More News In Stem Cells (BTIM, GERN, KOOL)
It looks like today was an active day on the stem cells front in the land of biotechs and biohealth companies. We had an announcement from BioTime, Inc., (OTCBB:BTIM), earnings from Geron Corporation (Nasdaq: GERN), and an FDA resolution from ThermoGenesis Corp. (Nasdaq: KOOL).
BioTime, Inc., (OTCBB:BTIM) issued a press release noting that its wholly-owned subsidiary Embryome Sciences, Inc. entered into an agreement with Reproductive Genetics Institute of Chicago. This grants Embryome Sciences the rights to market new human embryonic stem cell lines selected by Embryome Sciences from 294 hES lines derived by RGI. Embryome Sciences will initially select 10 RGI hES cell lines, and may add additional cell lines at its option.
Geron Corporation (Nasdaq: GERN) reported earnings today, or at least losses. This sector is going to be the beneficiary of many privileges and developments now that stem cell research is normalizing again under the Obama stem cell policy. The company posted a loss of $17.6 million or $(0.22), wider than the $16.5 million loss for the comparable 2007 period. For its fiscal 2008, the company lost $62.0 million, compared to $45.8 million for the comparable 2007 period. These results of the fiscal 2007 period include an unrealized gain of $15.5 million related to changes and a non-cash expense of $9.1 million. In the fourth quarter of 2008, the company had revenues of $544,000, compared to $4.7 million for the comparable 2007 period. For fiscal 2008, the company had revenues of $2.8 million, compared to $7.6 million for the comparable 2007 period.
ThermoGenesis Corp. (Nasdaq: KOOL) said that the FDA has agreed with its plan to remedy the voluntary recall of certain lots of AXP disposable bagsets that it announced in November. The company is a supplier of innovative products and services that process and store adult stem cells.
Jon C. Ogg
February 26, 2009
Biotech and Drug M&A Watch: Genzyme (GENZ)
Genzyme Corp. (NASDAQ: GENZ) is one of the most prized biotechs out there. Its near-$19 billion market cap speaks for itself. Its $69.90 share price even signals some safety in a crazy stock market, even if it is down from a high of $83.97 over the last year. And to prove it, the company has signaled that it is ready to make some acquisitions.
Yesterday, Genzyme’s CEO, Henri Termeer, said that the company is ready to spend about $600 million this year to acquire new products for chronic diseases. It looks like the specific arena here here will be in personalized drugs and highly specialized medicines, and ones where the value is easy to explain. While this is M&A, it does not sound as though the company is going to be acquiring companies. It sounds more like Genzyme plans to acquire drugs which are already in clinical trials and/or individual programs rather than whole companies.
Genzyme by our count is the world’s largest developer of rare disease treatments. Termeer also said that the company will be part of the group of acquirers rather than being one of the biotech companies which will be acquired. We think that acquiring Genzyme either just became a much harder proposition, or at least it would cost far more money now to consider it.
There is some additional information at the Boston Globe from yesterday.
JON OGG
Medtronic Keeps Buying Companies (MDT)
It seems that M&A continues in the drug and medical equipment markets continues regardless of what is happening throughout the world. Medtronic Inc. (NYSE: MDT) has entered into two separate M&A deals for Venture-backed companies. Normally we would not care, but these were worth a combined total of more than $1 billion.
The first deal was for CoreValve, a maker of medical devices for percutaneous heart valve replacement. This includes a $700 million up-front payment. It could be worth more as it also includes the possibility of milestone-based earnouts. CoreValve was backed by Apax Partners, HealthCap, Maverick Capital and Sofinnova Partners.
Medtronic’s second deal was the acquisition of Ventor Technologies Ltd.. Ventor is an Israeli developer and maker of transcatheter heart valve technologies used to treat aortic valve disease. This deal was valued at $325 million. Medtronic was an original investor in the company already, along with Pitango Venture Capital.
