Facebook is a $7.50 Stock

By Diane Alter
www.moneymorning.com

Facebook (Nasdaq: FB) is on the cusp of amassing one billion users, unarguably a milestone.

The last official tally of Facebook users was 955 million. Employees have become giddy in expectation of reaching the one billion mark any day now.

But, they might want to hold off tossing confetti, because the momentous occasion will also shine a bright light on the social network's shortcoming.

No matter how many users Facebook acquires, if it can't sell anything, the landmark number is useless.

As Owen Thomas of Business Insider wrote, "Bottom line: One billion users isn't cool. You know what's cool? Two billion."

Facebook Sales Estimates Slashed

The failure to monetize that many subscribers is a shame because Facebook's massive user base is an advertiser's dream if effective - but there have been no signs of future revenue growth.

That's why market research firm EMarketer Inc. recently slashed its projections for the Menlo Park, CA-based company from $6.1 billion in annual sales to $5.04 billion. Facebook continues to struggle for advertising growth, in particular the fast growing mobile market.

An increasing number of Facebook users are now accessing their accounts via smartphones and other mobile devices, an area where Facebook collects a great deal less in ad revenue than it does on desktop access.

Facebook enjoyed an 88% revenue increase in 2011. EMarketer estimates Facebook revenue will rise only 36% this year and 31% in 2013. Advertising growth, which comprises the bulk of Facebook's sales, was more than 68% in 2011, according to EMarketer. That number will dwindle to 34% in 2012 and 29% in 2013.

In July, in its first earnings report as a public company, Facebook reported sales growth of 32% for the second quarter, down from 45% in the prior quarter and 55% in the fourth quarter of 2011.

The company's earnings report was lackluster, uninspiring, and very short on guidance.

Can Facebook Ads Even Work?

Now an increasing number of marketers have questioned just how effective Facebook advertisements are, according to EMarketer analyst Debra Williamson.

Sales "haven't been growing as fast as we and others had expected. There is still hesitation about the effectiveness of the advertising, about how much the advertising is worth," Williamson told Bloomberg News.

Facebook maintains that it's working with companies to show that ads do have an impression and are impactful, but Williamson cautions it needs to move faster in this arena.

In the days leading up to Facebook's hugely hyped, highly anticipated IPO, behemoth General Motors Co. (NYSE: GM) announced it would stop advertising on the social media site. GM claimed its Facebook ads failed to have a big impact on consumers.

GM was spending some $40 million a year on Facebook marketing, $10 million of which was for paid advertising, according to data from The Wall Street Journal. The company's defection did more than strip money from Facebook's ad revenue. It promoted a plethora of other companies to review their Facebook ad strategy.

Now Facebook hopes a fresh strategy will appease advertisers. Facebook next week will debut a new tool for marketers, company spokesperson Elisabeth Diana confirmed to Bloomberg. Advertisers will be able to use information they have gathered from their own customer base, including e-mail addresses and phone numbers, to target those same customers on Facebook, using a software program that protects identities.

Facebook Stock Dips Under $20

Facebook's shares have lost more than half their value from the May 18 IPO.

The company, currently worth about $50 billion, has seen more than $40 billion slashed off its value since its entrance as a public company. Facebook is now the worst performer on record among all large IPOs, Bloomberg reported.

"Investors who bought into the IPO have lost billions of dollars," Victor Anthony of Topeka Capital Markets explained to Bloomberg. He added that CEO Mark Zuckerberg and his team need to detail how the company plans to drive revenue growth if they want investors to hang around.

Zuckerberg's indifference to Wall Street's opinions and the day-to-day movement of Facebook shares are also troublesome for many investors. They may not hang on to shares for much longer if they don't see much to like. They want to see revenue growth, sales, a concerned CEO and continued membership development.

Facebook stock traded around $18.27 in Friday morning trading, down nearly 16% for the month of August.

Source: Congrats on One Billion Facebook Users… Who Buy Nothing:

Related News

• Forbes: General Motors (NYSE:GM) Says Facebook Ads Don't Work

Breakthrough Tech Lets Users Surf the Web With Just Their Eyes

By Michael A Robinson
www.moneymorning.com

Forget about using a keyboard to type in your question on Google or Bing. Ditto for voice control on your smart phone. Soon you'll be able to control your computer or mobile device just by moving your eyes.

