J.P. Morgan places confidence in biotech sector
BANGALORE, India J.P. Morgan has revealed its confidence in healthcare stocks in the biotech sector, citing historical indications that they will beat the U.S. recession and out-perform the market over the next six to 12 months, according to published reports.
The Amex Biotechnology Index .BTK fell about 3 percent this year while the S&P 500 has fallen at about 7 percent, according to published reports, which supports their claim. The brokerage also cited their “three horsemen,” or preferred choices, as Genentech, Gilead and Celgene, and predicted that they will rise more than 5 percent in 2008.
J.P. Morgan expects its market value to rise and the sales of their drugs, such as Celgene’s cancer drug, Revlimid, and Gilead’s two HIV drugs, Truvada and Atripla, to beat Wall Street estimates.
In response to its focus on the biotech sector, Morgan has shied away from investing in small- to mid-sized stocks that may be in danger because of the recession. “We believe poor share performance, despite improved earnings outlooks, clearly demonstrates the insignificance of earnings—and even revenue—for small- and mid-sized biotechs, especially in a challenging macro environment,” the company reported.
Rite Aid posts sales increase for March
CAMP HILL, Pa. Rite Aid on Thursday reported a same-store sales increase of 2.6 percent (which does not yet include the Brooks/Eckerd acquired stores) for the four weeks ended March 29.
Pharmacy same-store sales increased 1 percent, which included an approximate 493 basis points negative impact from new generic introductions. Front-end same-store sales were up 5.7 percent. March same store sales were positively affected by a shift to a March Easter this year from an April Easter last year (March 23 this year as compared to April 8 last year).
Total drug store sales for the four-week period increased 50.7 percent to $2 billion. Prescription revenue accounted for 67.6 percent of drugstore sales, and third party prescription revenue represented 96.2 percent of pharmacy sales.
FDA grants orphan designation for MELAS syndrome drug
WASHINGTON Sirtris Pharmaceuticals has been granted orphan drug designation for resveratrol by the Food and Drug Administration, according to published reports.
Resveratrol is a drug used to treat MELAS syndrome, a progressive fatal aging disease that produces symptoms of muscle weakness, fatigue, recurrent headaches and seizures. The government’s grant is usually offered in cases in which companies are discovering treatments for rare drugs, and the grant would allow the company to speed up their testing period.
Sitris has decided to focus on the SIRT1 gene, which is a gene tied to the aging process. SIRT1 is being studied as a possible source in treating MELAS or type 2 diabetes. According to published reports, the grant has resulted in Sitris being offered seven years of marketing exclusivity for its formulation of resveratrol.