As part of our Biotechnology Report we spoke with Serge Depatie of Natcan Investment Management Inc.  In the report Mr Depatie reports on the swings of volatility in the global healthcare market. He also gives his view on investment trends in the industry;

Mr. Depatie: An important trend we’re seeing is the, I would say, rejuvenation of biotech drugs in antibody classes. Monoclonal antibodies had a big market expansion in the mid to later 1970s to 1980s, and these drugs are being reformatted in a less toxic and more efficient manner. We’re going to see a new wave of these biotech drugs, which should help the larger players to start off with and also to some extent the small biotechs. The leading player is Amgen (AMGN) there and it acts as a flagship to the industry. They have a new drug called denosumab for pre­vention of bone cancer, which represents potentially over a $5 billion market, which would basically reinvigorate the company and send it on a growth path again. If this drug works, and all in­dications are good and as the expectations become high and the stock appreciates well, it should pull all boats in the sector, in that other companies will also do well. We definitely have increased our activity in the biotech sector in the last year.

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As part of our Exclusive Biotechnology Report we spoke with Maged Shenouda, Executive Director, Health Care Group  of UBS Investment Research gave us some great insight into Large Cap Biotechnology and his top picks;

Mr. Shenouda: So right now, we like Gilead(GILD). They have a dominant HIV franchise. Their base business is doing well. We also expect upside from clinical data releases next year with a product called GS 9350, their non-protease booster, as well as elvitegravir, their integrase inhibitor. Combine that with potential changes for HIV treatment guidelines, where patients would be treated earlier at CD4 counts of 500 and less versus 350 currently. This would bring more patients into treatment. So that’s more of a shorter-term commercial upside opportunity.

Then we like Celgene (CELG). We think it’s the best growth story in biotech. Its geographic expansion outside of the U.S. is going to maintain its top-line growth at the top of its peer group. We also expect positive data releases. Specifically, we anticipate positive detailed data from the MM- 015 trial at the ASH meeting in December. We also like Human Genome Sciences (HGSI). We’re excited about the prospects of BENLYSTA, that’s its lead development-stage product for the treatment of lupus or SLE. They had a positive readout with the first Benlysta Phase III trial. We think that they are likely to have a positive readout with the second Phase III trial, called BLISS- 76, reading out in November. We also believe this is a strong acquisition target.

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In our recent report on Medical Devices  Edwards Life Sciences was a top pick of Kristen M. Stewart,Vice President and Senior Analyst , Credit Suisse  and here is why ;

Ms. Stewart: One company that I like at the present time is Ed­wards Lifesciences. It’s more of a mid-cap cardiovascular company. They are developing a new product, it’s called the transcatheter heart valve. They are selling it in Eu­rope and are in clinical trials in the United States. It’s really one of the largest areas of new innovation. I think transcatheter heart valves can certainly be the next big thing in medical devices. It could be a multibillion-dollar market opportunity for a company of that size; that is very significant. These valves can really drive accelerating top- and bottom-line growth.

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Our featured interview this week is with Zynex, Inc.(ZYXI)

The complete interview with Thomas Sandgaard, President & CEO, is now available.

Zynex, Inc. engineers, manufactures, markets and sells its own design of electrotherapy medical devices in two distinct markets: standard digital electrotherapy products for pain relief and pain management; and the NeuroMove(TM) for stroke and spinal cord injury (SCI) rehabilitation. Zynex’s product lines are fully developed, FDA-cleared, commercially sold, an have been developed to uphold the Company’s mission of improving the quality of life for patients suffering from impaired mobility due to stroke, spinal cord injury, or debilitating and chronic pain.

Recession and the Government seem to be the buzz words in all healthcare affairs these days. When we spoke with Jeff Jonas of GAMCO Investors, Inc. as part of our Medical Devices Report he gave his view on both in regard to the Medical Devices Sector;

Mr. Jonas: “On the cardiovascular side, there has been pretty minimal impact from the recession because you can’t defer these procedures. If they are not an absolute emergency, they are something that needs to be done in a matter of weeks, so they re­ally can’t be deferred, and it has been a pretty minimal impact from the recession. Health care reform is kind of tough for us to comment on right now; it’s still play­ing out between Congress and the president. For the device industry, you’ve got two different things play­ing against each other. If you do cover more Americans, you should see more procedures done in slightly higher volume, although many of these car­diovascular procedures get done al­ready, even if the patient can’t pay. Then Congress is trying to get some price concessions out of the device-makers. The hospitals cut a deal to save about $150 billion over 10 years, and while they didn’t specify how much of that would come from de­vices, they would certainly expect to see some price pressure from it. Then there is this proposal from Max Bau­cus yesterday to actually implement a fee system on some of the device-makers based on their market share. That will be something that would hurt their profitability. So all in all, it could come out to be fairly neutral for the device-makers or could come out to be a slight negative in terms of price pressure. But they have ways to manage their manufacturing and SG&A costs to offset a good portion of it.”