A British research team did just that with a new system that costs less than $100 - all with parts they could simply pull off a shelf. In a moment, I'll give you all the details. But first, let's put this breakthrough in context. You see, for most of us surfing the Web, writing emails or sending texts is so routine we don't even give it a second thought. In fact, it sometimes seems that mobile phones, in particular, have become part of our bodies. (Just try telling my teenagers to stop texting at the dinner table.)


And yet, millions around the world simply cannot join the digital age for a simple reason. Their bodies won't let them, either because of disease or severe injuries.

That covers a wide range of problems from adults with lost limbs or broken spinal cords to kids who have muscular dystrophy, an illness that causes the muscles to wither away. But all that is about to change...

The Promise of Eye-Control Tech

Fact is, cutting-edge eye-control tech promises to have a profound impact on the way humans use a wide range of machines. We're taking about everything from controlling robots and wheelchairs to setting the timer on your coffee maker. It's thanks to the research team at Imperial College London that this tech is finally within reach.

Today's standard eye-tracking systems (like those used by the U.S. military) cost "tens of thousands of times" more money than the system they built, the research team noted. With this milestone behind us, I predict this new system - or something like it - will bring eye-control tech to the masses. Team leader Aldo Faisal agrees. He says just about anyone can learn to control devices with their eyes. In his project, people became adept at using the system in just a few minutes.

Faisal's team got their results, published July 12 in the Journal of Neural Engineering, by having test subjects play Pong, that early table-tennis video game that debuted way back in 1972. They not only played the game without a head set, test subjects also learned to surf the Web and write emails using only their eyes.

Dubbed the GT3D, the system includes two fast video-game console cameras attached to a pair of cheap glasses and "smart" software that processes the input quickly. The cameras took constant pictures of the eyes and tracked just where the pupils were pointing. That allowed the research team to figure out the precise spot where a person was looking. Turns out the system works in 3D. The research team devised ways to figure out how far in the distance the test subjects looked. This last detail could prove crucial; the spatial control would allow people to work an electric wheelchair just by looking where they want to go.

Really, the possibilities are endless...

Just by using a simple eye movement, like a wink, paralyzed patients - or any one for that matter - could turn the pages of a book in their e-reader or "tell" a robot to clear the dishes off the dinner table. No doubt, this milestone clearly fits into the Era of Radical Change. Not long ago, eye-control was the stuff of sci-fi or advanced U.S. defense platforms.

But in the near future it will become a reality for millions around the globe. It's also one of the reasons I say the world of high tech moves faster these days than what most folks can get their minds around. Consider this related piece of news that came out on the very same day... A team in the Netherlands said a new system will allow paralyzed people to control computers with just their minds.

This brain-computer link from UMC Utrecht relies on an advanced MRI scanner. Test subjects looked at a computer screen that allowed them to see just what a camera on a toy robot was looking at. In turn, the MRI scanner measured the brain activity of the test subject. Then, the computer "learned" when the four test subjects were thinking left, right, or forwards.

Each of the volunteers got the robot to complete a course of about 30 feet with four stops along the way. All the while, the "drivers" were lying inside the MRI machine - just thinking about what they wanted the robot to do. "All four study subjects were able to control the robot very quickly," said brain researcher Nick Ramsey, who led the team. "They all felt in control of the robot. This means that this type of brain-computer interface is very easy to master. Training is barely needed." Ramsey said this is a crucial step in proving the long-term potential for this type of approach. Later, patients will have electrodes implanted in their brains to track their thoughts and control robots.

It's hard to predict how long it will take either of these systems to come to market. If I had to guess, I'd say the eye-tracker will come out sooner because it's cheaper and easier to use - at least for now. But either system would be a godsend to millions of paralyzed people around the world. It will give them a brand new lease on life, a way to take control of their surroundings that today they can only dream about.

About the Author
Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world.

Source: Breakthrough Tech Lets Users Surf the Web With Just Their Eyes:

Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again

By Michael A Robinson
www.moneymorning.com

Not long ago, the future of Microsoft Corp. (NASDAQ: MSFT) was slipping through its grasp.

