BIOTECH COMPANY IS ONE OF TECH’S FEW BRIGHT SPOTS by Scott Budman
Looking for a recession buster?
Head to the lab.
Last week, I found a lab in Mountain View, California literally humming with activity. In this economy, they have more work than they can handle .. and they’re hiring. In this stock market, they have seen shares rise 500 percent over the last two months. Venture investing? Nobody does that anymore .. but this company just landed a BILLION dollars from a British Pharma giant.
It’s Map Pharmaceuticals (MAPP). The company is working not only on a treatment for migraine headaches (cue everybody in the office raising their eyebrows), but also on a treatment for childhood asthma (cue lots of parents imagining not having to worry about that anymore….). In short, Map has found its way into a biotech sweet spot, and that’s a very good place to be in these tough times.
At the end of last year, Map was floundering a bit, with a stock price falling below $2 a share. Little did we know that the company was about to unleash its double-header. For migraines, it’s a new way to get
fast-acting medicine to patients through an inhaler (now, you have to go to the emergency room to get this particular treatment). For childhood asthma, it’s a huge deal with parner Astra-Zeneca that not only brings Map a ton of cash, but it gives them the distribution arm of a genuine pharma heavy-hitter.
Not surprisingly, all this activity has made Map somewhat of a Belle at the Biotech Ball. Its share price has exploded, closing thursday at $12.33 per share. But before you become the latest investor to pile on, a cautionary tale: I remember covering a company called Nuvelo not long ago. It had a hot new drug called “Alfimeprase.” Say it loud, and it really sounds like an Irish cheer. Investors did cheer the drug, in fact, riding Nuvelo stock from single digits to about $20 a share. Then, when Alfimeprase hit a bump, investors stopped worshipping, sending Nuvelo shares almost back to zero, before the company was sold off.
That’s not to say that Map will see a similar fate — as always in biotech, everything depends upon FDA approval. Until then, it’s probably best to watch Map with wide-eyed optimism .. and a closed wallet.