Bring On the Orphans: Aegis Capital's Raghuram Selvaraju Lays Out a Winning Biotech Strategy


Ram Selvaraju For former drug researcher Raghuram "Ram" Selvaraju, picking biotech stocks is both science and art. It's about understanding the competitive landscape and the mechanisms of drug action, and then making sure all the pieces fit together for a plausible investment case. In this interview with The Life Sciences Report, the managing director and head of healthcare equity research at Aegis Capital lays out his growth hypothesis for companies—several targeting orphan diseases—that he believes will nurture portfolios.

The Life Sciences Report: Ram, it's hard to imagine a situation where orphan drugs wouldn't be reimbursed, because the needs are so great and the optics would be very bad for both payers and drug developers. These drugs range from angiogenesis inhibitor Sutent (sunitinib/Pfizer Inc. (PFE:NYSE]), which is reimbursed at $48,000 a year ($48K/year) to the monoclonal antibody Soliris (eculizumab/ Alexion Pharmaceuticals Inc. [ALXN:NASDAQ]), reimbursed at more than $500K/year. Are we going to reach a tipping point where payers will balk and begin to reimburse at reduced levels, which, in turn, would suppress development of orphan drugs?

Raghuram Selvaraju: I think we're a long way from a tipping point, primarily because orphan drugs are directed toward niche patient populations and have historically commanded high prices. Orphan diseases by definition only afflict small numbers of people, and reimbursement agencies can spread the costs associated with providing drugs to small patient populations across massive subscriber bases. Typically, the subscriber bases number over 100 million (100M) patients for the largest U.S. reimbursement agencies. From my perspective, there is no reason orphan drugs can't continue to be successfully commercialized at current price points.

"Neuralstem Inc. has two very credible shots on goal."

What we will not see is pricing over the highest boundary that currently exists in the market. That benchmark, in my view, has been set by Soliris, which is widely acknowledged to be the most expensive drug in the world today. It treats an orphan indication, paroxysmal nocturnal hemoglobinuria, which is not life-threatening. Yet Soliris is priced at more than $500K per patient annually. That is the upper boundary of orphan drug pricing.

I would anticipate that, as time goes on, companies will find it harder to demand pricing above $75K/patient/year. Right now, in the U.S., orphan diseases are classified as any disease that has 200K or fewer patients. An orphan disease with a relatively high prevalence has more than 50K patients. It is likely that prices for drugs aimed at those higher prevalence diseases is going to come down to the $30–50K/year range.

Drug purveyors have a lot of pricing flexibility, if the drug is a small molecule. Purveyors of orphan drugs can make money even if a small molecule is priced as low as $15–18K/year/patient. If the drug is a biologic, there is some justification for higher pricing because of the higher cost of production. But I think we're a long way from seeing orphan drug pricing reduced to the sub-$10K level.

TLSR: Targeted medicine is about subtyping diseases. For instance, some cancers can be many different diseases, if we look at genotype and/or mutation status. Drug developers could orphanize diseases by segmenting them according to mutation status or genotype. Will there be resistance to that kind of orphanization and associated pricing?

RS: That's an interesting question. I actually think we want diseases to be as orphanized as possible, because the more you segment into discrete patient populations, the more targeted the therapy, which makes favorable outcomes with each individual patient more likely. A given drug will be tailored to a specific genetic makeup and side-effect profile. Orphanization is a good thing because it's going to increase the pharmacoeconomic benefit of newly launched drugs: the more specialized the drugs become, the more developers can justify higher pricing. We consider this a promising trend, and likely to improve the efficiency of healthcare, not act against it.

TLSR: You have observed what you are calling a "massive wave of tax inversions." What's it about?