Then it introduced Kinect. Today, the tech giant is using Kinect to win big on a breakthrough that will literally touch millions of lives. It is one of the reasons why Microsoft's stock has gained more than 20% this year.

What is Kinect? You may recognize it as the best-selling add-on to the Xbox 360 video game. But it's much more than that. It represents a revolution in how we will communicate with our computers, our TVs, and our smartphones. For Microsoft, Kinect is literally a game changer. They lead the world in the technology behind it, and it promises to be big. But not just for Microsoft...not by a long shot.

The Promise Behind Microsoft Kinect

The magic behind Kinect is that it responds to body gestures. And while Kinect did debut to rave reviews, Microsoft executives really didn't understand how Kinect could change the world -- and rack up new sales.

But since its introduction in 2010, hackers have found dozens of very cool uses for Kinect-- none of which did much for Microsoft's bottom line. This got the software giant to thinking that maybe they were sitting on a potential gold mine. That's why Microsoft is now tapping the genius of young entrepreneurs (You know, the type of guys who live and breathe cutting-edge high tech) to better monetize the technology behind Kinect.

In fact, Microsoft recently picked 11 startups to work at its Kinect development offices in suburban Seattle. It's a savvy move. After all, these guys get out of bed every day looking to create the Next Big Thing.

Already, the program shows great promise. Here are some of the slick high-tech ideas these young turks are already tackling:

• Styku only hopes to reinvent how people shop online. The startup's idea is to provide you with a personal avatar that lets you "try on" clothes virtually before you buy them.

• Jintronix uses Kinect and 3D gaming to improve rehabilitative therapies for patients suffering from a motor disability. Virtual reality could be a godsend for stroke victims who want to rehabilitate from their homes.

• GestSure Technologies targets surgeons and hospitals. It wants to bring touchless interfaces into the operating room. Doctors could access computer data during surgery without compromising cleanliness.

• Ikkos uses algorithms to teach movements. Parents will love this one. It's designed to help people develop the body mechanics of an Olympian.

It's too soon to tell if any of these startups will ever go public and give savvy investors the kind of big gains that have been pushing the Nasdaq to new heights lately. But don't worry. Kinect is bound to provide its share of breakouts.

First of all, Microsoft recently released a version of Kinect for Windows and is now pushing a version with developer software.

In fact, I predict we will see hundreds of applications using Kinect by the end of this decade. And many of them will be practical for everyday use.

"Kinected" Carts Follow Shoppers

Take the case of Whole Foods Market Inc. (NASDAQ: WFM). The upscale food store is working on a smart shopping cart equipped with Kinect. How cool is this? The Kinect cart can automatically follow a shopper through the store. Not only that, it can import a shopping list. But it gets better -- the system can direct a customer to items on store shelves. It can even scan goods as they are placed in the cart.

My gut tells me they will come up with an app that accepts wireless payments as you roll past a digital register. And that's just the start. Turns out Microsoft is working with roughly 300 companies to develop more Kinect uses with Windows.

The list includes big-cap leaders like American Express (NYSE: AXP), Boeing (NYSE: BA) , Mattel (Nasdaq: MAT) , Toyota (Nasdaq: TM) and UnitedHealth Group (NYSE:UNH), to develop Kinect for Windows applications. In the near term, Kinect likely will have its biggest impact on businesses that can make good use of large screens.

But it won't be long before Kinect becomes a mainstay of PCs, smartphones and tablet computers. Let me close by saying it's impossible to predict just how much Microsoft can earn from stand-alone sales of Kinect.

That's going to depend on how many applications emerge and how popular they become with the public.

But this much is clear.

Less than a decade ago, operating a computer with the wave of your hand was the stuff of science fiction - remember the movie Minority Report? Now it's becoming reality. That's what makes Kinect part of the Era of Radical Change, and it won't be long before we find a way for investors to profit from it.

Source: Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again:

Cisco Systems (Nasdaq: CSCO) is Looking More and More Like a Dividend Stock

By Diane Alter
www.moneymorning.com

Since the height of the dot.com boom, the transformation of Cisco Systems (Nasdaq: CSCO) has been extraordinary.

These days, the Silicon Valley Internet giant looks more and more like a dividend stock rather than an explosive growth company.

