EOG Resources, Inc. (NYSE: EOG) shares moved sharply higher today after the company announced it increased organic production growth estimates for 2009 and 2010 to 13 to 15 percent from the previously stated annual average of 10 percent. The oil company also disclosed information about four promising new crude oil and natural gas plays that could contribute to future reserve and production growth. And finally, it increased the potential reserve recovery from its Fort Worth Barnett Shale and Uinta Basin natural gas players. Combined, this is great news for shareholders as increased production schedules combined with record crude oil prices make for a profitable combination!

“By applying our expertise in horizontal drilling and completion techniques, EOG is positioned to replicate its success in the Fort Worth Basin Barnett Shale and North Dakota Bakken with several newly identified onshore North American plays that show substantial promise,” said Mark G. Papa, Chairman and Chief Executive Officer. “Although some of these discoveries are in the very early stages of delineation, they are expected to impact EOG’s reserves and production in the coming years.”

There are two key things worth noting in these recent statements. First, EOG Resources has developed better horizontal drilling and recover techniques that should allow it to achive higher per well reserve recoveries not only in Fort Worth but in future projects as well. Secondly, there are several remaining potential production increases that have not been considered for EOG’s production growth targets for 2009 and 2010. One in particular is a fourth horizontal well being drilled in northeastern British Columbia’s Horn River Basin where the company owns 140,000 net acres.

In the end, these production increases and potential production increases combined with increasing energy prices should not only enable EOG Resources to meet its future growth targets but surpass them by a substantial margin. Shares have rise over 20 percent today, adding billions to the company’s market cap, but there may be some room yet for even more upside when things settle down. Combined, these factors make EOG a stock worth watching closely!

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Unfortunately for Eli Lilly and Co. (NYSE: LLY), the FDA has rejected its application to sell a once-a-month injectable version of its schizophrenia drug Zyprexa.
 
The pharmaceutical company announced that the FDA issued a "not approval letter" for the drug, due to concerns about excessive sedation. This means that Lilly needs to perform additional studies before the drug can be reconsidered. This decision overrules a nonbinding recommendation issued earlier this month by FDA advisory panel that the drug should be approved despite concerns surrounding excessive sedation.

Given that the FDA usually follows the recommendation of its advisors, this news was surprising to the company and investors. Eli Lilly understandably said it was disappointed by the FDA's decision.

The drug is an alternative to Zyprexa, which is designed to ease hallucinations and other symptoms of schizophrenia. Zyprexa is already on the market in tablet form, but this new drug would allow administration only once a month.

A "not approval letter" usually means a drug is dead, but even if Eli Lilly can convince the FDA this hurdle will cause a significant delay to market.

This is all bad news for the Indianapolis-based company because though it has almost $19 billion in annual sales, this drug was predicted to add $500 million annually within two years. Long-term, a pharmaceutical company is only as good as its drug pipeline, and with Eli Lilly shares down only about 2% on the news the share price may not yet reflect the full consequences of this decision.

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MiddleBrook Pharmaceuticals, Inc. (NDAQ: MBRK) shares continue to surge today after the company said earlier this month that it hired Morgan Stanley to explore strategic alternatives, including a possible sale of the company. A recent FDA approval in January helped triple the company’s market value while an analyst commented that the company could look at a premium of 30 percent in case of a potential sale. Many other investors believe that the company could see an even higher premium given its novel Pulsys technology that would also be acquired. So, is MBRK a stock worth adding to your portfolio?

MiddleBrook received approval for its New Drug Application (NDA) from the U.S. Food and Drug Administration (FDA) for its one-daily Moxatag Tablets 775mg for the treatment of adults and pediatric patients 12 years and older with pharyngitis and/or tonsillitis secondary to Streptococcus pyogenes. According to the company, the approval was based on the company’s Phase 3 clinical study of more than 600 adults and pediatric patients 12 years and older in a double-blind, double-dummy, randomized, parallel-group, 50-center non-inferiority trial. News of this approval jumped shares from around $1.50 to over $3 the next day.

“We are extremely gratified to have received FDA approval of our MOXATAG NDA,” stated Edward Rudnic, Ph.D., president and CEO of MiddleBrook. “As the first and only once-daily amoxicillin therapy approved for marketing in the United States, we believe MOXATAG represents a major advance for patients and doctors seeking safe, effective, and convenient treatment options for strep throat. We now look forward to continuing our ongoing strategic evaluation process from a position of greater strength with this approval in hand.”

The approval brings to market the first major product that illustrates MiddleBrook’s PULSYS technology. This technology is essentially a change in the dosing paradigm that allows for more effective treatments that only have to be taken once daily. PULSYS exposes bacteria to rapid antibiotic pulses within the first hours of initial dosing, which appears to cripple bacteria’s natural defense mechanisms and eliminate them more efficiently and efectively than traditional infectious disease therapy regiments. MiddleBrook is one of the only high-tech companies focused on the antibiotics sector and seeks to redefine infectious disease therapy with this process. And it seems to be working in this latest drug release.

“Compared to four times daily penicillin, once-daily MOXATAG has shown comparable efficacy and tolerability in eradicating Group A streptococcal infections of the pharynx. However, the once-daily dosing of MOXATAG is a major advantage,” said lead study investigator Stan L. Block, M.D., professor of clinical pediatrics at the Universities of Louisville and Kentucky Medical Schools. “For the first time, physicians in the U.S. have the option of an FDA-approved once-daily amoxicillin therapy to treat their adolescent and adult patients with pharyngitis/tonsillitis. This should ensure better first- line therapy compliance with a penicillin class of antibiotic.”

In the end, all startup biopharmaceutical companies are risky ventures as they have no revenues and high R&D overhead. That said, MiddleBrook recently received an NDA and go-ahead from the FDA and was even able to raise an additional $21 million through a stock offering. This means that they should have a product to market within the next year while other investors are showing enough confidence to capitalize the company and keep it alive until it becomes profitable. However, given the steep rise in recent days, we could see a pullback before any more substantial gains. Combined, these factors make MBRK a stock worth watching in 2008!

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