Competition, Opportunities Both On The Rise Among Drug Delivery Stocks, Analyst Tells Investors At Forum.

BERKELEY, Calif.--(BUSINESS WIRE)--Nov. 23, 1998--The large and growing drug delivery industry is no longer the undiscovered diamond in the rough between the better known biotechnology and big pharmaceutical sectors, a noted analyst told an investors forum Saturday in Berkeley.

Faraz Naqvi, senior biopharma analyst at NationsBanc Montgomery Securities, told attendees a "new school of thinking" in drug delivery is evolving. Industry stalwarts such as Elan (Nyse:ELN) and Alza (Nyse:AZA) are "reinventing themselves" by acquiring smaller companies with diverse technologies and the market is rewarding them with high valuations.

In this new world, smaller drug delivery companies have to beware of even their own collaborators who can and will use superior resources to cannibalize or compete with them, grabbing markets and opportunities.

"Contrary to what Schumacher says, small is not beautiful" in this new world, Naqvi told attendees at the Informed Investors Drug Delivery Stocks Forum. "The bigger you are in the drug delivery space, the better the market likes it, the better response you get from investors and the more excitement you get for the company."

Some smaller companies in the drug delivery sector will successfully compete, however, Naqvi said. A company that acquires a drug compound from a big pharmaceutical company -- perhaps a drug with market potential below the threshold of interest to big companies -- can essentially transition into a pharmaceuticals firm.

Also, smaller companies with superior technical capabilities in new areas can prosper, Naqvi added. In oral delivery, for example, Naqvi said companies such as DepoMed (Amex:DMI) are in good position. DepoMed has shown a tremendous ability to improve absorption of drug compounds that historically have been considered poorly soluble.

Pulmonary delivery of drugs holds a number of promising companies, Naqvi said, He mentioned Dura Pharmaceuticals (Nasdaq:DURA), Inhale Therapeutics (Nasdaq:INHL), Sepracor (Nasdaq:SEPR) SkyePharma plc (Nasdaq:SKYEY) and Aradigm as leading companies in pulmonary delivery technologies.

Injectable sustained release drug delivery requires a high degree of technical competence, Naqvi said. Some of the smaller players leading in this area include Alkermes, Atrix Labs and Guilford Pharmaceuticals (Nasdaq:GLFD). In liposomal delivery technology, The Liposome Company (Nasdaq:LIPO) and Alkermes (Nasdaq:ALKS) are leaders.

Drug delivery will continue to be an exciting field, Naqvi added, because "we are now discovering drugs at a rate unprecedented in history" and that new drug delivery mechanisms are increasing the effectiveness of the drugs.

The companies which presented at the Berkeley Forum were SuperGen, Aradigm, Atrix Laboratories, Anesta Corp., Endorex, DepoMed, Matrix Pharmaceutical, Inhale Therapeutics and Elan plc (Nyse:ELN). Audio tapes (five-cassette set) are available for $45 plus $3.95 shipping/handling. Call 800/992-4683 to order tapes or get more information. An audio-stream of the Forum is available at Vcall (www.vcall.com).

The next Informed Investors Biotechnology Forum is Dec. 12 in Seattle. Cancer, the leading target of biotechnology research, is the primary theme and up to 12 companies will present to individual investors at the Forum. Already committed to presenting are: Chiron, Endorex, NeoRx, LJL Biosystems, Shaman Pharmaceuticals, Corixa, SuperGen and Targeted Genetics. For registration information, go to www.informedinvestors.com or call 800/992-4683.

Since 1993, Informed Investors has featured scores of quality companies and industry experts at its Forums.