Cramer: Don’t Overlook This Biotech

Although the developments were heart-breaking for the medical community – the investment community always looks at price action and the price action was impressive despite the bad news.

Piper Jaffray estimated Biogen spent $75 million to $100 million on the failed trial alone.

"Yet, the stock barely took a hit," said Cramer.

In part that's because Biogen also has a major hemophilia program in the pipeline, one that could potentially generate $3 billion in sales by the second half of the decade.

However, the relative strength in the stock price more likely reflects Biogen's position in n the multiple sclerosis market.

As you may know, MS is it's a life-long, chronic, often disabling disease that attacks the central nervous system. Although there's no cure for MS, there are drugs that can keep the disease at bay by preventing relapses.

"And currently Biogen has two of them on the market, two blockbuster MS drugs, Avonex, which is one of the traditional treatments, and Tysabri, a newer, more effective drug that also has a higher risk of bad side effects," Cramer explained..

Also Biogen's is working on a third multiple sclerosis drug, BG-12, one that can be taken orally rather than injected.

Management has said it would appeal to a very broad patient population. In fact, BG-12 could become the new leading first-line treatment for MS, potentially doing $2.4 billion worth of sales in 2016.

"That's a big deal," said Cramer.

And chatter on the Street suggests the FDA could approve this new drug as soon as late March.

All told, Cramer is bullish.

"Biogen is a classic biotech stock with a bright future and I think it's exactly the kind of thing you should think about buying when we get broad market-wide weakness," he concluded.

Find out more about this company and drugs in the pipeline from Dr. George Scangos, the CEO of Biogen Idec, in the video above.

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Top Biotech Trades

 Highlight transcript below to create clipTranscript:  Print  |  Email Go  Click text to jump within videoThu 10 Jan 13 | 05:53 PM ET Biotech stocks are outperforming the major indices, and are up 3 percent over the past week. CNBC's Seema Mody is tracking which stocks are trending on Twitter.

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Biotech Stocks Rally

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UPDATE 1-FDA closer to approving biotech salmon, critics furious

* FDA to take comments for 60 days before giving final OK

* Critics seek action from Congress, threaten to sue

Dec 21 (Reuters) - A controversial genetically engineered salmon has moved a step closer to the consumer's dining table after the U.S. Food and Drug Administration said Friday the fish didn't appear likely to pose a threat to the environment or to humans who eat it.

AquAdvantage salmon eggs would produce fish with the potential to grow to market size in half the time of conventional salmon. If it gets a final go-ahead, it would be the first food from a transgenic animal - one whose genome has been altered - to be approved by the FDA.

The AquAdvantage Atlantic salmon egg was developed by AquaBounty Technology to speed up production to meet global seafood demand.

In a draft environmental assessment, the FDA affirmed earlier findings that the biotech salmon was not likely to be harmful. It said it would take comments from the public on its report for 60 days before making a final decision on approval.

"With respect to food safety, FDA has concluded that food from AquAdvantage salmon is as safe as food from conventional Atlantic salmon, and that there is a reasonable certainty of no harm from consumption," the FDA assessment states.

AquaBounty officials said they were caught by surprise by the news that its product was a step closer to approval as years of controversy had followed the company's application for a go-ahead from the regulator. They said they did not know the timing or details of the process the FDA will follow following the 60-day comment period.

"We are encouraged that the environmental assessment is being released and hope the government continues the science-based regulatory process," said AquaBounty Chief Executive Ronald Stotish.

Critics say the new salmon is a "dangerous experiment" and have pressured the FDA to reject it. They say the FDA has relied on outdated science and substandard methods for assessing the new fish.

"We are deeply concerned that the potential of these fish to cause allergic reactions has not been adequately researched," said Michael Hansen, a scientist at the Consumers Union. "FDA has allowed this fish to move forward based on tests of allergenicity of only six engineered fish, tests that actually did show an increase in allergy-causing potential."

There were also concerns the FDA would not require the genetically modified salmon to be labeled as such, and some critics said they may file a lawsuit to prevent what they fear could be the imminent approval of the engineered fish.

"Congress can still keep FDA from unleashing this dangerous experiment," said Wenonah Hauter, executive director of Food & Water Watch, a consumer advocacy group. "Although this latest FDA decision is a blow to consumer confidence, we encourage everyone to contact their members of Congress and demand this reckless decision be overturned."

The Center for Food Safety, another non-profit consumer protection group, was highly critical of the FDA report, and officials said they might sue the regulator over the issue.

"It is extremely disappointing that the Obama Administration continues to push approval of this dangerous and unnecessary product," said Andrew Kimbrell, executive director of the Center for Food Safety. "The GE salmon has no socially redeeming value. It's bad for the consumer, bad for the salmon industry and bad for the environment."

FDA spokeswoman Morgan Liscinsky said no final decisions have been made on labeling or on the application for approval.

"The release of these materials is not a decision on whether food from AquAdvantage Salmon requires additional labeling; nor is it a decision on the new animal drug application currently under review. It also does not provide a final food safety determination," Liscinsky said.

The AquAdvantage salmon would be an all-female population with eggs produced in a facility on Prince Edward Island in Canada and shipped to a "grow-out facility" in Panama, where they would be reared to market size and harvested for processing.

(Editing by Bernadette Baum; and Peter Galloway)

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