Investing in biotech companies can be intimidating, especially for investors without a science background. But there's hope. Understanding the naming system can make things easier to piece together, giving you confidence to invest in the sector.
Here's a breakdown of some of the suffixes that biotech companies use to name their generic drugs:
-afil: Erectile dysfunction drugs that inhibit phosphodiesterase 5 usually end in -afil. Pfizer Inc. (NYSE:PFE)'s Viagra (sildenafil), and Eli Lilly & Co. (NYSE:LLY)'s Cialis (tadalafil) are members of the group.
-alol: Alpha and beta blockers, which includes a multitude of drugs, usually end in -alol.
-caserin: Drugs that stimulate the serotonin receptor end in caserin like Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)'s Belviq (lorcaserin). The drug is approved to treat obesity, but drugs that activate the serotonin receptor can do other things. Wyeth was developing one, vabicaserin, as an antipsychotic, for instance.
-mab: Drugs that end in -mab are usually monoclonal antibodies. Monoclonal means they bind to a protein in one specific site. Monoclonal antibodies usually inhibit the protein they're designed to bind to. AbbVie Inc (NYSE:ABBV)'s Humira (adalimumab), for instance, binds to tumor necrosis factor-alpha, which prevents it from activating a cascade that stimulates the immune system.
-sartan: Blood pressure drugs that block the activation of angiotensin II AT1 receptors usually end in -sartan. Merck & Co., Inc. (NYSE:MRK)'s Cozaar (losartan) and Novartis AG (ADR) (NYSE:NVS)' Diovan (valsartan) are both in this class of drug.
-statin: This is an obvious one. Statins, which lower cholesterol by inhibiting HMG-CoA reductase, usually end in -statin. Interestingly, the companies also used a similar naming situation (ending the drugs in -or) for many of the brand names as well: Pfizer Inc. (NYSE:PFE)'s Lipitor (atorvastatin), Merck & Co., Inc. (NYSE:MRK)'s Zocor (simvastatin), and AstraZeneca plc (ADR) (NYSE:AZN)'s Crestor (rosuvastatin). As far as I know, the companies weren't required to follow a similar naming for trade names, but it probably just made sense after the first couple did it.
-vir: Most antiviral drugs end in -vir, although not every drug used to treat viral infections uses the scheme. Gilead Sciences, Inc. (NASDAQ:GILD) had two HIV drugs turned down by the Food and Drug Administration this week: elvitegravir and cobicistat. The latter doesn't end in -vir, likely because cobicistat is considered a booster; its job in the drug cocktail is to inhibit human proteins responsible for breaking down the other drugs.
What's in a name? Biotech companies usually give drugs at least three different names during their development. Drugs often start with a code name. Pfizer Inc. (NYSE:PFE), for instance, names its early stage drugs PF- followed by a series of numbers. Next, biotech companies assign generic name using the system outlined by the U.S. Adopted Names Council. Finally, drugs are given a brand name that's regulated by the FDA.