FDA Alert on Weight Loss Pills
Being overweight or being obese is perhaps one of the greatest healthcare woes in the U.S., and this is certainly the case if you consider the amount od downstream and secondary effects of diabetes, hypertension, heart disease, higher rates of cancer, joint damage, and on and on. It seems that a whole host of over the counter weight loss products have just been red-flagged by the FDA.
The FDA has issued an alert for consumers nationwide not to purchase or consume more than 25 different products marketed for weight loss because they contain undeclared, active pharmaceutical ingredients that may put consumers’ health at risk. The tainted weight loss products are:
- Fatloss Slimming, 2 Day Diet, 3x Slimming Power, Japan Lingzhi 24 Hours Diet, 5x Imelda Perfect Slimming, 3 Day Diet, 7 Day Herbal Slim, 8 Factor Diet, 7 Diet Day/Night Formula, 999 Fitness Essence, Extrim Plus, GMP, Imelda Perfect Slim, Lida DaiDaihua, Miaozi Slim Capsules, Perfect Slim, Perfect Slim 5x, Phyto Shape, ProSlim Plus, Royal Slimming Formula, Slim 3 in 1, Slim Express 360, Slimtech, Somotrim, Superslim, TripleSlim, Zhen de Shou, Venom Hyperdrive 3.0
From the release…..
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Imaging Agent Creates Exponential Gains (EPIX)
EPIX Pharmaceuticals, Inc. (NASDAQ: EPIX) showed us a stunning move for our volume spike screening for traders, but the news itself is rather remarkable if the market can be expanded to the fullest extent that many would hope.
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Can Merck Defeat Biotech Leaders? (MRK, RDY, DNA, GILD, GENZ, CELG, AMGN, BIIB)
This morning was an interesting bit of pre-release data on Merck & Co. Inc. where the company gave its full financial forecasts the same as last week and where the company laid out its full pipeline and R&D plans for 2009 and into the next decade. There are a few key observations here and you can see the full summary to the company’s pipleline. The first observation is that it may be a wonder how Merck thinks it can actually be a major competitor to biotech companies. We have long argued that biotech companies are just future drug and pharmaceutical companies. But it is very difficult to argue that entrenched drug companies can become biotech leaders in the same manner.
Merck is launching Merck BioVentures, a new division to make both new, follow-on, or generic biotech drugs. Some generic biologic drugs have been in Europe but have for the most part absent to outlawed in the U.S. Generally speaking, these have longer patent exclusivity and in many cases are allowed to exist without competition.
This issue is not just one of humane aspects. It also has political aspects that could come full circle in the coming months. With a new administration and a new regime, it is unknown just how much competition these biotech operators will have. They have well over a decade of established case law in their favor, so any changes may require legal maneuvering on top of just the regular lobbying efforts.
But, back to Merck. Its BioVentures unit is supposed to utilize new science to speed up drug development. Merck acquired a technology called glycoengineering to more rapidly create antibodies and proteins for drugs in yeast rather than the traditional mammal cells used by many other companies.
What is interesting is that Merck said the unit will build a commercial factory by 2012 and will invest some $1.5 billion in research by 2015. The unit’s goal is to launch six or more generic biotech drugs between 2012 through 2017. The company’s dates are somewhat targeted at patent expiration dates for several big biotech drugs.
