My regrets for not posting to my blog for the past couple of weeks.

Since blogs have a certain personal element to them I can tell you there was a death in my family that set things back a bit. At roughly the same time I completed the final edits of a novel, a biotech and financial thriller (how appropriate you say ?) and that set me back a few days as well.

No matter -- life goes on and e-mails keep coming in about Dendreon.

I continue to tell people the stock is worth about two bucks, while other analysts will go as high as four. But the stock continues to trade on irrationality, sentiment and wishful thinking. The odds are long against the company getting an approval on Provenge, based on the interim clinical trial data that it can submit at the end of next year. And if it does submit this data, and fails to get approval, this submission complicates the issue even further, and makes it more difficult to get an approval after the trial is complete in 2010.

So, please, forget the hype and the hope. There are many other companies to invest in, and the smart money will stay away from Dendreon. Put your money somewhere else -- maybe something totally the opposite of Dendreon, perhaps even something that's "un-science" like nutraceuticals?

On that note I am going to say goodbye for now and wait to see if any of you have any ideas you want to submit about your favorite nutraceutical company or product. I recommend you look at companies in distribution if you don't have a personal favorite, such as United Natural Foods (UNF) or Whole Foods Market (WFMI) right now.

An FDA Advisory panel rejected weight loss drug Acomplia yesterday - a very good thing in my opinion. The drug had marginal benefits, disturbing side effects on some patients in the trial, and while left unsaid, it was a drug with any number of potential problems.

It simply was not worth the risk for the loss of a grand total of fifteen pounds!

Both advocates and neutral parties said it would be one of many tools needed for the nation's healthcare arsenal that's deficient in the tools needed for the current epidemic in obesity. That's a fair point, but would you want to send our troops into battle with hand grenades that could blow up before the pin is pulled?

The rejection of the drug reminds of me of the paucity of products and research, not only in obesity but within Big Pharma pipelines. Acomplia really was not a blockbuster in the wings - and if its creator, Sanofi-Aventis (SNY), were not desperate for a big revenue producer, it would have fine-tuned the drug and/or the trials. But SNY didn't, and instead it rushed the drug, forgetting the FDA is now being doubly careful with drugs and doubly, doubly careful with drugs for non-life threatening maladies.

Let's take that thought one step further when looking at the potential for a drug approval.

The FDA, both its advisory panels and staff, seemingly work within one set of standards for approval of a drug: The drug must be safe and it must be effective, as measured in certain ways too boring to go into here. A life saving treatment is statistically measured the same way as a sleep medication, arthritis pain relief or a diet drug.

The reality is another thing - the terrible staff decision on Dendreon's (DNDN) Provenge notwithstanding - with the FDA clearly aware all drugs are not created equal. Yesterday, the panel was explicitly concerned that many patients would take Acomplia outside of tightly controlled clinical environments found in the trials, and the number of psychiatric side effects would be higher. They are right - yet those who are bulls on the product ignored this problem.

Don't you do the same. When looking at the potential for a drug to get approved, take a look at all the hows, whys and wherefores - and feel free to write me at mshulman@chanegwave.com if you have questions.

Is There A Future for Inhalable Insulin?

The annual conference and trade show of the American Diabetes Association kicks off tomorrow and one question on the minds of many investors is the future of inhalable insulin. Billions of dollars have been put into research and clinical trials, and with only one product, Exubera, from Nektar (NKTR) and Pfizer (PFE) having been approved yet, many on Wall Street are skeptical.

They are wrong.

ChangeWave Alliance surveys of physicians have consistently shown inhalable insulin, if made available and properly marketed, would be a smash success. The failure to date of Exubera is a management and sales issue with Pfizer -- a company relatively new to the diabetes field and on the back of its heels due to competition from generics, large scale layoffs and restructuring.
Simply put, PFE screwed up the first launch and is now re-launching the product with a campaign that includes direct-to-consumer advertising.

The failures of Exubera, to date, have not only hurt the price of Nektar stock but also the price of two other companies developing inhalable insulin products: Aradigm (ARDM) and MannKind (MNKD). That failure is also weighing on the stock of Alkermes (ALKS).

Aradigm is partnered with Novo Nordisk, the marketshare leader in conventional insulin; MannKind is going it alone; Allkermes is partnered with diabetes heavyweight Eli Lilly (LLY).

I follow all these companies and the only one I do not like is MannKind due to its lack of a partner. It's not just that a partner shares cost - the problem is that cracking the diabetes market is very difficult, just ask the folks at Pfizer.

Could I be too optimistic? No.

ChangeWave Alliance surveys predicted that Amlyin's Byetta would be a runaway success (and it is) at a time when Wall Street geniuses, talking to highly specialized endocrinologists who were resistant to change, said it would fail. The same scenario will play out with inhalable insulin, for if Pfizer does not figure it out, surely companies with experience in this market such as Novo Nordisk and Eli Lilly will.

