Alimera Implosion Analysis, What Is Next (ALIM, PSDV)

November 11, 2011 · Filed Under Diabetes, fda · Comment 

Alimera Sciences, Inc. (NASDAQ: ALIM) is the latest of the drug implosions and this one looks even worse than just severely damaging.  The FDA’s complete response letter is really a request for additional data.  This is almost as bad as it could be, short of an outright rejection with an order of termination, for its diabetic macular edema (vision-loss for diabetics) drug candidate called ILUVIEN. 

The reason the stock was down so much (almost 75%) is because we can’t see how the company can adequately fund the next trial and the next trial after that.  One trial, maybe. Two, no way.  The company had less than $39 million in cash on hand as of the end of September and its quarterly loss was $6.5 million in the last quarter even though its R&D expenses were lower. 

This killed co-development partner pSivida Corporation (NASDAQ: PSDV) as well as the intravitreal insert was aimed at providing a therapeutic effect delivering a sustained release of the drug.  pSivida was down 48% at $2.02 on the news as is supposed to get 20% of the profits. Alimera would have owed an additional milestone payment of $25 million to pSivida had ILUVIEN been approved.

We hate to see companies with drug candidates that are so needed fail.  This is one of those cases where a new treatment could really come in use.  Sadly, unless this drug has some very clear cut benefits on other indications, this could be the beginning of the end.

Alimera has only been public for a year and a half.  Welcome to the biotech stock market.   This stock fell 73% to $1.96 on Friday and it still has a $61 million market cap.  A 73% drop is never a good thing unless you are a short seller.  Alimera has a very tough road ahead.

JON C. OGG

Quest For 10-Baggers in BioHealth in 2010 (JAZZ, TRGT, VNDA, DNDN, HGSI, CGEN, BNVI, QCOR, ACHN, PSDV, ATHX, SNSS, AVNR, BIOD, ALXA, CTIC)

If one thing was noticed in biotech stocks, or BioHealth stocks as we often say, it was that investors, traders, and speculators all piled into the chase for the next ten-bagger late in the year.  When you have as many biotech and BioHealth stocks that ran over 1,000% in 2009 that is only to be expected…. hence the 10-bagger comments.  We had many biotech and biohealth shares rally from their lows significantly this year, with companies such as Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ), Targacept, Inc. (NASDAQ: TRGT), Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA), Dendreon Corp. (NASDAQ: DNDN), and Human Genome Sciences, Inc. (NASDAQ: HGSI) all being in or having been in the 10-bagger club this year.

But late in 2009 we started seeing an onslaught of low-priced stocks with small cap or micro-cap values running rapidly higher on news.  In some cases these faded, and in some not.  We saw the traders run up shares of Compugen Ltd. (NASDAQ: CGEN), Bionovo, Inc. (NASDAQ: BNVI), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), pSivida Corp. (NASDAQ: PSDV), Athersys, Inc. (NASDAQ: ATHX), Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS), and AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) on news late in 2009.  Also covered as potentials for this are Biodel Inc. (NASDAQ: BIOD), Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA), and Cell Therapeutics, Inc. (NASDAQ: CTIC).

We have reviewed each of these and given a synopsis for each to see if these could be the 10-baggers for 2010.
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