RS: Simply put, we have a corporate tax regime that renders the U.S. corporations less competitive versus peers in other developed countries. Broad-based U.S. corporate tax reform is needed. The current U.S. statutory corporate tax rate is 35% at the federal level. If a company doesn't employ tax mitigation strategies, it can wind up paying an effective tax rate in excess of 40% on corporate profits. Any corporation that pays that in this age would be regarded as woefully inefficient. Astute tax management strategies are going to be rewarded by shareholders.

TLSR: Give some recent examples of companies that have used this tax-mitigation strategy.

RS: Recent examples include Valeant Pharmaceuticals International Inc. (VRX:NYSE; VRX:TSX), AbbVie Inc. (ABBV:NYSE), Apple Inc. (AAPL:NASDAQ) and Pfizer Inc. (PFE:NYSE). These multinational corporations generate substantial profits outside of the U.S. on patents domiciled in the U.S., and it's difficult for them to repatriate earnings they've accumulated outside of the U.S. without hitting the U.S. tax net. Instead, these companies make use of their ex-U.S. cash piles by acquiring assets domiciled outside the U.S. They are able to reduce their statutory corporate tax rates, and they don't have to resort to expensive tax management strategies within the U.S. That's why you're seeing all of these inversion transactions taking place.

TLSR: Where are these strategies occurring in your own coverage?

RS: Within my own coverage, I've recently seen Auxilium Pharmaceuticals Inc. (AUXL:NASDAQ) acquire QLT Inc. (QLTI:NASDAQ), which is a Canadian company. This transaction will purportedly reduce Auxilium's corporate tax rates to the low 20s, maybe into the mid-teens as time goes on. Pfizer walked away from its widely publicized bid for U.K.-based AstraZeneca Plc (AZN:NYSE) at the end of May. That would have significantly lowered Pfizer's effective tax rate. We're also seeing companies use their low effective tax rates to be more aggressive on the acquisition front. For example, Valeant, which is now embroiled in a nasty takeover tussle with Allergan Inc. (AGN:NYSE), has been an acquisition machine over the past several years.

TLSR: Ram, how should investors view this?

RS: Whenever you have a company actively looking to lower its tax rate, the shareholder sees a tangible benefit because, clearly, that company is making money—the company is profitable. By lowering its effective tax rate, the company increases net income and therefore, earnings per share. Lowering tax rates enables companies to do other shareholder-friendly things, like buy back their own shares, or issue a dividend, or go out and do accretive acquisitions and so forth. From our perspective, shareholders should pay attention to the tax environments their investments operate in. If it's unfavorable, look at what the company is doing about it, because paying a higher tax rate is not shareholder friendly at all.

"Arno Therapeutics Inc.'s onapristone could potentially be a suprabillion-dollar drug upon approval."

We like the fact that multinational companies are making use of their large piles of offshore cash to make strategic acquisitions. We've commented publicly on how the AbbVie acquisition of Shire Plc (SHPGY:NASDAQ; SHP:LSE) makes strategic sense for AbbVie. It significantly diversifies its product base and brings the company into the rare disease space, which is characterized by low sales and marketing expenses coupled with very high revenue and margins on marketed products. The acquisition also provides AbbVie with a much broader pipeline of late-stage drug candidates, many of which are reformulations. It's going to make AbbVie's effective tax rate 13%, versus 22–23%.

In our universe of coverage, we have judiciously looked for companies that pay low effective tax rates, like SciClone Pharmaceuticals Inc. (SCLN:NASDAQ)), which pays a 3% effective tax rate and Valeant, which pays a rate at about the same level. We also look for companies working within a rapidly improving and evolving tax environment. China Biologic Products Inc. (CBPO:NASDAQ), which focuses on plasma-derived products, recently benefitted from a significant reduction in the Chinese so-called "value-added tax," which makes it much more profitable.

TLSR: You have written about the Roche Holding AG (RHHBY:OTCQX) acquisition of Seragon Pharmaceuticals Inc. and its relevance to your coverage. Was it a tax inversion issue?

