wolfhounds (29.20)

Let's change the subject - will big pharma come back

December 29, 2007 – Comments (0) | RELATED TICKERS: PFE , WYE.DL , DNA

These are desparate times for housing and big pharma stocks. We can be fairly sure housing prices will come back (hopefully before I want to sell), but too many drug companies including many large biotechs are on their knees. Just a few indications tell me that there's no cure in sight for the lack of new blockbusters. Teva's latest gambit will net them another former big money drug to their generic stockpile. PFE's latest purchase of a biotech, with a less developed pipeline than their first attempt which resulted in zero drugs, should make potential investors wary.

But what caught my eye recently was the potential windfall to REGN in it's collaboration with SA. If my fellow Fools are not familiar with REGN here's a brief story. The company went public in 1991 at $20 when potential drugs for Alzheimers and new technology to develop them caught the imagination. After being unable to bring a single drug to market using the public investor's money, they have peddled their genetically modified mice to a number of collaborators who also have had no success. Now SA is pegging it's hopes (and substantial up front payment) that those mice can produce drugs to treat heart, diabetes, and asthma conditions. (The price if REGN predictably popped on the news).

If you read REGN annual reports and press releases you might be as easily convinced of their technology as SA was. Or just desparate enough to try anything.