Jon C. Ogg
February 24, 2009
Genentech Still Wants More From Roche (DNA)
This may or may not be a surprise to the investment community. Genentech, Inc. (NYSE:DNA) has announced that its special committee of the company’s Board of Directors decided to unanimously recommended that shareholders reject the Roche tender offer.
The company said that the cash tender offer of $86.50 per share is inadequate and not in the best interests of stockholders. The special committee cited a thorough review with its independent financial and legal advisors.
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Generic Makers Looking For Acquisitions (TEVA, WPI)
At today’s Generic Pharmaceutical Association’s Silver Anniversary Meeting, there was an interesting take. It is not just that generics are only one-sixth of drug sales, and it wasn’t that the generic drug makers are actually defensive stocks because they are probably the last area where spending cuts will occur. What is most interesting is that it sure sounds like the big generic drug makers still want to be acquirers in this current climate.
In separate CNBC interviews with Mike Huckman, The CEOs of both Teva Pharmaceutical (NASDAQ: TEVA) and Watson Pharmaceuticals Inc. (NYSE: WPI) did more than hint that they wanted to do more deals. Both companies formally said they wanted to be acquirers in the current climate.
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Biogen, Earnings & Buyouts…
We prepared a full earnings preview for Biogen Idec (NASDAQ: BIIB) over at 24/7 Wall St. The company responsible for Tysabri reports earnings on Friday morning. Our main question here with so many larger drug and biotech players looking to do deals is whether or not Biogen Idec can land itself a buyer…. or if it will decide to go do a deal of its own.
Other companies noted are Pfizer (NYSE: PFE), Wyeth (NYSE: WYE), Genentech (NYSE: DNA), Glaxo SmithKline (NYSE: GSK), Sanofi-Aventis (NYSE: SNY), Amgen (NASDAQ: AMGN), Celgene Corporation (NASDAQ: CELG), Gilead Sciences (NASDAQ: GILD), Genzyme Corp. (NASDAQ: GENZ), and Elan Corp. plc (NYSE: ELN).
JON OGG
February 5, 2009
FDA Goes After Hereditary Angioedema (DYAX)
Dyax Corp. (NASDAQ:DYAX) announced after the close that the FDA’s Pulmonary-Allergy Advisory Committee voted in favor of approval of DX-88 for the treatment of acute attacks of hereditary angioedema. But the “recommendation” here looks lighter than some might have been hoping fore. The vote breakdown was 6 yes votes, 5 no votes, and 2 abstentions.
If approved, Dyax said this will be the first drug available in the U.S. for treating acute attacks of HAE and the first subcutaneously administered HAE therapy.
HAE is a rare, potentially fatal genetic disorder characterized by spontaneous episodes of severe, debilitating and often painful swelling. The Committee’s findings will be weighed by the FDA in determining whether DX-88 is to be approved for marketing.
Jon C. Ogg
February 4, 2009
Cancer Drug Combination Halting Lung Cancer Progression (DNA, OSIP)
Genentech (NYSE: DNA) and Roche may still be in what is becoming a bitter merger, but it seems that Genentech’s Avastin continues to show promise in new cancer targets. The company released a study on Monday after the close along with OSI Pharmacuticals (NASDAQ: OSIP) showing that cancer drugs Avastin and Tarceva mixed together halted the progress of non-small cell lung cancer. This showed a significant improvement than taking Avastin alone.
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King Restructuring Targets Salesforce (KG)
King Pharmaceuticals (NYSE: KG) is involved in a corporate restructuring pacy which will only sound all too familiar if you are a drug worker in the U.S. The company’s restructuring will result in workforce reductions to decrease operating expenses after King’s recent acquisition of Alpharma.
The result is expected to be a total workforce reduction of 22% or 760 positions.
About 520 of the 760 layoffs are listed as part of the new restructuring program and will affect sales positions to avoid overlaps and excessive coverage. About 380 of the cuts are field sales positions and about 140 are being listed as corporate and support positions.
King expects that it will incur a $50 to $55 million charge for the restructuring plan. More pink slips headed this way.
Jon C. Ogg
February 3, 2009
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