On Tuesday, Jeffrey Kraws, senior pharmaceutical analyst at Crystal Research Associates, spoke with ABC News and Al Jazeera television regarding Johnson & Johnson’s $2.2 billion settlement for unlawfully marketing Risperdal, an anti-psychotic drug. Risperdal is FDA approved to treat schizophrenia but was illegally marketed to doctors and nursing homes as a treatment for elderly patients with dementia. The settlement included criminal fines totaling $485 million and civil fines of over $1.7 billion, which included payments to whistleblowers.  

Mr. Kraws spoke with Al Jazeera from New York City in a live segment airing overseas shortly after 4 PM ET on Tuesday. Among other questions, Kraws explains some of the ethical and brand image ramifications of JNJ’s actions and answers how the drug giant was able to use a system of internal as well as third-party players, kickbacks, and unsubstantiated product claims put forth over the years despite repeated warnings from the FDA.  

Global Equity Investing

Developing sales forecasts has long been a crucial piece of the pharmaceutical development puzzle. Pharma companies use these forecasts to guide decisions at every stage of product development, from what drugs to develop and what technologies to license to how clinical trials should be designed and how sales resources are deployed. Yet last week, a study of more than 1,700 individual analyst forecasts on 260 launched drugs was published in Nature Reviews Drug Discovery, definitively finding that most consensus forecasts are wrong.

Biotechnology--the use of living organisms or other biological systems in the manufacture of drugs or other products--has emerged as a critical sector for healthcare investors over the past several years. In 2012 alone, the biotech sector grew over 40% according to S&P Capital IQ. Biotech is expected to remain a hot market going forward, with considerable room for more growth. Last week, biotech firm Intrexon Corp. (XON-NYSE) made its IPO debut at $16/share and immediately soared 38%. Nearly double its IPO price, Intrexon opened at $29.99 this morning, August 13th. 

An article published last week on FierceBiotech described Russia's current biotech focus and the opportunities this may hold for U.S. companies. Over the past year or so, Russia has been increasingly focused on biotechnology companies as a way to diversify its $1.9 trillion economy. In particular, Russia's OAO Rusnano (formerly the state-owned Russion Corporation of Nanotechnologies, which was transitioned into Rusnano in President Vladimir Putin's second term) has purchased stakes in R&D companies from Europe, Israel, and the U.S. Such investments often require the transfer of technologies to Russia or are accompanied by the establishment of Russian-based laboratories, scientists, and patent rights, as noted in an article from BloombergBusinessweek.

Today, AtheroNova Inc. (AHRO-OTC) announced that it has initiated a Phase I clinical trial with AHRO-001, the Company’s lead compound. This milestone marks AtheroNova’s transition to a clinical-stage company. AHRO-001 is intended to treat and prevent atherosclerosis, a disease in which the buildup of cholesterol, fats, or other fatty substances along the walls of the arteries causes thickening, blockage, and hardening. Atherosclerotic plaque is the main cause of cardiovascular disease. 

Currently, lipid regulators, specifically statins, are the most effective method for reducing serum cholesterol levels. However, at commonly prescribed dosage levels, statins are ineffective at reducing plaque, carry significant drawbacks in their tolerability, and may pose complications resulting from long-term use. Despite these disadvantages, the global market for lipid regulators was $38.7 billion as of 2011 (Source: IMS Health).

Amid a depressed global economic environment, investments in cleantech were estimated to total $1.6 billion in the second quarter 2012, down from $1.9 billion in the first quarter 2012and $2.1 billion in the comparable year-ago period (second quarter 2011). Factors driving down investment include global economic uncertainties as well as political opposition to government subsidies in areas such as solar and wind power and electric vehicle development. A depressed U.S. IPO market is further hampering greentech funding efforts. 

Novel biotech company AtheroNova Inc. (AHRO-OTC) made a significant news announcement last week when it reported the receipt of a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) for its main patent. The Notice of Allowance entailed written communication from the USPTO to AtheroNova that the Company’s primary patent was allowable. A Notice of Allowance specifies the amount of issue and/or publication fees that are due within three months in order to avoid abandonment of the applications (Source: USPTO). Accordingly, AtheroNova expects to announce the official patent issuance within the next few months once the registration process is complete.  

This morning, Crystal Research CEO Jeff Kraws spoke with Reuters' Rhonda Schaffler about winners and losers of today's landmark Supreme Court ruling upholding Obamacare's individual mandate. Mr. Kraws discussed specific stocks to watch as well as sector trends for healthcare insurers, hospitals, pharma and biotech companies, medical records, medical schools, generics, and medical device companies, among others.

A significant opportunity has arisen for Applied DNA Sciences (APDN-OTC) and its anti-counterfeiting and diversion efforts…

This morning, CEL-SCI Corp. (CVM-NYSE Amex) announced the completion of its clinical investigator meeting held last week in Prague. The meeting, which included clinical investigators and research associates, medical monitors, quality assurance personnel, and CEL-SCI’s scientific and management teams, was held to provide protocol and Good Clinical Practice (GCP) training in anticipation of the start of CEL-SCI’s upcoming Phase III trial of Multikine^® in advanced primary head and neck cancer. More than 120 participants from nine countries were present to ask questions about clinical trial conduct.

On November 1, 2010, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a press release discussing new treatments in development for Alzheimer’s disease. Alzheimer’s is a progressive, degenerative brain disease that causes memory loss, personality changes, dementia, and ultimately death. While the greatest risk factor for Alzheimer’s is age—as the majority of patients diagnosed with Alzheimer’s are 65 or older—the disease is not a result of aging. Rather, researchers believe that a combination of genetic, lifestyle, and environmental factors trigger the onset of Alzheimer’s.

Today, a company under our research coverage, WordLogic Corp. (WLGC-OTC) announced that the Texas Technology Access Program of the University of Texas at Austin selected the WordLogic Predictive Keyboard for use in its 16 statewide demonstration centers. The text of the press release is included below.