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Here's something I read today about Crucell. I like that they already have relationships with major pharmas and that they are pioneering "cell factories" to replace chicken eggs in growing vaccines.
From www.spearreport.com:
Crucell (CRXL), Market Cap $1 billion
Even with the barrage of headlines about avian flu, Crucell may not be on your anti-viral radar. Nevertheless, the company is changing the way large pharmaceutical companies produce viral vaccines and is uniquely positioned to benefit from preparations for a pandemic, whether it actually arrives or not.
Influenza vaccines have traditionally been made with fertilized chicken eggs, a process that creates manufacturing inefficiencies, quality control problems and does not support vaccine production against all flu strains. Crucell, which has been in the genetic engineering business for over 25 years, has developed a proprietary vaccine production process based on "cell factories" rather than chicken eggs. Crucell took a human retinal cell and immortalized it using recombinant DNA technology, allowing it to replicate indefinitely. These cells then became microscopic factories, producing monoclonal antibodies, therapeutic proteins (such as vaccines), antibodies and gene therapy vectors in commercial quantities quickly and inexpensively.
Called the PER.C6 process, it is currently licensed to numerous drug and biopharmaceutical firms. The licensing program provides an ongoing revenue stream in the form of upfront payments and annual fees. A large number of pharmaceutical and biotechnology companies worldwide have selected Crucell's technology including Merck, Biogen, GlaxoSmithKline, Johnson & Johnson, Roche, Mitsubishi Pharma, Chiron and many other foreign pharmaceutical companies. In addition, Crucell has established alliances with contract manufacturing organizations to boost revenues and further establish its process as the industry standard for biopharmaceutical production. The most important alliance, however, is with Sanofi Pasteur (SNY).
Crucell has entered into a strategic agreement with Sanofi Pasteur to develop and commercialize both pandemic and seasonal influenza vaccines. As a result, Crucell's production technology became part of the U.S. government's influenza pandemic vaccine program. SNY is currently working on an H5N1 influenza virus vaccine under a $100m contract from the US Department of Health and Human Services (HHS). The company is also working with the HHS, and Crucell, on a feasibility plan for the construction of a US-based vaccine production plant with a capacity for 300 million influenza vaccine doses annually. President Bush's pandemic flu plan has $2.8 billion earmarked for accelerating cell culture technology.
In Europe, Crucell and Sanofi are the designated manufacturers for the FLUPAN pandemic flu vaccine project, with a clinical trial starting in Q2 2006. Sanofi and Crucell's seasonal vaccine is scheduled to enter clinical trials in the second half of 2006 in the US.
Of course, it takes a long time and lots of cash to take a vaccine candidate through FDA Phase III trials, but vaccines that have national security applications are not required to go through the same ordeal. Instead, after animal tests and one human safety trial, these vaccines are likely to be sold to the government and stockpiled. Consequently, in the event of a pandemic, you may be required to sign an insurance release if and when you avail yourself of such a medication.
We believe Crucell's technology and strategic partnerships position the company for decades of growth. Here are some highlights from the Crucell pipeline. Crucell is on the inside track with the U.S. National Institutes of Health (NIH). The company has obtained an exclusive license to patents owned by the NIH to develop and commercialize vaccines against Ebola and subsequently signed a EUR 21.4 million contract with the NIH for the manufacturing of these vaccines. Crucell and Harvard Medical School were awarded a $19.2 million grant from the NIH to develop new adenovirus vector-based vaccines against HIV/AIDS. Crucell also signed a Cooperative Research and Development Agreement with the Naval Medical Research Center to construct vaccines against anthrax and plague. Meanwhile, Crucell is developing vaccines for malaria, West Nile virus, tuberculosis and rabies.
Strong development and licensing activity drove 66% revenue growth for 2005 to $44.5 million; up 85% quarter-over-quarter in Q4 of 2005. Meanwhile, selling, general and administrative (SG&A) expenses decreased 15%. The company lost $18 million in 2005 vs $24 in 2004. December 31, 2005 cash and cash equivalents amounted to $132 million after a private placement in May of 2005 that generated $59 million.
Technically, shares have pulled back about 12% from their all-time high of $30. We recommend CRXL as a long-term buy and hold.
What do you guys think? A long term buy??
