The Road Gets Harder For Aastrom Biosciences (ASTM)
Aastrom Biosciences (ASTM) is off almost 70% over the
last year. The company operates in the stem cell arena
of biotech and its future is based on its proprietary Tissue
Repair Cell (TRC) technology. The market clearly does
not think much of ASTM’s prospects as it sits at $.38,
near its 52-week low.
When the company released Q1 earnings its claimed
that its dilated cardiomyopathy treatment had done
well in early European Union trials. It plans to do similar
work in the US. The therapy is meant for patients who
are not candidates for transplants or any other currently-
available technology. Obviously, there are tens of thousands
of the severely ill who look to the ASTM developments
as among their only hopes.
As part of its quarterly statement, ASTM said that it
may try a reverse-split of it stock to get it back over $1
and into compliance with Nasdaq regulations. But,
if its financial fortunes do not improve soon, it may
not matter.
In the first quarter, ASTM lost over $5 million on virtually
no revenue, up from a loss of $4.5 million in the year
ago period. The company had cash of $26 million.
Like so many of these small biotechs, and Aastrom only
has a market cap of $51 million, the money may run out
before it gets a product to market.
Douglas A. McIntyre
Activists Gathering Up Behind Dendreon (DNDN)
Dendreon Corp. (NASDAQ: DNDN) is perhaps one of the more controversial cancer stocks on the market right now. Its PROVENGE failed to win FDA approval last year and the controversy has never gone away. Many feel that FDA evaluation process was flawed or that there were conflicts of interest that kept it from having a fair review. The flipside of this argument is that there are arguments that it should never receive approval and that the results on larger groups are questionable.
Either way, fortunes were made and lost last year on more than one occasion by those who bet for Dendreon or against it.
But next week there is going to be a nine-city protest scheduled by activists protesting the FDA’s decision. CareToLive is sponsoring the protests. The move will be to make PROVENGE available to any men with late stage prostate cancer.
There has already been at least one Congressional action that may lead to further inquiries on this matter.
The FDA may have its own justifications for its decision, but the problem is that when you have some reports that show a direct extension of life you can’t tell someone with late stage prostate cancer that there are side effects or that there are efficacy issues in larger groups. Unfortunately it is like telling someone on death row that they shouldn’t be eating eggs because of the cholesterol and risks of salmonilla.
Bizjournals.com noted that the rallies are scheduled for Seattle, Chicago, New York, Philadelphia, Cleveland, Madison, Dearborn, and Tampa.
Dendreon didn’t even get much of an ASCO boost over the last week and shares have come off about 10% from last week’s highs. It will be interesting to see the reaction next week. Interviews with dying patients who say that the FDA is blocking their last chance of living longer isn’t going to shine that brightly on the FDA.
Just last month, Dendreon announced a new capital raise that will help get the company through 2008 and 2009 while this saga continues.
Those who suffer from late-stage prostate cancer understand the inevitable outcome for this. They are not expecting or demanding a miracle. But an extension to their life is currently not on the market or is being held back from them.
Jon Ogg
May 22, 2008
Anavex Life Sciences Corp Adds A Director, Promising News
Anavex (AVXL.OB) added Alison Ayers, the the Worldwide Commercial Head for Oncology at Pfizer (PFE) to its board. It may be a sign that the company’s prospects are picking up considerably. The firms recently announced that its ANAVEX 7-1037 “has demonstrated its ability to significantly delay the growth of cancerous tumors in patient-derived xenografts during advanced pre-clinical studies.”
The company lost $671,000 in the last quarter compared with a loss of $168,000 last year.
It is hard to imagine a senior Pfizer exec would join up unless the firm was making some demonstrable progress.
Douglas A. McIntyre
Regeneron Feels Cancer Setback (REGN)
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) has provided an update on its clinical development program for aflibercept, which includes results from a Phase 2 study in advanced ovarian cancer. The drug is under development with Sanofi-Aventis (NYSE: SNY).