Yesterday I wrote about something that's an immediate and pressing issue for many investors: the future of inhalable insulin.

It occurred to me when reviewing ChangeWave survey results showing the huge potential for this kind of product that I might have been missing the larger issue: the future of diabetes treatments.

All of those treatments are all being driven by the same attitude that will make inhalable insulin a success: patient convenience and choice.

Patient convenience drives patient choice, and it's not well understood on Wall Street. Street analysts often rely on anecdotal feedback from endocrinologists specializing in diabetes, and on the insight provided by consultants such as David Kliff who publishes Diabetic Investor.

Many of the analysts are former scientists who are into sciences, the precision of treatment regimens and, in the case of the practicing physicians, the treatment protocols they have developed, understand and use with comfort and success. All of this causes a natural bias against new products and a real disdain for patient convenience.

Yet, patient convenience is very, very important, not just in determining what products may win out in the marketplace, but in driving the most important ingredient in diabetes treatment: patience compliance with prescribed treatment regimens. For instance, diabetics should test their blood sugar at least four times a day, yet the average patient in the U.S. tests less than four times a week.

A great example of how this troika of experts on Wall Street can miss things is the blockbuster drug Byetta from Amylin (AMLN). ChangeWave Alliance surveys showed the drug would be a runaway hit; the experts said no. We were right; they were wrong. The stock has nearly tripled since I first recommended it.

What the doctors in the ChangeWave Alliance understood was the convenience of predictable, twice-daily, pen-based injections, rather than fumbling with pills numerous times during the day. They also understood the weight loss potential for their patients would make it a hit, because they knew most diabetics gain weight on meds.

Keep patient convenience and patient compliance in mind when looking at diabetes companies to consider for your portfolio.

One company to look at right now is PolyMedica (PLMD). It's the Wilfred Brimley, Liberty Medical, late night cable outfit that ships diabetes testing supplies and treatments to your home and does all the paperwork. Now that's patient convenience!

"Biogenerics" is the next wave in biotechnology and it's a loaded term with a reality that is quite different. The term has been in the headlines (at least the headlines I read) the past few days and I am still saying hurrumph about it. That being said, or grunted, let's go over a a couple of things.

What: "Biogenerics" is actually an efficient term - and that's funny, given this is life sciences word - and means what it says: a generic version of a biological drug, something made from a biological process, not the mixture of compounds into a pill or liquid.

Where: "Biogenerics" sort of exists in Europe in the form of generic human growth hormones, and do not exist here (sort of) due a lack of regulatory authority from the FDA.

No kidding. The U.S. government forgot to regulate something - go figure. Well, the didn't so much forget as they were lobbied hard into ignoring biogenerics. As a post script, I live in Washington D.C. and trust me, nothing is forgotten if campaign funds can be raised.

When: The first European approval for a biogeneric was in the past year and in the U.S. there is legislation on Capitol Hill to enable the FDA to authorize biogenerics.

Why: Why has it been so hard to authorize the biogenerics? This is important - generic copies of a pill or liquid made from chemical compounds do not require clinical trials because the formulas are known and all the FDA requires is bioequivalence: that the generic works the way the proprietary drug works. Not so with biogenerics.

Biogenerics typically use different manufacturing processes and biotech outfits claim this makes the final product different than the original, and, further, that these generics should be run through clinical trials. I am not into unnecessarily high prices and extra requirements, but the biotechs have a point. If an end product, such as Amgen's Epogen and Aranesp, is intimately tied to the manufacturing process, how exactly do you insure the generic has the same efficacy with a patient?

Who: Are there winners and losers? If biogenerics become a reality there will be. And as rumors and legislation swirl around, the stocks of these winners and losers will move long before a biogenerics hit the market.

And the winner is: the world's largest generics company, Teva (TEVA) of Israel. It's a great company with lots of quiet development work underway in biogenerics. The loser is AMGEN (AMGN), already being hit by the Feds because of excessive use and potentially excessive reimbursement for their anemia drugs. Frankly, generic competition would hit AMGEN very hard. These drugs are a natural target for generics companies as they constitute a huge, multibillion market.

Stay tuned - I am going to have a lot of fun as the lobbyists, legislators, lawyers and other louts join the fray.

Sometimes, as an investor, you cannot win for winning.

Translation: sometimes I really hate Wall Street. If there ain't enough new molecules, Wall Street often overlooks the obvious -- sort of like ignoring a beautiful woman (or man) because they aren't wearing the right clothes.

The American Diabetes Association (ADA) just wrapped up its annual confab and to me -- as an investor looking at fundamentals -- the real news out of the conference came from Amylin Pharmaceuticals (AMLN).

The company has two diabetes drugs on the market - Symlin and Byetta - with the latter a blockbuster and the only Type 2 diabetes that induces weight loss and truly improves the ability of patients to manage their glucose levels. But that's not the real news. The real news was trail data showing Byetta, plus two oral medications, controlled glucose as well as insulin and those two medications.

That is serious news!