In fact, last Wednesday, the San Jose-based behemoth increased its dividend rate by a whopping 75% (from 8 cents per share to 14 cents) starting with the present quarter. That gives shares of Cisco a new dividend yield of roughly 3% which among the highest of major tech stocks.

For investors seeking a reasonably safe return and a less volatile investment, a great deal of value can be found in Cisco these days since the company now plans to return half of its cash flow to investors by way of dividends and stock buybacks.

And while the company may not post eye-popping revenue growth year-after-year, Cisco does appear poised to post healthy results and robust cash flow for years ahead.

That means Cisco's dividend will be both safe and stable.

Cisco Systems: Past, Present, Future

A once high-flying internet company, Cisco went public in February of 1990. The company rode the entire internet wave to the top, and is widely credited with changing the telecom landscape.

In fact, by late March 2000, at the apex of the dot.com boom, Cisco was crowned the most valuable company in the world, sporting a market cap in excess of $600 billion.

Since then its market cap has dwindled to $102 billion. Even still, in June 2009, it was added to the Dow Jones Industrial Average, and also maintains a place in several other influential indexes.

Of course, the future will tell if Cisco's bigger dividend and buyback program are part of a bigger and better Cisco, or simply a small consolation.

In the meantime, the fresh dividend hike is likely to keep shareholders happy, while the share buybacks (which reduce the amount of outstanding shares) will make its outstanding shares more valuable.

The news comes as Cisco reported impressive fourth quarter earnings that beat on all accounts. Cisco posted massive growth global rates in all regions except troubled Europe. Revenue increased 4% and profits jumped 56% compared to the same quarter a year earlier.

Following the earnings report, Cisco CEO, John Chambers noted that an uptick in orders at the end of the just ended quarter is a positive sign for the future. Acknowledging Europe remains a lackluster region, Chambers commented that the U.S. market is showing clear signs of improvement.

"We wouldn't have done the dividend commitment and the cash commitment if we didn't see stabilization in our business and had good confidence going forward," Chamber said on the earnings conference call.

Analysts and investors were quick to take note. Goldman Sachs (NYSE: GS) recently added Cisco to its coveted "conviction buy list," and Piper Jaffrey upgraded Cisco shares.

For income investors, Cisco is suddenly a stock worth considering.


Source: Cisco Systems (Nasdaq: CSCO) is Looking More and More Like a Dividend Stock:

Disruptive Biotechnologies Stir Up Profits: Ray Blanco

By George S. Mack of The Life Sciences Report
Source: Disruptive Biotechnologies Stir Up Profits: Ray Blanco:


The Life Sciences Report: You have written about your faith in veteran and proven management. Would you talk about that briefly?
Ray Blanco: One of the first things I look for in management is a good stable of scientists—the more, the better. I review credentials, previous academic work and published research. If management has a good scientific background, I take that as a big positive. In addition, I look for a group of people that knows how to design and manage clinical trials and how to work with the U.S. Food and Drug Administration (FDA), which is always tough. It's also good to have somebody in management who has a track record as a dealmaker, especially with early-stage companies. A good dealmaker can form partnerships with big pharmas, which is a way to get funds that don't dilute shareholders.
TLSR: My next question is actually about dilution. Investors in small-cap, pre-commercial-stage companies are always facing dilution, and we've come to expect it. Is that the price of doing business? How do you address this issue as an investor?
RB: Dilution is certainly a huge risk. The earlier you invest in a development-stage company, the greater the risk. With later-phase companies, which I deal with most often, an investor can look at the balance sheet and think about the burn rate going forward. In many cases companies have already been diluted—that is how they raised capital. But they should have enough cash on their balance sheets to finish up pivotal trials and, hopefully, get through the FDA before running out of cash. That's one way to do it.

"One of the first things I look for in management is a good stable of scientists—the more, the better."

