Genentech's No-Win Merger Situation (DNA)
Genentech (NYSE: DNA) was delivered the worst, or at least the second worst, bit of news it could have received. Late this week Roche delivered a crushing blow by lowering the offered acquisition price. This puts Genentech in a nearly untenable situation.
Roche already owns 55.8% of the Genentech outstanding shares and intends to commence a cash tender offer for all outstanding publicly-held shares to commence within approximately two weeks. Roche also intends to make the tender conditional upon a non-waivable condition that holders of at least a majority of the outstanding publicly-held Genentech shares tender their shares in the offer, that Roche can obtained sufficient financing, and other issues.
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Carl Icahn Picking Up Activities in Biotech
Now that Carl Icahn was able to score his big coup in shares of Imclone Systems, it is of little surprise that he is out rattling the cages at other biotech holdings. He has long been a holder and investor in this sector, but he has just over the last week or so increased his holdings in some biotech stocks.
One hike was in Enzon POharmaceuticals (NASDAQ: ENZN), where he took his stake to 7.3% from 6.93%. The company has nominated an Icahn affiliate for election to the board of directors.
Amylin Pharmaceuticals (NASDAQ: AMLN) also is reviewing a 13D filing as Carl Icahn is appointing 5 members to its board of directors. His stake went from 7.3% to 8.3%.
Cadus Corp. (NASDAQ-OTCBB: KDUS is one small stock where Icahn is involved and he just marginally increased his stake (very marginally) to 4.966+ million shares.
We have a full list of his biotech holdings from last year. We suspect Mr. Icahn has been active in others or is about to be.
Jon C. Ogg
January 29, 2009
CV Therapeutics May Get Higher Merger Price (CVTX)
CV Therapeutics, Inc. (NASDAQ: CVTX) has just become the “next in line to be acquired” in the land of drug and biotech mergers. Astellas, a partner of the company, has been trying to acquire the company since last year and is now taking the fight to shareholders.
Astellas Pharma Inc. submitted a $16.00 buyout offer to CV’s board of directors. FULL FINANCIAL DETAILS HERE at 247WallSt.com.
Below is the full letter sent to CV Therapeutics by Astellas:
Are Geron & Stem Cell Stocks The Biotech Winners of 2009? (GERN, STEM, OSIR, GENZ, ASTM, NBS, KOOL, OPXA)
Yesterday we saw a rally in stem cell players of Geron Corp. (NASDAQ: GERN) and StemCells Inc. (NASDAQ: STEM). These are both winners that are currently in a winning sector, assuming that Obama administration opens the stem cell floodgates that have been dammed up for the last eight years.
Last month StemCells (STEM) won FDA approval for clinical trials. Today we have Geron (GERN) leading the sector on FDA approval for starting trials for embryonic stem cell studies on spinal cord injuries.
Geron (GERN) is up huge today. Shares are up 35% at $7.10, a new 52-week and a high back to levels not seen since 2007. Geron closed out 2008 at $4.67, so this is now up 50% for 2009.
StemCells (STEM) is also following suit with its shares up almost 14% at $2.45. This stock closed out 2008 at $1.36. That makes a gain of 75% or so for 2009 so far.
Osiris Therapeutics (NASDAQ: OSIR) entered into a pact in recent months with Genzyme (NASDAQ: GENZ) to develop and commercialize first-in-class adult stem cell products. Osiris is up a mere 1.5% today at $19.13. That is about flat compared to its 2008 close-out of $19.16.
But there is play in the speculative names in the sector as well. Technically, all of these are speculative stocks in the stem cell sector. But here are some of the “even more speculative names” in stem cells:
Aastrom Biosciences, Inc. (ASTM) up 21% at $0.62, up from a 2008 close-out price of $0.50.
Neostem, Inc. (NBS) is up 26% at $0.95 today, up from $0.47 as a 2008 close-out stock price.
Thermogenesis Corp. (KOOL) is often overlooked as a stem cell stock. But this one is up over 8% at $0.59 today. It closed out 2008 at $0.43.
Opexa Therapeutics, Inc. (OPXA) is also one of the more speculative names, and its stock is up over 20% at $0.43 today. It is hard to get excited about penny stocks for most skep[tics, but this stock is currently now up more than 100% from the $0.19 stock price where it closed in 2008.
