees enumerated herein, this newsletter should no= t be regarded as an independent publication. 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We encourage our readers to invest carefully and read the inves= tor information available at the web sites of the Securities and Exchange = Commission ("SEC") at http://www.sec.gov and/or the National Association o= f Securities Dealers ("NASD") at http://www.nasd.com . We also strongly re= commend that you read the SEC advisory to investors concerning Internet Sto= ck Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm .= Readers can review all public filings by companies at the SEC's EDGAR page= . The NASD has published information on how to invest carefully at its web = site. =09 --- You are currently subscribed to smallcapdigest as: andrew.h.lewis@enron.com To unsubscribe send a blank email to leave-smallcapdigest-871164Q@lyris.sma= llcapnetwork.net