Another way is to look at partnerships. Biotech companies will receive milestone payments from larger partners, which also will defray part of the developmental cost for drug candidates. That helps bring down the burn rate and reduces the amount of dilution that a company's stock will experience over time.
TLSR: You are fond of breakthrough and disruptive ideas in technology. How do you know when you've landed on one of these types of platforms?
RB: The important thing about a disruptive or breakthrough technology is that it can either do something that's never been done before—or do something that has been done before but do it better or cheaper. If it can cure a disease that has been incurable, or improve the survival rates for patients using a new drug, that qualifies as a disruptive biotechnology.
Just having a cool science project isn't enough. For instance, I'll mention Dendreon Corp. The company possesses a real breakthrough in terms of biotechnology in its prostate cancer autologous cell platform. You could think of it as a scientific triumph, but in the real world it doesn't move the needle much in terms of patient survival times, and it is incredibly expensive. Two-thirds of the cost of the therapy is eaten up just in the cost of goods sold. That's an example of a scientific breakthrough that I wouldn't consider a disruptive technology.
TLSR: Ray, what are your preferred biotechnology platforms today?
RB: I like technology platforms that are maturing and getting close to generating revenues, or have begun generating revenues in the past year or two, including RNA interference, antisense (genetic "on–off" switch), antibody-drug conjugate (ADC) and stem cell. I like companies with unique discovery, design and validation platforms because they can use those platforms to build a fat pipeline of many different drug candidates, not only in the present but also into the future.
TLSR: Could we talk about some ideas that you are recommending to investors? If you could, please briefly address the platform if it applies.
RB: I'll start with Seattle Genetics (SGEN:NASDAQ) and ImmunoGen Inc. (IMGN:NASDAQ). Both have their own versions of an antibody-drug conjugate technology platform. Antibodies have burst onto the pharmaceutical scene over the last 15 years or so because new breakthroughs in recombinant DNA and biologic manufacturing have allowed pharmaceutical firms to build engineered antibodies. Naturally occurring antibodies have the ability to target an antigen with great precision. The important thing about the ADC platform is that developers can take an antibody with a chemo payload and target it to a specific molecular entity on a cancer cell, using it to destroy that cancer cell. Your run-of-the-mill chemotherapies not only hurt cancer cells but also damage healthy cells. This corrects the problem by targeting the disease more precisely.
TLSR: Is this a double-barreled approach, in which you are getting both signal pathway disruption with the antibody as well as the toxic effect of the conjugated chemotherapeutic agent?
RB: Yes. Genentech (a unit of Roche Holding AG [RHHBY:OTCQX]) has a very successful antibody therapy called Herceptin (trastuzumab) on the market that targets breast cancers expressing the HER2 (human epidermal growth factor receptor 2, also known as "neu") receptor. Genentech has teamed up with ImmunoGen, and the antibody has been improved by linking ImmunoGen's cancer cell-killing toxin to it. Not only do developers get disruption, but they also have the opportunity to deliver a knockout blow to breast cancer cells. The combined product is T-DM1 (trastuzumab emtansine).

"The important thing about a disruptive or breakthrough technology is that it can either do something that's never been done before—or do something that has been done before but do it better or cheaper."