RS: No. Roche is a Swiss company and benefits from a more favorable tax environment. From our perspective, Roche acquired Seragon because it wanted to continue to be a player in the breast cancer space. Seragon was developing a selective estrogen receptor degrader, which is purported to be active and effective even when the estrogen receptor is aberrantly activated and may be resistant to classical selective estrogen receptor modulators, such as tamoxifen and raloxifene (Evista).

We think the premium Roche paid for Seragon is of significant relevance to two companies that we cover: Medivation Inc. (MDVN:NASDAQ) and Arno Therapeutics Inc. (ARNI:OTC.MKTS). These companies are developing drugs that selectively antagonize the androgen receptor, Medivation with Xtandi (enzalutamide), and Arno with its early-stage candidate onapristone.

Let me give you some background. When these respective steroid-hormone receptors are "on," because they are mutated in some way, they are said to be "constitutively" overactivated. Developing drugs to combat constitutive overactivation has been challenging. Once it was achieved, as in Xtandi, it resulted in dramatically better efficacy, particularly against highly resistant cancers—and very importantly, the ability to delay the onset of resistance in earlier-stage cancer patients.

The fact that Roche paid a high premium for Seragon—$725M up front and an additional $1 billion ($1B) in contingent milestones, for a total purchase price of $1.725B—bodes well for a company like Medivation because Seragon's drug was only in Phase 1, while Medivation's Xtandi is already marketed in prostate cancer and is being studied in several breast cancer indications. [Editor's Note: This paragraph has been corrected to reflect the Xtandi is not marketed for breast cancer.]

It also bodes well for Arno, because it is the only company out there that doesn't have a licensing agreement or partnership. Medivation is partnered with Astellas Pharma Inc. (ALPMF:OTCPK) for Xtandi. Another company targeting overactivated or constitutively activated steroid-hormone receptors was Seragon's sister company, Aragon Pharmaceuticals Inc., which was acquired for $1B by Johnson & Johnson (JNJ:NYSE; J&J). The acquisition of Seragon provides some context as to how we should value Medivation's breast cancer opportunity, and provides encouragement for shareholders of Arno because it is the last man standing with unencumbered assets in the space. Arno's onapristone is still not partnered.

TLSR: You have a $125 price target on Medivation. It was recently trading around $80/share. That would be a nice appreciation for investors. What drives Medivation? I don't see much else in the pipeline.

RS: Xtandi is a pipeline in itself. An approval is expected in mid-September in the chemotherapy-naïve subpopulation of prostate cancer, which should dramatically increase the market opportunity for Xtandi, and which I anticipate could take Medivation shares to over $100/share. Over the next few months, additional data for Medivation's drug in earlier-stage forms of prostate cancer and in breast cancer will be released as well. Within 12–18 months, we anticipate release of very conclusive data regarding the efficacy profile of Xtandi in both hormone-sensitive prostate cancer and breast cancer.

I'll remind you that the androgen receptor is overexpressed in more than 70% of all breast cancers. Medivation could target a very large patient population, and go after things like triple-negative breast cancer, where neither the estrogen receptor nor the progesterone receptor nor HER2/neu are considered to play a substantial role, and where canonically deployed targeted therapies like Herceptin (trastuzumab; Genentech/Roche) or Tykerb (lapatinib; GlaxoSmithKline [GSK:NYSE]) are of minimal or no utility. Our price target factors in some probability of Medivation being able to penetrate these newer markets, but we still anticipate additional upside from confirmatory results coming from proof-of-concept trials, which we expect in the 6–18 month time frame.

TLSR: You mentioned the value proposition for Arno Therapeutics and onapristone, which should enter a Phase 2 trial in postmenopausal women with endometrioid cancers by the end of this year. Arno is also in Phase 1 for several progesterone receptor-positive cancers. I know it's still in very early stage development, but could onapristone approach Xtandi in peak revenues if it's successfully developed?