There are other stocks in teh sector, but these are the main ones we follow in thr group. We rarely include pink sheet and OTC stocks.
Jon C. Ogg
January 23, 2009
Avastin's Next Target: Colon Cancer (DNA)
Genentech Inc. (NYSE: DNA) has released some new data in an SEC Filing showing that it is still on the path to getting colon cancer indications for treatments. The company said that it may find out the final results of the Avastin adjuvant colon cancer trial as soon as mid-April (2009). It received updated data to the timelines for the colon cancer trial from the National Surgical Adjuvant Breast and Bowel Project (also called the NSABP). It is hard to know the intricacies here since the timing and availability of data depends on the timing of disease progression events.
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Trader Take on Dendreon Ahead (DNDN, LLY)
Dendreon Corp. (NASDAQ: DNDN) is so far having very little movement from its presentation at the JPMorgan healthcare conference in San Francisco. We saw a CNBC interview earlier this week that gave us hope for some more additional data on its PROVENGE trial for prostate cancer.
The company said today that it now expects to report additional data over the PROVENGE trial by April. We have our own thoughts on how traders and investors can use that date to their advantage.
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Full Earnings Season Expectations for Big Pharma (LLY, JNJ, MRK, PFE, WYE)
There is a fairly large expectation that drug companies will be one of the safer earnings plays in 2009. That will either be confirmed or will get thrown out the window as the drug giants report earnings over the next couple of weeks. We have giants such as Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), Merck & Co. (NYSE: MRK), Pfizer Inc. (NYSE: PFE) and Wyeth (NYSE: WYE) all coming out with earnings. We have compiled consensus estimates from Thomson Reuters (First Call) and given some of the pending issues and other developments inside each of these Big Pharma drug companies.
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Full Earnings Season Expectations for Big Pharma (LLY, JNJ, MRK, PFE, WYE)
There is a fairly large expectation that drug companies will be one of the safer earnings plays in 2009. That will either be confirmed or will get thrown out the window as the drug giants report earnings over the next couple of weeks. We have giants such as Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), Merck & Co. (NYSE: MRK), Pfizer Inc. (NYSE: PFE) and Wyeth (NYSE: WYE) all coming out with earnings. We have compiled consensus estimates from Thomson Reuters (First Call) and given some of the pending issues and other developments inside each of these Big Pharma drug companies.
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When Great Obesity Study Results May Not Be Enough (OREX)
Orexigen Therapeutics, Inc. (NASDAQ: OREX) is moving in after-hours trading. The company has just announced that its first of four Phase III trials of its lead investigational product Contrave met its co-primary and key secondary endpoints. Be advised that there are questions about how this really fits in with the “targets” and the stock is indicated lower after the results.
This showed a significant reduction in body weight, improvements in markers of cardiovascular risk and reductions in selected food craving measures. If you can believe it, the result was a loss of about 20 to 25 pounds. This was with an exercise regimen and did include counselling, but generally speaking many who need to lose that much do better with ongoing reviews.
Here is the full release from the company.
Jon C. Ogg
January 8, 2009
More Evidence Big Pharma Ready To Acquire Biotechs (MRK, PFE, WYE, GILD, BMY, LLY, SGP, CELG, GENZ, BIIB)
We have covered on numerous occasions about how the larger Big Pharma companies either need to or have signaled an openness to making acquisitions in the biotech sector or in the smaller drug companies. Today it was Merck & Co. (NYSE: MRK) out speaking and testing the waters to see how Wall Street would react if it decides to go make a decent buyout. The company said at a Goldman Sachs investor conference in New York that it has the resources to make to significant acquisitions.
Merck’s $62 billion market cap does not allow the company to go after ANY deal it chooses. Here were the estimated sizes of the drugs and biotech players we noted earlier this week when Pfizer was out testing the waters. Actually, these are the ones with market caps that are far enough under that of Merck:
Stock (Ticker) MktCap
Wyeth (WYE) $51.1B
Gilead Sciences Inc. (GILD) $47.5B
Bristol-Myers Squibb Co. (BMY) $47.3B
Eli Lilly & Co. (LLY) $46.1B
Schering-Plough Corp. (SGP) $28.2B
Celgene Corporation (CELG) $25.9B
Genzyme Corp. (GENZ) $18.4B
Biogen Idec Inc. (BIIB) $14.1B
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