Seattle Genetics has used a similar technology with Adcetris (brentuximab vedotin) to go after Hodgkin's lymphoma (HL), from which I suffered about 20 years ago. It is currently approved for late-stage HL and anaplastic large-cell lymphoma (ALCL) patients who have failed one chemo regimen. In Hodgkin's patients it is approved for those who have failed an autologous stem cell transplant or for those who have failed two previous chemo regimens and are not stem cell candidates. This is the first new therapy for Hodgkin's in many years. The compound goes after the Reed-Sternberg cell, which expresses the CD30 antigen, but it has the opportunity to expand into other CD30-positive cancers. The treatment also may expand into earlier disease stages, and the company also has a pipeline of in-house and partnered ADC compounds that it is using to go after other cancers.
TLSR: Do you feel that Seattle Genetics will be able to develop Adcetris for CD30-positive cancers in much the same way that Genentech/Roche was able to develop Rituxan (rituximab) for several indications in CD20-positive cancers?
RB: Yes. Several cancers are CD30 positive, but Seattle Genetics picked the low-hanging fruit—lymphomas, which were the most obvious targets—first.
TLSR: Is Seattle Genetics funded well enough to develop its other candidates?
RB: Yes. If it's not totally self-funding already, it will be with just a few indications added to Adcetris. I think it will be fully self-funded very soon.
TLSR: You mentioned ImmunoGen, which is partnered with Roche/Genentech in development of its conjugated antibody, T-DM1. This product will probably cannibalize Herceptin, which has been a huge product for Genentech and now Roche/Genentech. ImmunoGen shares were down about 8% on July 12, after it announced a new stock offering. Is this an example of the dilution issue we discussed earlier?
RB: ImmunoGen just announced phase 1 trials for a new compound. If you are going to dilute, I think the company picked a great time to do it. ImmunoGen's share price will rebound, especially as we get close to T-DM1. That's my expectation anyway.
TLSR: What other companies could you mention, Ray?
RB: Vertex Pharmaceuticals Inc. (VRTX:NASDAQ) has Incivek (telaprevir), which is basically the first new hepatitis C (HCV) therapy approved in over a decade. Incivek has demonstrated superior efficacy. But the company is not resting on its laurels. It is also developing nucleoside analogs for use as all-oral regimens so that patients can dump interferon and ribavirin injectables, which have nasty side effects. We have already seen improvement in the HCV regimen with Incivek because it can cut the average treatment time from about a year to about six months. In addition, a superior percentage of patients have had a sustained viral response.
But it's not just about HCV. Vertex is also developing a cystic fibrosis (CF) franchise. It has already received approval for and marketed Kalydeco (ivacaftor) for a very small percentage of the population of CF sufferers. Kalydeco basically targets a particular mutation for the misfolded protein that causes CF, called G551D.
TLSR: On May 6 Vertex delivered interim data on an ongoing phase 2 trial of Kalydeco in combination with another CF pipeline candidate, VX-809, and it showed significant positive improvement in lung function in a specific group of patients.
RB: Right.
TLSR: The stock price was up dramatically that day, and it has held most of these gains. Do you think there is still value in the company?
RB: There's still a lot of value in the company—a lot of upside. If you look at how sales could grow from expanding the franchise, I think Vertex is severely undervalued. Plus there are the other compounds in development for HCV.

"I like biotech companies with unique discovery, design and validation platforms because they can use those platforms to build a fat pipeline of many different drug candidates."

VX-509 is another very exciting Vertex product; it is in phase 2 for rheumatoid arthritis (RA). It is a JAK3 (Janus kinase 3) inhibitor, and unlike the JAK-inhibiting RA compounds on the market right now, it can be taken orally because it is a small molecule. For patients, this would be a big deal. Instead of having to have an injection or infusion, patients can take the pill at home. VX-509 has the potential to be a very successful drug.
TLSR: Is there another company you would like to mention?
RB: We can talk about Aveo Pharmaceuticals Inc. (AVEO:NASDAQ). It has a unique drug-screening technology called the Human Response Platform. Basically, the state of the science today, and for quite a few years now, has involved grafting tumor cell lines in mice for in vivo modeling or in vivo testing.
TLSR: Xenografts (using cells from another species)?
RB: Yes, xenografts. But Aveo has developed a different platform—genetic mouse lines in which a few molecular switches can be flipped and the mice naturally develop the cancer of interest on their own. The tumors are not grafted in; they grow in a more natural way. The advantage is that there's genetic variability to the cancer, just like in the real world. The tumors behave more like real-world tumors. Xenograft models do not display that variability. The platform has been licensed out to large pharmaceutical companies because it is so superior to what everybody else has.
TLSR: The company has a partnership with Astellas Pharma Inc. (ALPMF:OTCPK) for its drug tivozanib, which is for renal cell carcinoma (RCC), correct?
RB: Yes. Tivozanib is Aveo's lead compound. I expect it will submit a new drug application (NDA) to the FDA for marketing approval before the end of the year. Tivozanib in RCC has the highest progression-free survival rates of any comparable drug, but the big deal is its tolerability. Patients often can't take a lot of the RCC drugs out there right now. The side effects, which can be difficult to tolerate, often lead to reduced dosing or discontinuation of the therapy. A drug you don't take is a drug that doesn't help you. Tivozanib targets the mutated vascular endothelial growth factor (VEGF) receptor far more selectively than the wild-type VEGF receptor, which means that side effects are far fewer, yet efficacy is greater.
TLSR: In the TIVO-1 (tivozanib versus sorafenib [Nexavar] in first-line advanced RCC) trial, tivozanib demonstrated superiority to Nexavar, a Bayer Healthcare Pharmaceuticals (BAY:FSE) product. It will also compete with Sutent (sunitinib), a Pfizer Inc. (PFE:NYSE) product, which is the market leader. Tolerability is so important with these patients, as you say.
RB: From a tolerability standpoint, I think tivozanib will be very successful because physicians will appreciate being able to give patients a cancer drug that will actually maintain quality of life while they take it. Patients will also stay on the drug, as opposed to earlier-generation VEGF receptor inhibitors that don't necessarily work in the real world.
TLSR: Is there another company you wanted to mention?
RB: I would like to talk about a couple of additional platform companies. The first is Ariad Pharmaceuticals, Inc. (ARIA:NASDAQ), which has in-house, proprietary drug-screening drug-design platforms. One of the platforms, for example, is called Argent, which helps the company design small molecules that control intracellular processes. Like Aveo's Human Response Platform, Ariad has licensed its technology to other firms.