Unfortunately, this study failed to meet its primary endpoint of achieving a base of 5% response based on certain criteria in two dosage strengths. These results were from an independent review committee. The higher dosage of aflibercept achieved a 4.5% response, but the lower dose generated a mere 0.9% response.
The companies are still evaluating their next steps to take in the advanced ovarian cancer indication, although this response rate is low enough that you have to wonder if the entire program for this indication will be shelved so it can concentrate on the other indications.
The companies are still evaluating aflibercept as a chemotherapy combination potential treatment in four late-stage studies to evaluate the treatment of prostate, pancreatic, colorectal, and non-small cell lung cancers.
Regeneron still has more than ample cash and liquidity to keep funding its existing trials and existing programs. With $826 million total liquidity as of last quarter (cash, equivalents, long-term investments) and total liabilities of $470 million, the company even has enough dough to look for new opportunities.
Shares of Regeneron are down 14% at $18.40 and the 52-week trading range is $13.55 to $25.25. If this was the only program and if there was less liquidity, the drop would have been far worse.
Jon Ogg
May 21, 2008
Enzon Gets Activist Pressure (ENZN)
Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is feeling some pressure from an activist investor today. DellaCamera Capital Management, LLC, a 5.9% beneficial stakeholder of Enzon common stock, noted that Enzon needs to show much more concrete and immediate action from the Company to increase value.
DellaCamera said it was please to see on May 7 that Enzon had announced a plan to spin-off its biotechnology business, but the group wants Enzon to take the next logical step by exploring all strategic alternatives for the remaining commercial operations (marketed products, royalties, and manufacturing businesses), including the sale of the commercial operations as a whole. The group also wants Enzon to engage its adviser Goldman Sachs or another investment banking firm to assist in the full review and exploration of unlocking that value.
As far as the rest of the details it outlines, you can see the activist filing here. That will also show you the shares and call options that DellaCamera collectively owns.
Enzon’s market cap is nearly $400 million after a 2% gain to $8.93 today; and its 52-week trading range is $6.31 to $10.36.
On last look it had $258 million in liquid cash, equivalents, and long-term investments. It also had some $383 million in total liabilities.
Forcing companies under an activist pressure can work in many cases, but in stretched biotech companies it can be rather difficult to force the water back upstream.
Jon Ogg
Biotech Funding Gets Hammered
Biotech may still be a hot place for venture capitalists to invest, but, in 2008, funding has dropped as the entire investing world has taken on water.
Ernst & Young says that money put into biotechnology companies hit a record in 2007 at $21.3 billion with $5.5 billion coming from venture capital.
According to the San Francisco Chronicle, E&Y says “Total fundraising year to date (for biotech) in 2008 is down by 60 percent.”
Private companies will probably be hit much worse than public ones. Another conclusion of the E&Y study is that “Of the 386 publicly traded U.S. biotechnology companies, 49 percent have more than two years of cash on hand, Ernst & Young reported.”
In many cases, two years is not going to cut it.
Douglas A. McIntyre
Amgen (AMGN) Claims Osteoporosis Break-Through
Amgen (AMGN) claims that it has developed a new and better drug treatment called denosumab for osteoporosis. The current drug of choice is Fosamax from Merck (MRK).
According to the AP “The one-year, Phase III clinical trial showed post-menopausal women gained more bone mass after transition to denosumab.”
A generic version of Fosamax is marketed by Teva (TEVA).
The news can’t be viewed as good for Merck
Douglas A. McIntyre
China Shenghuo Pharmaceutical (KUN) Biotech Bomb
China Shenghuo Pharmaceutical (KUN) sounds too good to be true. It claims to have products for cardiovascular and cerebrovascular disease, peptic ulcer disease, occlusion of retina central vein, and cerebral vascular-metabolic disorders caused by arteriosclerosis.
Not likely.