RS: We can't be sure that onapristone will wind up targeting as large a patient population, but if the target markets are breast, endometrioid and prostate cancers, this could potentially be a suprabillion-dollar drug upon approval. It is a very attractive product opportunity. Considering the market cap of Arno Therapeutics today, reaching a market as big as Xtandi's is less relevant. Arno's current share price, on a fully diluted basis, makes it only a $130M market-cap company.

TLSR: You have spoken in the past about Neuralstem Inc. (CUR:NYSE.MKT), a company working on therapies for central nervous system disorders. It has both stem cell and small molecule programs, and is tackling some difficult indications. Its stock has been weak over the past three months, but Neuralstem has doubled from one year ago, and is approaching a $300M market cap. Given that this is an early-stage, highly experimental company, what has driven the share price appreciation?

RS: There are two factors. First, the company has been in the process of running a Phase 2 proof-of-concept study in amyotrophic lateral sclerosis (ALS), or Lou Gehrig's disease. It's an orphan disease. There is no effective therapy, and after diagnosis, patients typically die within three to six years.

Neuralstem's stem cell-based solution, NSI-566 (human fetal spinal cord-derived stem cells), has been widely anticipated. The Phase 1/2 data, published in the peer-reviewed journal Annals of Neurology, showed anecdotal evidence of efficacy, which was encouraging. If these Phase 2 data, expected from all cohorts in early 2015, show signs of the same kind of efficacy, that would go a long way toward convincing the U.S. Food and Drug Administration (FDA) that NSI-566 should receive breakthrough therapy designation. NSI-566 could then be fast-tracked toward approval. At least one Phase 3 trial would still be needed, but since ALS is an orphan disease and a significant unmet need, a Phase 3 trial would only require enrollment of 60–80 patients.

TLSR: How important is this trial to investors? Will it move shares if the data are good?

RS: If the same signs of efficacy are seen, then Neuralstem's shares could appreciate substantially.

TLSR: What about the small molecule program?

RS: Neuralstem recently presented data for its NSI-189 phosphate small molecule. The metrics for valuations of NSI-189 are encouraging, principally because of a couple of recent transactions made by a small Australian company called Bionomics Ltd. (BNO:ASX), both involving central nervous system (CNS)-oriented small molecules. Bionomics banked $20M up front, and a total of over $500M, for BNC375, which targets Alzheimer's disease. This drug is in very early-stage development and we don't have proof of concept with it, whereas with Neuralstem's NSI-189, we have proof-of-concept data from a Phase 1b/2a clinical study in major depressive disorder.

"Orphanization is a good thing because it's going to increase the pharmacoeconomic benefit of newly launched drugs: the more specialized the drugs become, the more developers can justify higher pricing."

Neuralstem's NSI-189 was originally identified as a compound that caused selective neurogenesis—the growth of neurons in the hippocampus, the region of the brain that controls learning and memory. It was widely thought this drug could be used as a broad-spectrum concentration and cognitive performance enhancer. Maybe one day it could be used to make healthy people smarter.

Recent data show NSI-189 is a very effective antidepressant, and that represents a low-risk, relatively rapid clinical development path that Neuralstem could use to bring this drug to market. If Neuralstem were to partner NSI-189, given the context of the deals that Bionomics was able to strike with its early-stage CNS compound, the drug should be valued pretty richly, and could provide ample justification for Neuralstem's entire market cap as it currently stands. It is going to take some time for Neuralstem to get a Phase 2b study underway. We don't anticipate that study starting until next year, and not yielding data until early 2017. But the drug is a value driver nevertheless.

TLSR: What is the most powerful value driver for Neuralstem? Is it the stem cell program in ALS, or the small molecule program in depression?

RS: You can pick the argument you want to make here. Does the market value Neuralstem adequately on the basis of its stem cell platform and not the small molecule? Or does it value Neuralstem adequately based on its small molecule, and not value the stem cell therapy adequately? Either way, you are getting a free call option. Neuralstem has two very credible shots on goal.