From www.spearreport.com:
Crucell (CRXL), Market Cap $1 billion
Even with the barrage of headlines about avian flu, Crucell may not be on your anti-viral radar. Nevertheless, the company is changing the way large pharmaceutical companies produce viral vaccines and is uniquely positioned to benefit from preparations for a pandemic, whether it actually arrives or not.
Influenza vaccines have traditionally been made with fertilized chicken eggs, a process that creates manufacturing inefficiencies, quality control problems and does not support vaccine production against all flu strains. Crucell, which has been in the genetic engineering business for over 25 years, has developed a proprietary vaccine production process based on "cell factories" rather than chicken eggs. Crucell took a human retinal cell and immortalized it using recombinant DNA technology, allowing it to replicate indefinitely. These cells then became microscopic factories, producing monoclonal antibodies, therapeutic proteins (such as vaccines), antibodies and gene therapy vectors in commercial quantities quickly and inexpensively.
Called the PER.C6 process, it is currently licensed to numerous drug and biopharmaceutical firms. The licensing program provides an ongoing revenue stream in the form of upfront payments and annual fees. A large number of pharmaceutical and biotechnology companies worldwide have selected Crucell's technology including Merck, Biogen, GlaxoSmithKline, Johnson & Johnson, Roche, Mitsubishi Pharma, Chiron and many other foreign pharmaceutical companies. In addition, Crucell has established alliances with contract manufacturing organizations to boost revenues and further establish its process as the industry standard for biopharmaceutical production. The most important alliance, however, is with Sanofi Pasteur (SNY).
Crucell has entered into a strategic agreement with Sanofi Pasteur to develop and commercialize both pandemic and seasonal influenza vaccines. As a result, Crucell's production technology became part of the U.S. government's influenza pandemic vaccine program. SNY is currently working on an H5N1 influenza virus vaccine under a $100m contract from the US Department of Health and Human Services (HHS). The company is also working with the HHS, and Crucell, on a feasibility plan for the construction of a US-based vaccine production plant with a capacity for 300 million influenza vaccine doses annually. President Bush's pandemic flu plan has $2.8 billion earmarked for accelerating cell culture technology.
In Europe, Crucell and Sanofi are the designated manufacturers for the FLUPAN pandemic flu vaccine project, with a clinical trial starting in Q2 2006. Sanofi and Crucell's seasonal vaccine is scheduled to enter clinical trials in the second half of 2006 in the US.
Of course, it takes a long time and lots of cash to take a vaccine candidate through FDA Phase III trials, but vaccines that have national security applications are not required to go through the same ordeal. Instead, after animal tests and one human safety trial, these vaccines are likely to be sold to the government and stockpiled. Consequently, in the event of a pandemic, you may be required to sign an insurance release if and when you avail yourself of such a medication.
We believe Crucell's technology and strategic partnerships position the company for decades of growth. Here are some highlights from the Crucell pipeline. Crucell is on the inside track with the U.S. National Institutes of Health (NIH). The company has obtained an exclusive license to patents owned by the NIH to develop and commercialize vaccines against Ebola and subsequently signed a EUR 21.4 million contract with the NIH for the manufacturing of these vaccines. Crucell and Harvard Medical School were awarded a $19.2 million grant from the NIH to develop new adenovirus vector-based vaccines against HIV/AIDS. Crucell also signed a Cooperative Research and Development Agreement with the Naval Medical Research Center to construct vaccines against anthrax and plague. Meanwhile, Crucell is developing vaccines for malaria, West Nile virus, tuberculosis and rabies.
Strong development and licensing activity drove 66% revenue growth for 2005 to $44.5 million; up 85% quarter-over-quarter in Q4 of 2005. Meanwhile, selling, general and administrative (SG&A) expenses decreased 15%. The company lost $18 million in 2005 vs $24 in 2004. December 31, 2005 cash and cash equivalents amounted to $132 million after a private placement in May of 2005 that generated $59 million.
Technically, shares have pulled back about 12% from their all-time high of $30. We recommend CRXL as a long-term buy and hold.
What do you guys think? A long term buy??
What kind of return are we expecting with a "long term buy and hold?" 25% a year for 10 years? You can make 25% on almost any oil stock with an option chain with a lot less risk. Here, the risks are very high--the reward is uncertain. This thing may lay an egg like ELN did and drop right out of the sky. It just isn't my kind of play, esp. when so many other plays offer less risk, a more certain target, and a more stable chart.
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