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The stimulus seems to be  encouraging the Healthcare IT stocks according to  Richard Close Managing Director, Equity Research of Jefferies & Company, Inc., as part of our Healthcare IT Report, he gave us his view on the industry and which stock are rising ;

“Despite our cautiousness, the stocks have taken a run upward with the overall change in market sentiment, with people going towards higher beta names and, as a result, the healthcare IT stocks have definitely moved to the upside. Although the economy is improving from the near grinding halt earlier this year, I still believe this is a challenging business pur­chasing environment over the next couple of quarters. We’ve been telling investors not to chase these names at this point because some of the stocks have doubled from the lows of the year. We would look at pullbacks to provide entry points to get more aggressive on shares. Despite our short-term cautiousness, an investor can build a favorable longer-term scenario as the stimulus kicks in. Again, in­vestors should be opportunistic in taking positions in these names.”

To see who the top picks in Healthcare IT are check our TWITTER

Our featured company for this week Burzynski Research Institute(BZYR) can be read in full here.

Burzynski Research Institute is a biopharmaceutical company which is developing cancer treatment based on genomic principles. We are in the process of obtaining FDA approval for marketing four antineoplaston (ANP) drugs. Two of these antineoplastons – Atengenal® and Astugenal®, are administered intravenously, and the other two -  Cengenal® and Fengenal® are administered orally in capsules.

Our other special focus this week is on Life Science Tools. As part of our interview with analyst Tycho Peterson of JPMorgan’s healthcare group, we talked a little bit about what the most significant technological advances going on in this space. Here’s what he had to say:

Mr. Peterson: The biggest one is the dramatic reduction in the cost of obtaining sequence information. This is the standard elasticity curve. It was not that long ago, going back to 1999-2000 when we had the human genome project that it was $3 billion to sequence the first genomes. Now, we are at the point where for $50,000 you can get your genome sequenced and there is a fairly near-term horizon to get to the $1,000 genome in the next couple of years. What that is going to do is open up sequencing to whole new markets…At $1,000 dollars, however, I do not see any reason why most people would not get sequenced, why newborns wouldn’t get sequenced, and that would become part of the medical record, why cancer patients wouldn’t have a tumor sequenced because the tumor is evolving, and you can sequence the tumor every six to twelve months and based on that information, develop a highly-catered drug regimen.

For the complete Life Sciences report, including the full interview with Mr. Peterson, as well as interviews with top CEOS in the space, click here. 

Our featured company for this week Burzynski Research Institute(BZYR) can be read in full here.

Burzynski Research Institute is a biopharmaceutical company which is developing cancer treatment based on genomic principles. We are in the process of obtaining FDA approval for marketing four antineoplaston (ANP) drugs. Two of these antineoplastons – Atengenal® and Astugenal®, are administered intravenously, and the other two -  Cengenal® and Fengenal® are administered orally in capsules.

We talked with Chairman and Founder Stanislaw R. Burzynski M.D., Ph.D. who spoke in great detail about the company and current FDA Trials;

Dr. Burzynski  “…since the beginning of this year, we had three announcements regarding our clinical trials. We began with the announcement about the treatment of inoperable brainstem glioma. These are very difficult tumors to treat, perhaps the most difficult in the entire field of oncology. They cannot be operated because they are in the brainstem, and these are the deadly tumors. If you use radiation therapy, which is the only treatment available, over 90% of patients will die during the first two years. We did clinical trials, which were quite large. We had 94 evaluable patients, and our survival for newly diagnosed patients at two years is approximately 50%, and at five years it’s about 30%. We have a number of patients who are now surviving over ten years, and our longest survival is over 22 years. So if somebody is surviving five years, then such patients are considered cured. That’s the first announcement, which we made at the beginning of the year because we received FDA permission to proceed with Phase III trials for brainstem glioma. ”

A feature here at TWST, in addition to our traditional roundtables and one on one interviews, is Off the Record. Here the analysts and CEOs speak on the condition of anonymity, telling us the picks they wouldn’t necessarily be able to share otherwise. Here’s what they picked as part of our Biotech special focus:

Celgene (CELG)-

• “I would give kudos to Sol Barer at Celgene. I think when they announced their acquisition last year of Pharmion, there was quite a lot of scrutiny on that, and I think the deal has worked out very well for them in terms of getting the competitive advantage of their drug Vidaza.”
• “Celgene bought Lifebank and I think they have a fabulous management team in their stem cell division and cellular division”

Genzyme (GENZ)-

• “I would point to Genzyme‘s Henri Termeer as one of the good guys. He has kept costs down at Genzyme and has really figured out ways to grow the business and diversify his revenue stream, so he would be on the top of my list.”
• “I’d have to mention Henri Termeer at Genzyme. I think the company has been very aggressive in going out and embarking on licensing deals for potentially best-in-class drugs for their long-term pipeline. They’ve been able to manage costs very well through some volatile markets recently. He should be viewed as top
  class management.”

For the full Biotech issue, including a roundtable forum on investing in Biotech stocks, as well interviews with top CEOs, click here.