Investors in the pharma/biotech sector eagerly wait for pipeline updates as they play an important role in deciding whether or not to invest in a particular company. Pipelines are of prime importance as far as pharma/biotech companies are concerned. These companies spend a significant amount in advancing their pipelines.
Last week, Synthetic Biologics, Inc. (SYN) announced that the FDA has granted orphan drug designation to its monoclonal antibody (mAb) combination, SYN-005. The candidate is being developed for the treatment of Pertussis (whooping cough).
We note that the FDA grants orphan drug designation to candidates being developed to treat rare diseases/ conditions that affect less than 200,000 people in the U.S. The status makes the candidate eligible for seven years of marketing exclusivity in the U.S. following approval.
The company plans to start a current Good Manufacturing Practice (cGMP) for the candidate by the end of the year. Synthetic Biologics now intends to file an Investigational New Drug (IND) Application for SYN-005 in mid-2015.
Synthetic Biologics has an Exclusive Channel Collaboration with Intrexon Corporation (XON) and academic researchers at The University of Texas for the development of SYN-005. As per World Health Organization, around 50 million whooping cough cases are detected in the world every year, of which 300,000 people (mainly young and unvaccinated infants) die each year.
Though we are encouraged by the orphan drug designation for SYN-005, it left investors largely unimpressed. In fact, Synthetic Biologics shares fell over 12% on Sep 15, 2014. Moreover, the candidate has a long way to go before hitting the market. Any hiccup during the process may pull down the stock.
Synthetic Biologics also has Trimesta (relapsing-remitting multiple sclerosis), SYN-004 (C. difficile infections) and SYN-010 (constipation-predominant irritable bowel syndrome) in its pipeline. Successful developments of these candidates are important for the company.
Synthetic Biologics currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector are Amgen Inc. (AMGN) and Gilead Sciences Inc. (GILD). Both hold a Zacks Rank #1 (Strong Buy).
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