Exelixis as a Platform Company

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The pharmaceutical industry is in the midst of a severe innovation crisis, where more R&D money results in less approved drugs. In parallel, sales of most traditional blockbusters are being cannibalized by generic competition, forcing the big pharmas to exploit new concepts and rush new drug candidates to their pipelines. Nearly half of all drugs that are expected to enter the clinic in the coming years will be aimed at the oncology market. Consequently, early stage drug development for cancer is going to be the most active area in the industry, with an abundance of investment opportunities, particularly in small and medium companies. Many investors prefer to stay away from oncology drug development, where success rates are at a worrying low, hovering around 5% compared to 10% for the whole industry. Nevertheless, among the hundreds of publicly traded companies which are engaged in oncology, there may be a group of companies which have better chances of succeeding in such a monumental task. These companies are what I like to call platform companies.

In this article, I will try to explain what makes a good platform company and why Exelixis (EXEL) can be regarded as a good (yet not a perfect) example.  For the sake of clarification, I certainly do not claim that platform companies are the only investment worthy biotech companies, however, when it comes to early stage drug development, platform companies are an excellent place to start.

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Investing in microRNA – Beware of Hype, Follow The Money

The momentum in the microRNA (miRNA) field is continuing to build, as evidence that links this group of important genes to multiple diseases, from Alzheimer to diabetes, is constantly mounting. The adoption of miRNAs is further accelerated by the technological advancements in RNA-based therapies. Because miRNAs are not expressed as proteins but as RNA, the most sensible way to target them is using small RNA technologies from the likes of Isis (ISIS) and Alnylam (ALNY). These technologies have come a long way in recent years, and are now expected to form the basis for a new generation of drugs. Although miRNAs gained wide recognition only recently, the combination of a fresh pool of unexplored genes which are implicated in so many medical conditions together with the maturing technology to manipulate their activity creates a huge untapped market.


So far, 2008 has been particularly fertile, with several exciting events taking place during recent months. Continue reading

Rosetta Genomics – Mining Gold Out of Junk (Part II)


On the previous article , I discussed the importance of microRNAs (miRNAs) and the great attention they have been receiving in the scientific industry. With every day that goes by, miRNAs gain more momentum and their cardinal role in biology is constantly being elucidated. Due to their importance and presence in such a wide range of creatures and medical conditions, from plants to humans, from cancer to women’s health, miRNA are making the migration from a scientific sensation to a huge commercial opportunity. This is great news for a company focused purely on miRNA such as Rosetta Genomics (ROSG), as after years of wandering alone in the desert, it may find itself at the heart of one of the hottest segments in the pharmaceutical industry.


The rationale behind miRNA-based drugs and diagnostics is straight forward. miRNAs are a group of genes which are involved in almost every biological process, as they control over a third of our genome. This central role makes them obvious “druggable” targets, which can be manipulated in order to treat diseases. Their central role might also make them ideal bio-markers for early-detection and diagnosis purposes, due to several advantages that will be described later on. The key in commercializing miRNA-based products is finding the relevant ones which are associated with a specific medical condition. The process starts by looking at the miRNA profile of healthy cells and compare it to that of cells with the particular condition or disease. The miRNAs that may serve as diagnostic markers or drug targets are those which have a different expression profile in the particular condition compared to normal cells.

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