TLSR: Back in mid-April, Neuralstem got approval from the institutional review board at the University of California, San Diego, to begin a Phase 1 trial in chronic spinal cord injury (NCT01772810). Do you know when this study will begin?

RS: It will take some time for patient enrollment to get this spinal cord injury trial up and running. You can't just cherry-pick spinal cord injury patients. You have to wait for a patient who meets all of the inclusion criteria and none of the exclusion criteria to present at one of the centers currently involved in the trial. But we believe Neuralstem has additional value drivers with the stem cell program vis-à-vis its spinal cord injury program, and the company is also working on an array of neurodegenerative conditions, including Parkinson's disease and ischemic stroke. In the long run, these programs will begin accruing data and demonstrate to the market how broadly Neuralstem can reconstitute damaged neuronal circuitry.

TLSR: Your target price on Neuralstem is $8. That implies a market valuation of about $600M for this company. Is that a one-year target price? And can you comment on why you have raised your target price on Neuralstem twice this year?

RS: Yes, it's a one-year target. As to the raises: We waited a long time for the company to provide additional data on the ALS front, and additional evidence it was pursuing indications beyond ALS. Neuralstem delivered on these two fronts, and delivered on the small molecule as well. This company has never had a negative clinical data press release, and this is not because it spins data. It's a testament to the high quality of its science. Only the highest quality science has a chance of succeeding in these difficult neurodegenerative diseases.

I have substantial positive sentiment for Neuralstem's prospects, because I believe it practices a high degree of scientific rigor. Its preclinical findings have only been published in the best journals. That speaks volumes about the potential for its therapeutic approaches.

TLSR: Could we talk about some other companies in your coverage?

RS: Sure. Aldeyra Therapeutics (ALDX:NASDAQ) is an Aegis-led initial public offering (IPO) that we took public earlier this year. It's an interesting orphan disease-focused company that could leverage its orphan drugs into much larger, nonorphan disease indications.

Aldeyra has a very interesting platform technology focused on trapping free aldehydes—molecules widely known to be associated with inflammation. They work via the canonical NFkappaB pathway, which is implicated in the production of pro-inflammatory cytokines and other inflammatory processes. Suppression of free aldehydes should provoke a potent anti-inflammatory effect, and potentially reduce the tissue damage associated with chronic inflammation. The company is currently developing both topical and ocular (but not intraocular injectable) formulations of its lead drug NS2, which seems to specifically bind free aldehydes and transport them to cellular lysosomes, where they are degraded. This reduces inflammation and resulting fibrosis.

"Whenever you have a company actively looking to lower its tax rate, the shareholder sees a tangible benefit because, clearly, that company is making money."

We like this model because both the dermatological and ophthalmological indications present unique drug development advantages. The associated clinical trials are easy to conduct and relatively low cost. Endpoint outcomes are easy to assess and are typically objective in nature, and therefore there really isn't any confusion as to whether the drug is having an effect. The company's lead indications would be Sjögren-Larsson syndrome (SLS) on the dermatology side, which is a very rare skin disease, and anterior uveitis (inflammation within the eye) on the ocular side. The drug is easily administered as an eye drop and does not require an intravitreal injection. The company could easily extend use of NS2 into eczema or atopic dermatitis, or conjunctivitis on the ophthalmological front. For these reasons, we think Aldeyra is undervalued.

The company was cofounded by Domain Associates, a well-known West Coast venture capital company, and the Johnson & Johnson Development Corp., which is the corporate venture capital arm of J&J. The J&J Development Corp. has been a tireless supporter of Aldeyra. We anticipate Aldeyra should begin a Phase 2/3 study in SLS within the coming weeks, and add to those development programs with additional Phase 2 proof-of-concept studies in the other indications I have mentioned.

TLSR: Ram, you have a $35 price target on Aldeyra, and the current price is about $4/share. That is a significant implied return for investors. How do these upcoming catalysts translate into that kind of share price movement and valuation?