The FDA will require a much bigger trial, but docs already familiar with Byetta will jump on the news and, once a larger trial is completed, you can assume AMLN will go for a new FDA label (approval to market) for Byetta. That label will say that doctors can prescribe it with these two trial meds before moving a patient to insulin.

If you didn't know, the Holy Grail in diabetes treatments is to keep patients away from insulin for as along as possible.

The stock actually traded down on the news. What were those guys on the Street looking for, that Byetta was better than insulin?

Well, actually it is, as insulin induces weight gain and Byetta induces weight loss. More importantly insulin creates a wide variation in glucose levels and often induces hypoglycemia, which requires treatments from orange juice to more meds to fix.

A lot of other noise occurred at the ADA confab, including heated discussion about GlaxoSmithKline's (GSK) drug Avandia, much of it negative as physicians felt betrayed that they had recommended and prescribed a drug that looks like it created a lot more problems than it was worth.

"Noise" does move stocks - but I like fundamentals and the news about Byetta was fundamentally terrific.

Everywhere you look you read something new about life sciences, well, almost everywhere -- blogs do suffer from hyperbole. Uh, where was I ...

You see, I am suffering from a genomic predisposition to dissimulate, be distracted, wander. They call it adult ADHD.

And the proof that genomics is now part of our everyday thinking is that you accept this answer -- it is my genes, not a personality flaw, a bad education or words coming from the mouth of someone in a drunken stupor.

Mendel, the monk, would be happy -- and if you don't know who he is, you have a lot more reading to do. Start with the Selfish Gene by Richard Dawkins, the best book on the intersection of genetics and human evolution ever written.

Where was I?

Yes, genomics: ChangeWave Alliance surveys of physicians and researchers have, for several years, put genomics at the forefront of new technologies and products to help fight disease. The problem for investors is the end products are so far off it is hard to figure out where to invest.

How about the companies making money off of genomic research equipment and services? They are the current winners, and their value was put on display this week with Roche's acquisition of NimbleGen Systems for $280 million -- about $2 million per employee or a P/S (price to sales) ratio of 20 based on 2006 sales and 10 based on this year's forecasted (my forecast) sales. Earlier in the year Roche bought 454 Life Sciences from Curagen.

But you still have a lot to choose from:

• Illumina (ILMN), with a trailing P/S of 9.3
  
• Affymetrix (AFFX), with a trailing P/S of 4.8
  
• Luminex (LMNX) with a trailing P/S of 7.7
  
• Applied Biosystems (ABI) with a trailing P/S of 2.75
  
• Beckman-Coulter (BEC) with trailing P/S of 1.56
  
• Sequenom (SQNM) with a trailing P/S of 5.68.
  

See you soon.

Do you believe in miracles -- at least medical miracles?

I do.

This week's news was dominated by some major events: the Supreme Court reversing Brown versus the Board of Education; reversing itself and saying it will review the right of prisoners at Guantanomo to appeal their confinement in federal courts; and the aborted London and Scottish terror bombings. And, of course the iPhone.

Let's start with the iPhone, which in turn starts with arguably the greatest marketer and one of the great businessmen of the last 50 years, Steve Jobs.

In case you're not aware, Jobs is, in addition to his miraculous business acumen, a medical miracle. In 2004 he was diagnosed with a very rare form of pancreatic cancer, operated on, and is now healthy. His form of the cancer -- islet cell neuroendocrine tumor -- hits only about 1% of the people who get pancreatic cancer and has become a curable form of the illness. A generation ago, Jobs would be dead. Seeming miraculous advances in diagnostic testing and micro surgery can be credited with kepping him alive.

No Jobs, and Apple itself may well have died in the late '90s.

Another miracle is a company called NitroMed Inc. (NTMD). It was developing a heat medication that did not prove more efficacious in trial than other available medications, but after a long look at the data it showed people of African American descent did much better in trial. Another trial, another set of data and the results were even more astounding: 43% fewer heart attacks or incidents.

But miracles, at least real miracles, only occur in storybooks. NitroMed totally screwed up the product marketing, insurance companies still don't believe the trial results and the black political leadership in this country obviously is more concerned with Al Sharpton's rant du jour than saving lives. And Its lead nitric oxide-enhancing medicine, BiDil -- being developed to reduce mortality and hospitalization and to improve the quality of life of African Americans diagnosed with heart failure -- continues to flounder in the marketplaces because it is too expensive and no one is fighting all that hard to make it easier to buy. The stock is in the tank, but someday, maybe, the miracle will occur and.....

OK, I'm doing the "steam-of-conscientiousness" thing, but the point is that what my parents called "miracles" -- at least scientific ones -- are often thwarted, buried or just plain lost by a lack of (what my grandmother called) a miracle. Sometimes it takes divine intervention to alter idiot human and/or corporate behavior.

The point for investors is that you have to search for the miracles -- both scientific and human -- when you're looking for the next great potential "super nova" biotech stock.