The company, based in China, is getting bombed today, down over 5% to $5.21.
KUN has not had much news lately, but it is in bad shape and Wall St. should wonder whether the company can survive. It had total current liabilities of over $16 million and over $6 million in long term debt against less than $3 million in cash.
For the full year 2007 China Shenghuo Pharmaceutical had revenue which was flat from the previous year at $19.9 million. Income from operations was down about 60% to $2.9 million.
KUN said that for the 2008 fiscal year, management expects revenues of between $27.0 million and $30.0 million and net income of between $5.0 million and $6.5 million.
That is only if the company makes it that far.
Douglas A. McIntyre
Unusual Biotech Movers (ASTM, BTRX, BCRX, CELG, NSTK, TRMS)
If you are a stem cell watcher, you may want to watch Aastrom Biosciences Inc. (NASDAQ: ASTM) as it reports earnings on Monday. Shares are down 3% at $0.40 today. With a $53 million market cap, this isn’t the most influential stock tied to stem cells.
Barrier Therapeutics Inc. (NASDAQ: BTRX) saw some highly unusual movement with a 15% rise to $2.31 (52-week trading range $1.63 to $7.60).
BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX) saw a continues drop of almost 7% to $2.73 today, and that is after a similar drop yesterday after the company’s earnings report.
Celgene Corporation (NASDAQ: CELG) saw a 1% drop to $61.80. We saw a duel in analyst calls today, and generally speaking downgrades take away more ‘ooomph’ than upgrades can add on the same day, particularly when the downgrade is from a bulge bracket firm and the upgrade is by a boutique. Pacific Growth Equities raised its rating to Buy, but Credit Suisse lowered its rating to Neutral from outperform.
Nastech Pharmaceutical Company, Inc. (NASDAQ: NSTK) saw a drop of more than 8% to $1.19 after its earnings report yesterday. 52-week trading had been $1.25 to $17.05. Count that as a 52-week low.
Shares of Trimeras Inc. (NASDAQ: TRMS) are down 9% at $6.35 today after the company has unveiled its plans to return most of its cash to shareholders now that it is down to a whopping 10 employees. At $50, 5-years ago, this stock has gone from potential boom to bust. Why does the term biotech zombie ring a bell here????
Rachel Lopez
May 9, 2008
Novo Nordisk Donates Compound Library to China Center
by Richard Daverman, PhD
ChinBio Today
Novo Nordisk (NYSE: NVO) donated a license for its very extensive small-molecule compound library to the National Center for Drug Screening (NCDS), which is affiliated with the Shanghai Institute of Materia Medica, Chinese Academy of Sciences. The compound library contains an estimated 325,000 chemical structures. Because Novo Nordisk is turning its attention from small-molecule drugs to protein-based compounds, the company wanted the library, accumulated over decades of research, to be put to good use. It feels that NCDS will be able to accomplish that by using the library to find drugs for unmet needs.
The NCDS will screen the library’s compounds and its database for drug candidates that can treat and prevent the infectious tropical diseases that afflict people in poor countries. In this endeavor, the NCDS will be aided by the World Health Organization-based Special Program for Research and Training in Tropical Diseases (TDR).
The TDR will select targets and screens to support the identification of new drug candidates or leads for infectious tropical diseases, including malaria, tuberculosis, African sleeping sickness, dengue, Chagas disease, leishmaniasis, schistosomiasis, filariasis, onchocerciasis and soil-transmitted helminths. It will also bring in young scientists from developing countries, especially Africa, to be trained at the institute, combining scientists from developing and developed countries.
Novo Nordisk was the first international pharmaceutical company to establish an R&D center in China, building a Center of Excellence in Beijing in 2002. Previously, the company constructed a manufacturing facility to make insulin in Tianjin in 1996. Novo Nordisk has been selling diabetes-related products in China since the 1960s.
ChinaBio Today is a regular contributor to BioHealth Investor
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