RS: We need to take into account where this company is currently valued versus other companies in the orphan disease space. Currently, Aldeyra trades at a $20M valuation with an enterprise value (EV) of roughly $5–10M, which is negligible. Yet other orphan drug-focused companies are trading at much higher valuations. Synageva BioPharma Corp. (GEVA:NASDAQ), which has a single product candidate in late-stage development and is targeting a disease indication that afflicts maybe 800 people in the U.S., is trading at a roughly $2.8B valuation. Ultragenyx Pharmaceutical Inc. (RARE:NASDAQ), a recent IPO, trades at a current market cap of nearly $1.4B. Publicly traded comparables lead us to believe a significant increase in the price of Aldeyra is not outlandish.

Essentially, we're expecting Aldeyra to get to the $210–220M EV level. I don't think is out of the question, given the clear rationale for treating SLS and the possibility of success in that indication alone. Free aldehydes play a pivotal role in the pathogenesis of SLS, so there's clearly a mechanistic link with NS2.

TLSR: Is there another name you might mention?

RS: Protalix Biotherapeutics Inc. (PLX:NYSE) also focuses on the orphan disease space, and is attempting to bring more reasonably priced orphan drugs to the market by invoking its proprietary protein manufacturing platform, which utilizes plant cells cultivated in culture. Essentially, the company is producing drugs for humans in various types of plant cells rather than mammalian cells.

Protalix's lead drug candidate is made in immortalized carrot cells; from a technology standpoint, it's very interesting. However, the company's market performance has left much to be desired, because it operates in a space where there is entrenched competition. It focuses on an ultraorphan disorder called Gaucher disease, a lysosomal storage disease in which patients are afflicted with a deficiency in a specific enzyme that operates in the lysosomes. The canonical treatment is to supplant this defective or absent enzyme with external supplies of the enzyme manufactured with recombinant DNA technology. Sanofi SA (SNY:NYSE), through its Genzyme subsidiary, is manufacturing a recombinant version of this enzyme called Cerezyme (imiglucerase), which has been on the market for many years. Shire has a similar version of the enzyme, Vpriv (velaglucerase alfa).

From our perspective, it's difficult for Protalix's marketed product, Elelyso (taliglucerase alfa), to make headway, even though the drug has a lower cost of production and can be priced at a discount to the competitors. It's difficult to get market share if a patient is on one of the entrenched drugs, as it is difficult to convince a physician to switch. Protalix has partnered Elelyso with Pfizer in several countries outside of Israel, but Pfizer isn't making as much headway as we would like.

Protalix is trying to develop a version of its enzyme-based therapy that would allow Gaucher patients to drink the drug, as opposed to having it injected. That would be a significant and convenient advantage. But that formulation is still in early-stage clinical testing, and will probably take several years to bring to market. For those reasons, we have a Hold rating on Protalix.

TLSR: You mentioned SciClone Pharmaceuticals. Could you address it?

RS: We're interested in SciClone because it represents a value play in the specialty pharmaceutical space. It targets an intriguing market, that being China. We have cultivated a subvertical within our coverage universe that focuses on Chinese healthcare companies with listings in the U.S. The idea was to give U.S. institutional investors a taste of the Chinese healthcare market, and exposure to the significant growth potential that exists there.

SciClone is headquartered in Foster City, California, but is officially tax-domiciled in the Cayman Islands and, therefore, enjoys a very low effective tax rate. It typically generates 90% or more of its revenue base from sales in China. Its lead drug is Zadaxin (thymalfasin), which is widely used to treat a number of infectious diseases, including hepatitis B. It's considered a broad-spectrum immune system enhancer. Manufactured in Italy and exported to China, Zadaxin is considered a premium brand because of its western manufacturing origin. A lot of Chinese patients don't trust drugs—particularly specialty drugs—that are manufactured within China because of the possibility of contamination and subpar manufacturing operations. SciClone retains the Western cachet despite the fact that other versions of its product, manufactured by Chinese drug makers, are on the market.

