Monday February 06, 2012
by John McCamant, editor The Medical Technology Stock Letter
Pharmacyclics (PCYC) has been on our radar screen for more than a year, since we first met the company’s enthusiastic head of research, Joseph Buggy, in October, 2010 at the BIO Investor conference in San Francisco.
Based in Sunnyvale, CA, PCYC is specifically focused on developing small molecule drugs for the treatment of cancer and immune-mediated diseases.
Pharmacyclics is currently developing PCI-32765 for the treatment of diffuse large B-cell lymphoma, mantle cell lymphoma, and multiple myeloma.
Indeed, the company then made headlines at ASCO oncology conference last June with the most exciting data presented at the conference, specifically its BTK inhibitor PCI-32765 for the treatment of B-cell malignancies.
PCYC received sound affirmation of its value with a major corporate collaboration announced ahead of ASH in December, that brought Johnson & Johnson’s Jansenn Biotech.
Signing this type of deal with a huge global player like J&J/Janssen also gives PCYC a strong, well established, and clearly experienced ally for the eventual commercialization, marketing and launch of the drug.
It is worth emphasizing that we believe PCYC is advancing one of the most exciting assets in the hem/oncology space. PCI-32765 clearly has blockbuster potential.
The combination of robust clinical data in difficult-to- treat tumor types, exceptional tolerability, and once-daily oral administration produce a formidable combination of attributes for any cancer drug candidate.
After meeting with senior management last week in San Francisco, it is clear to us that the PCYC CEO and team understand the difference between a quick sell and creating long-term, exponential shareholder value.
In the current hot biotech M&A environment, PCYC could have easily been acquired at a premium.
However, CEO Robert Duggan knows that the value of PCI-32765 for PCYC shareholders, confirmed and supported by the Janssen collaboration, over time will dwarf that of any quick takeout.
Mr. Duggan, by the way, is more likely than most to have shareholder value at the top of his list, since the CEO owns almost 25% of the company.
We are recommending purchase of PCYC up to $18 with a 24 month target of $30.
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