heres one to watch, page-7

Article by David Blake Shares Magazine

In 1982 Pfizer launched a new drug named Procardia to treat hypertension. Its patent was set to expire in 1992, so in 1989 it launched a sustained release version of the product called Procardia XL, which included a semi-permeable membrane in the tablet to ensure constant absorption by the body. The net result was that newer version added $US9.1 billion in sales for Pfizer between 1989 and 2000.

In 1983 Swiss pharmaceutical group Novartis launched an immunosuppressant named Sanimmune for transplant patients and people with severe arthritis and psoriasis. The drug was due to come out of patent in 1995 and in that year the company released a microemulsion of the same drug - named Neoral - that increased bioavailability by 25 per cent and improved the absorption profile of that drug.
In 1995 Sandimmune achieved sales of $US1.2 billion. Where drugs can lose 80 per cent of sales within three months when patents expire and generics become available - as was the case with Prozac - incredibly the newer product Neoral maintained sales in 2000 of $US1.2 billion. Life cycle management for existing pharmaceuticals is big business these days and it is an area in which local biotech company Eiffel Technologies (EIF) is looking to play a role.
Eiffel Technologies is commercialising "supercritical fluid" technology from the University of NSW to improve the absorption characteristics of new and existing pharmaceutical compounds. There are very few commercial players involved in this area and the technology is being sought after more from pharmaceutical and biotech companies, two attractive features of this stock. Another is that the company has already signed two research programs in the United States - one with Sheffield Pharmaceuticals and the other with Battelle Pulmonary Therapeutics. It is likely that further collaborations will follow.
Eiffel Technologies was previously a contract pharmaceutical manufacturing group trading as Pharmaction Holdings. Eiffel's downside is that it has been attempting to sell off the manufacturing division for more than a year, and although it has entered into a contract of sale with Cottee International, the agreement is conditional on Cottee raising the funds.
Eiffel has just raised $2 million for renovations to its new facility, which was initially to be paid for by proceeds from the sale. The company had little difficulty raising the funds, which is an indication of the growing interest in this stock. Although Eiffel's technology is in strong demand, its past will continue to taint it until the sale of the manufacturing business has been completed. When that happens, the risk profile will be lowered and Eiffel should receive considerably more attention.


Fig Jam

I do not hold EIF