For Subscribers

Get the complete article now!

Six analysts and top management from twelve sector firms examine the drug delivery sector in this special 75-page Drug Delivery issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info487.htm.

TWST: Louis, what, in your view, were the most important announcements and deve-lopments that triggered movement in the stocks over the past year?

Mr. Webb: Certainly one of the most important impacts was the September 11th attack, the ensuing recession, and the weakness in the stock market that followed. It affected most small companies and drug delivery companies tend to be centered in the micro-cap, small cap, and mid-cap range. I agree that the impact to the pulmonary delivery companies was severe in 2001. Concern over potential side effects and whether or not pending new products will receive timely FDA approval has significantly affected the valuations of the stocks.

TWST: Louis, how would you compare the various methods of drug delivery, in terms of ease of use, therapeutic efficiency and the cost of delivery?

Mr. Webb: The majority of drugs in the marketplace and those that are the subject of advanced delivery technology are orally administered. We believe oral delivery will remain the dominant formulation decision for some time. Simply put, it’s easy for a patient to take an oral dosage and it’s generally cost-effective, by virtue of the significant base of manufacturing capacity that exists. However, oral delivery is not necessarily the optimal formulation for any given drug. Consequently, many companies are working hard to identify the optimal formulation solution and commercialize it. Novel routes of delivery have emerged, such as pulmonary, transdermal, and transmucosal, that address historical shortcomings of oral delivery. These formulations help avoid some of the side effects associated with oral delivery, such as first pass metabolism. For instance, we’re interested in Nastech (Nasdaq:NSTK), which is one of a few companies that have developed an intranasal delivery platform. We believe this technology can offer a number of advantages over oral delivery. For instance, as drugs are taken up by epithelial tissue lining the nasal cavity and immediately pass into systemic circulation, first pass metabolism is absent and there is faster onset of action. Nastech technology also enables the formulation of large molecule drugs for intranasal delivery. Thus, this delivery technology is also viewed as a patient-friendly alternative to invasive injections.

TWST: Louis, will you comment on the emerging technologies that are targeting the new classes of drugs?

Mr. Webb: We believe that a large proportion of new drug development will come from the biologic area. Whether they’re gene therapy, monoclonal antibodies, or therapeutic proteins, these developments will have unique issues compared to drugs that have been historically self-administered by patients. In terms of making these innovations practical and patient-friendly for day-to-day use, drug delivery technology can add important advantages. Even more important is the potential for improving their therapeutic value by devising well-thought-out delivery systems. Earlier we touched on pulmonary delivery. This is an emerging technology suited for systemic delivery of large molecule drugs. Inhale and Aradigm are pioneering the application of this technology toward insulin therapy for Type 2 and Type 1 diabetes. We also believe that transmucosal delivery through intranasal administration is an emerging technology for biologic agents. Nastech is developing a number of intranasal formulations of biologic drugs, including interferon-alpha for use in treating hepatitis and human growth hormone.

This special issue includes:

1) Drug Delivery - In an in-depth (9,300 words) Analyst Roundtable, Michael J. Hearle, Senior Vice President at Leerink Swann & Co., Ian Sanderson, Managing Director at Managing Director at SG Cowen Securities Corporation, Jerry L. Treppel, Managing Director at Managing Director at Banc of America Securities and Louis C. Webb, Director of Equity Research at RBC Capital Markets, examine the outlook for the sector including investor concerns, earnings expectations and share specific stock recommendations.

2) Drug Development & Biotechnology Companies - In an in-depth (4,900 words) Analyst Interview, Ken Trbovick, Vice President in equity research at C.E. Unterbergy, Towbin, examines the outlook for the sector and shares specific stock recommendations.

3) Specialty Pharma, Generics & Vaccines - In an in-depth (3,200 words) Analyst Interview, Robert Wasserman, Director of Research at Sterling Financial Investment Group, examines the outlook for the sector and shares specific stock recommendations.

4) CEO interviews (average 2,500 words). Top management of twelve sector firms examine the outlook for their firm and the sector.