"The important thing about the antibody-drug conjugate technology platform is that developers can take an antibody with a chemo payload and target it to a specific molecular entity on a cancer cell, using it to destroy that cancer cell."

Ariad also has ponatinib in phase 3 for chronic myeloid leukemia (CML) and acute myeloid leukemia (AML), and it was able to use its discovery platform to develop and design a compound that works on almost all of the most common mutations for CML and AML. These mutations confer resistance to the existing compounds, but ponatinib has demonstrated the ability to actually work on those mutations.
TLSR: Would you like to mention one more company?
RB: Isis Pharmaceuticals Inc. (ISIS:NASDAQ) has an antisense platform that hits the messenger RNA that delivers blueprints for proteins from DNA to the ribosomes. If you interfere with the messenger, you can modify a lot of different kinds of diseases. Isis is waiting for a first-ever approval for a systemic antisense compound, mipomersen (Kynamro) for patients with familial hypercholesterolemia. It works by interfering with the protein manufacture caused by a genetic defect in the patient. The company is working on approval for homozygous patients (who have two copies of the disease-causing gene); it will seek approval for heterozygous patients (who have one defective copy of the gene) later on. These are patients who, even with the arsenal of statins on the market today, can't bring their cholesterol levels down enough to get out of the danger zone. By going after the genetic roots of the disease, it will help these patients (homozygous patients die very young, in their 30s).
TLSR: Isis has a huge pipeline, and many partnerships, yet the company gets no credit for that pipeline. Once mipomersen has been approved in Europe and the U.S., will this prove the platform? Will the company begin to get some credit for its other pipeline products?
RB: I certainly hope so. As you say, the company does not get respect right now, which is probably a good thing if you want to buy. I think the mipomersen approval is going to open a lot of eyes to the potential of the platform, and it will drive investors to bid up the price. It has 24 or 25 additional drugs in the pipeline, either wholly owned or partnered. It is partnered with everybody you can imagine—Teva Pharmaceutical Industries Ltd. (TEVA:NASDAQ), Novartis AG (NVS:NYSE), GlaxoSmithKline Plc (GSK:NYSE), Biogen Idec Inc. (BIIB:NASDAQ).
TLSR: I have really enjoyed meeting you, Ray. Thank you.
RB: Thank you. I enjoyed it too.
While other eighth-graders were out playing soccer, Ray Blanco was in his basement learning how to build what's called a "Wilson Cloud Chamber"—a super-cooled device for detecting particles of ionizing radiation. These days he is an expert in advanced robotics, avionics, genomics and biotechnology. Blanco was raised in Miami, Florida, after his family fled Cuba in the 1960s. He is coeditor of Technology Profits Confidential and contributes to Breakthrough Technology Alert and Penny Sleuth.
Want to read more exclusive Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Exclusive Interviews page.
DISCLOSURE:
1) George S. Mack of The Life Sciences Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: Isis Pharmaceuticals Inc.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report: None. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.
3) Ray Blanco: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

(Companies Mentioned: ARIA:NASDAQ,ALPMF:OTCPK,AVEO:NASDAQ,IMGN:NASDAQ, ISIS:NASDAQ, RHHBY:OTCQX, SGEN:NASDAQ, VRTX:NASDAQ)