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Two analysts and top management from thirty sector firms examine the Private Healthcare sector in this 108 - page Private Healthcare Issue from The Wall Street Transcript available at (212/952-7433) or http://www.twst.com/info/info628.htm

TWST: What has gone on in the biotech arena over the past year or so from a funding point of view?

Dr. Ghodsian: From a funding point of view, we have actually had very strong years, and this has been very positive for the industry. In 2000, we had a record amount of public financing for biotech companies, with over $33 billion raised. 2001 was the second best year for the industry, with about $12 billion in public financing. To put things in perspective, the third best year was the 1996 rally, when the industry raised about $7 billion. The industry has raised close to $7 billion thus far in 2002.

TWST: Is it also because of what appear to be growing delays in getting product to market?

Dr. Ghodsian: Clearly there has been some of that concern. However, I was personally very encouraged by the recent FDA panel recommendation of AstraZeneca’s (NYSE:AZN) Iressa for the treatment of lung cancer. I think that bodes well for the industry, because there are several biotech companies working on the same target, the EGF receptor. We also heard that the White House has named a candidate for FDA Commissioner. So suddenly we have a few rays of hope on the FDA front.

TWST: It’s certainly a change to finally get someone to fill that position.

Dr. Ghodsian: Yes, the FDA situation was one element hurting the industry, both because of the void left by the lack of an FDA Commissioner and the number of product approval delays. One of the most significant ones, for example, was the J&J/Alkermes (JNJ/ALKS) controlled release formulation of the approved drug Risperdal for schizophrenia. Everybody felt that the new formulation approval was a slam dunk. Nevertheless the FDA came back with a non-approvable letter based on some preclinical issues. I think events like this have made investors more skeptical about the FDA approval process. That’s why I was happy to see the double dose of good news with AstraZeneca’s panel recommendation and nomination of an FDA Commissioner.

TWST: What can we read into AstraZeneca’s recommendation?

Dr. Ghodsian: I think the panel is stating that when it comes to a deadly disease, such as lung cancer, with very little effective treatment, even a small improvement in outcome is viewed as positive. In this case, the panel believed that a 10% response rate in patients refractory to chemotherapy was enough to provide clinical benefit.

TWST: That really wasn’t much to talk about.

Dr. Ghodsian: Right. And if you recall, Iressa has actually had a rocky development path. Although AstraZeneca had positive data from its Phase II, non-controlled monotherapy trials in refractory patients, the drug did not show survival benefit in combination with chemotherapy. Yet despite that, the panel thought that the monotherapy data was encouraging enough to warrant final approval of the drug, given the nature of the disease and lack of effective therapies. I think the recommendation is also based on the panel’s compassion for lung cancer patients and certainly hope that this will set a precedent, because there are many cases where drugs that have shown some clinical benefit for deadly diseases have not been recommended by the FDA panel.

Funding Biotech Companies - In an in-depth (3,000 words) Analyst interview, Fariba F. Ghodsian, a Managing Director and Director of Healthcare Research at Roth Capital Partners, examines the outlook for the sector and shares specific stock recommendations.

Funding Private Healthcare - In an in-depth (2,700 words) Analyst interview, Carl L. Gordon, a founding General Partner of OrbiMed Advisors LLC, examines the outlook for the sector and shares specific stock recommendations.

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