TLSR: You've discussed Acorda Therapeutics Inc. (ACOR:NASDAQ) in previous interviews. Would you address it briefly?

RS: I would point out to investors that the stock has been hurt by a couple of things—principally the irrational fear that the company's lead drug, Ampyra (dalfampridine), currently marketed to treat walking impairment in multiple sclerosis (MS), is going to face generic competition imminently. In our view, that won't happen.

First, the company has orphan drug status for Ampyra, which will run out in January 2017. Second, the company had a patent on Ampyra that expired in October 2013, but obtained the full five-year Hatch-Waxman extension, which protects the drug to 2018. Finally, Acorda pursued and received another patent for Ampyra in MS, which will expire in 2027. While we acknowledge that generic competitors might try to challenge that patent, we believe Acorda will fight very hard to defend it.

TLSR: Your target price is $50, about a 65% return from current levels. What's the driver?

RS: We believe the company will be able to demonstrate the utility of Ampyra in a much larger disease indication, post-stroke deficit. These patients have significant neurological issues after a stroke. They can't walk properly, have inferior grip strength, suffer impaired functional independence and so on. Acorda has already demonstrated, in a well-powered proof-of-concept Phase 2 study, that Ampyra would be useful in the post-stroke deficit setting.

The company recently had a couple of issues with its once-daily formulation of Ampyra, which has delayed the start of the Phase 2/3 proof-of-concept stroke study, but we anticipate the study will get underway before the end of this year, and should yield data in 2015. If positive, the data could allow Acorda to target a 7M-strong market of patients in the U.S. alone. There's no effective therapy currently. That's a substantial, relatively near-term market opportunity for Acorda, and the stock is, in our view, undervalued.

TLSR: Did you have another name?

RS: Synergy Pharmaceuticals Inc. (SGYP:NASDAQ) has also been knocked around due to vagaries in the market. We continue to be bullish on this name. We have a $26 price target. We anticipate the company will report additional clinical data this year, most notably from a clinical study of plecanatide in opioid-induced constipation, which would be the third indication where it demonstrates efficacy, after irritable bowel syndrome (constipation-predominant subtype) and chronic idiopathic constipation. We believe Synergy Pharmaceuticals is undervalued, particularly in the context of the current valuation of its closest comparable, Ironwood Pharmaceuticals Inc. (IRWD:NASDAQ), with its marketed product Linzess (linaclotide). We also believe that in the long run, Synergy will be able to demonstrate equivalent efficacy to Ironwood's product, as well as the possibility of demonstrating a substantially superior safety profile.

TLSR: Thank you, Ram.

Raghuram "Ram" Selvaraju's professional career started at the Geneva-based biotech firm Serono in 2000, where he discovered the first novel protein candidate developed entirely within the company. He subsequently became the youngest recipient of the company's Inventorship Award for Exceptional Innovation and Creativity. Selvaraju started in the securities industry with Rodman & Renshaw as a biotechnology equity research analyst. He was the top-ranked (#1) biotech analyst in The Wall Street Journal's "Best on the Street" survey (2006) and went on to become head of healthcare equity research at Hapoalim Securities, the New York-based broker/dealer subsidiary of Bank Hapoalim B. M., Israel's largest financial services group. While at Hapoalim, Selvaraju was regularly featured in The Wall Street Journal, Barron's, BioWorld Today, and Reuters/AP. He was also a regular guest on the Bloomberg TV program "Taking Stock," appeared with Bloomberg TV's on-air correspondents Betty Liu and Gigi Stone, and was a guest on CNBC's "Street Signs with Herb Greenberg." He is currently an analyst with Aegis Capital Corp.

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1) George S. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Neuralstem Inc., Arno Therapeutics Inc. Streetwise Reports does not accept stock in exchange for its services.
3) Raghuram Selvaraju: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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