Northern, WI 6/19/12 (StreetBeat) -- Despite the recent economic turmoil in Europe, the Biotech Industry has been home to some of the strongest performers in the market in 2012. The SPDR S&P Biotech ETF (XBI) and the First Trust NYSE Arca Biotech Index ETF (FBT) year-to-date are up 26 percent and 32 percent, respectively. As the world continues to face evolving health challenges the discoveries of new therapeutics and vaccines are critical. Five Star Equities examines the outlook for companies in the Biotech Industry and provides equity research on Celldex Therapeutics, Inc. (Nasdaq:CLDX) and Rosetta Genomics Ltd. (Nasdaq:ROSG).
Expiring patents have been a major dilemma for pharmaceutical companies. New products that are being introduced are not expected to generate the same level of revenues of the products that have lost patent protection. The Obama administration is currently analyzing a proposal in which the exclusivity period for biologics would be cut down by 5 years. Mergers & Acquisitions activity is expected to pick up in 2012 as companies to look to make up for loss revenues. M&A allow companies to acquire products that are already proven in the market place without the hassle and costs associated with research and development.
"Many of the pharmaceutical companies started producing everything in-house out of their own R&D organizations and over time they've failed to produce enough that way. So the industry is now coalescing around a 50-50 model of half on your own and half bought in. There are some things we'll do for ourselves but we need to be constantly on the lookout for new technologies," said Angus Russell, Chief Executive of Shire PLC.
Celldex Therapeutics has a pipeline of drug candidates in development for the treatment of cancer and other difficult-to-treat diseases based on its antibody focused Precision Targeted Immunotherapy (PTI) Platform. Shares of the company are up nearly 67 percent year-to-date. As of March 31, 2012, Celldex reported cash, cash equivalents and marketable securities of $92.1 million, which the Company believes will be sufficient to meet estimated working capital requirements and fund planned program development into 2014.
Rosetta Genomics develops and commercializes a full range of microRNA-based molecular diagnostics. The Company's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs.
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