Merck has a market cap of roughly $56 billion and is expected to have somewhere around $24 billion in 2009 sales according to research estimates. Below are the major biotech players whose market capitalization rates are greater than $10 billion. We have also included the Thomson Reuters (First Call) estimate (rounded down) for the next fiscal year (2009). Here is that list:
COMPANY (TICKER) Mkt Cap 2009R~
Genentech (NYSE: DNA) $81.6 B $14.4 B
Amgen Inc. (NASDAQ: AMGN) $61.6 B $15.4 B
Gilead Sciences, Inc. (NASDAQ: GILD) $43.0 B $6.3 B
Celgene Corporation (NASDAQ: CELG) $24.1 B $2.9 B
Genzyme Corporation (NASDAQ: GENZ) $17.3 B $5.2 B
Biogen Idec Inc (NASDAQ: BIIB) $14.1 B $4.4 B
Merck may be able to pull a rabbit out of the hat at the magic show. And it might not. The company is slashing and burning right now as it gears for a slower and more competitive 2009. Dr. Reddys (NYSE: RDY) has been able to make some biotech copies and many AIDS drug patents have just been outright stolen or broken in some countries. This is an argument over “patent law” and “intellectual property” versus what is humane or what many consider as a God-given right under the humanitarian front. Regardless of any personal positions in that argument, there are many who argue that generic biotech drugs will by and large be failures and far less effective than their base-biotech.
Wall Street gave it a thumbs-down vote. Shares closed down about 2% today with a weak market. Having big blockbuster plans is one thing, but he time frame seems to be a reach based upon the cuts it has been making. This sales pitch also requires a bit more meat to it.
If Merck wants to be the biotech leapfrog shop, it might have to go do it the old fashioned way. It might have to acquire companies. It has before.
Jon C. Ogg
December 9, 2008
Market Defying Stock: Cubist Pharmaceuticals (CBST)
Many investors have looked to biotech stocks as growth plays during strong markets and as defensive plays for a coming administration change. But the stock market has been so uncooperative that many investors have lost heart (and real money). So when we scan over the list of highs and lows, it is rather interesting when a company like Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is doing so well while others are not.
Cubist is one of the super-bug fighters and its main product is Cubicin. Cubist is a biopharmaceutical company focused on R&D and commercialization of products that address unmet medical needs in the acute care environment. Below are some basic details followed by some investor metrics outlining its prospects:
Is Allergan Worth More or Less After J&J Buys Mentor? (MNT, JNJ, AGN)
You have probably heard about the acquisition where Johnson & Johnson (NYSE: JNJ) is acquiring Mentor Corp. (NYSE: MNT). Frankly, now that we took a look this deal is not at all that surprising and we are not that surprised that the $31.00 is nearly a 100% premium to Friday’s price of Mentor. But what is surprising is that the merger is putting severe pressure today on Allergan Inc. (NYSE: AGN).
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What Lies Ahead in Biotech Mergers & Buyouts?
We have been digging around and around for days and weeks in the biotech sector. Our goal is to determine which merger candidates can occur and to gather an opinion of the M&A outlook for 2009. This is not going to be easy because of the bear market and because financing is now elusive.
The Genentech (NYSE: DNA) buyout by Roche has long been under question. First the speculation was that it would have to come at an increased buyout price above the $79 offer. Now there are just questions about the merger in its entirety. because of the Dollar strength, the cost for Roche is now much higher in local currency terms.
Mike Huckman of CNBC just today gave a report showing many mergers and noting that companies like Schering Plough (NYSE: SGP) has called biotech cheap and compelling.
Huckman also outlined the Dendreon (NASDAQ: DNDN) event for 2009, but without a prediction on which way PROVENGE’s binary event would work out. We also believe that Dendreon will be acquired IF the FDA allows PROVENGE to go on the market.
The M&A front has totally skipped and forgotten Amylin Pharmaceuticals (NASDAQ: AMLN). 2009 is likely going to be the make or break year.
Whether you like Obama and the new administration or not, one key sector which has been getting speculative investments after a near-decade hiatus is stem cell stocks. These are very speculative, even for biotech stocks. But they also hold the potential answers to many regenerative cures against diseases such as Alzheimer’s and more.
The one issue that will affect mergers in 2009 is an easy one to overlook because it is not scientific at all. CURRENCIES…….. If the US Dollar stays strong, these smaller $500 million to $2 billion biotech companies no longer are dirt cheap to Japanese or European acquirers.
Jon C. Ogg
December 1, 2008
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