Did SEQUENOM Commit Corporate & Investor Suicide? (SQNM)
SEQUENOM, Inc. (NASDAQ: SQNM) looks like the newest implosion of a hopeful company that was supposed to have the Holy Grail for detection of Downs Syndrome. After yesterday’s close the company announced that its expected launch of its SEQureDx™ Down syndrome test was delayed. This stock had more than 30% of its float listed in the short interest, and the news is so bad that you now know why.
We do not want to make accusations here over fraud, but it is very hard not to under the circumstances. Whether or not fraud is the issue, the company has done much worse than merely damage its credibility. The reason was explained as being “due to the discovery by company officials of employee mishandling of R&D test data and results. Accordingly the company is no longer relying on the previously announced R&D test data and results.” This is essentially the kiss of death for any speculative or emerging company in the Bio-space.
The company claimed that it has not changed plans to develop in parallel its RNA- and DNA-based methods for the Down syndrome test, and it said that it will “endeavor to have a validated test in the fourth quarter of 2009.” It now intends to launch the Down syndrome test upon publication in a peer-reviewed journal of the results from the on-going large, independent clinical studies.
SEQUENOM’s board of directors has formed a special committee of independent directors to oversee an independent investigation of the employees’ activity related to the test data and results; and the committee engaged independent counsel to assist the committee in the conduct of the investigation.
Although the company is not aware of any potentially inappropriate activity related to the reported results of its other tests under development, the company is currently reviewing the data for all tests. As a result of this ongoing review the Rhesus D, Cystic Fibrosis and Fetalxy tests are now anticipated to begin launching in the third quarter of this year. Unfortunately, this throws questions endlessly and is a total game and sentiment changing development.
The explanation here is odd, or maybe more than odd. The company said it “believes that its Down syndrome program has suffered a temporary setback but that the SEQureDx technology is scientifically and technically sound… and believes that it has the financial resources to commercialize its test for Down syndrome and other prenatal disorders.”
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Speculative Flu Stocks Started Giving Gains Back (NVAX, GNBT, BCRX, PURE, VICL, VIVO, AVII)
This week there have been many crazy stock gains among the speculative biotech sector, and these were tied directly to the ’speculative stocks’ that could have any ties in reality, fiction, and even imagination to a cure or hope in the fight against Swine Flu.
As you will see below, Novavax, Inc. (NASDAQ: NVAX), Generex Biotechnology Corp. (NASDAQ: GNBT), BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX), Pure Bioscience (NASDAQ: PURE), Vical Inc (NASDAQ: VICL), Meridian Bioscience Inc. (NASDAQ: VIVO), and AVI BioPharma Inc. (NASDAQ: AVII) have all begun their overbought roll-over.
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Analysts Pile Upgrades On Dendreon (DNDN)
Dendreon Corp. (NASDAQ: DNDN) has already been all over the news with its positive PROVENGE data, but so far we have seen three analyst upgrades from the full reports this morning at 24/7 Wall Street. We also saw a Buy rating ‘reierated’ and all of this follows upgrades from earlier this month.
In pre-market trading, this one has just traded above the $28.00 level for the first time after it peaked at $25.00 before the halt yesterday and the pre-halt share price tank right before that. As of 9:19 AM EST we have seen almost 4.2 million shares trade hands and the last print was $28.13.
JON C. OGG
Dendreon Saga Continues (DNDN)
Dendreon Corporation (NASDAQ: DNDN) was halted today at 13:27:02 ahead of the data embargo due at 2:00 PM EST. The data for its key Phase III IMPACT study for PROVENGE as a last line of defense in advanced prostate cancer patients is out. The company said that the median survival rate was extended by 4.1 months to 25.8 months, and the drug increased the 3-year survival rates by 38% compared to the placebo. The company also reported that there was a 22.5% reduction in the risk of death (31.7% versus 23.0%), which is above that 22% hurdle that the company has said would be required for an FDA approval. It also exhibited a favorable safety profile and represents the first active cellular immunotherapy for cancer to prolong survival by using the bodies own immune system against cancer.
Full study results are here, and the conference call will take place at 5:30 PM EST (4:30 PM Central Time).
After the pre-halt trading saw a rapid 45% drop and without knowing if NASDAQ is honoring trades around the halt time, there is a high chance that this stock’s volatility is going to be present for some time.
Swine Flu Speculation Stocks (GILD, BCRX, NVAX, GNBT, VICL, AVII, CRXL, RHHBY, GSK)
Monday is looking like a SWINE FLU speculative flu stock stock bonanza. The two approved drug treatments, not vaccines, which are being released are Tamiflu made by Roche (OTC: RHHBY) and Relenza made by GlaxoSmithkline (NYSE: GSK). Gilead Sciences, Inc. (GILD) gets royalties from Roche for Tamiflu, and its shares are indicated north of $48.00 after a $45.80 close on Friday.
There is a second-tier level of stocks here: BioCryst Pharmaceuticals Inc. (BCRX) was up big Friday as it is a maker of drugs that block key enzymes in viral diseases like the flu, shares are indicated over $3.00 after a $2.21 close on Friday. Novavax, Inc. (NVAX) is another clinical stage company using its virus-like particle platform technology for flu treatments; stock is indicated north of $2.50 after closing up some 75% at $1.42 Friday.
And here is the third-tier of these stocks: Generex Biotechnology Corp. (GNBT) is being passed around as a penny stock flu player with shares indicated around $0.40 after closing up 25% at almost $0.34 Friday. Vical Inc. (VICL) closed up 3% Friday at $2.53 and shares are indicated up around $3.00. AVI Biopharma, Inc. (AVII) rose over 20% to $0.89 Friday and shares are indicated up marginally as a result. Crucell NV (CRXL) has a faster way of making flu vaccines. This closed up 1% on Friday and is hardly moving.
As a reminder, these huge gap ups generally have a one day to multi-day move with each move usually being less than the first. As with issues such as SARS and bird flu, the world did not end and it was only the SARS scare which actually caused real damage. You can probably bet that you will be hearing “squeal like a pig!” jokes.
JON C. OGG
Swine Flu Treatment Stockpiles Released by CDC/DHS (RHHBY, GSK)
With the swine flu epidemic from Mexico spreading to the U.S. (and maybe beyond), a new media advisory is confirming that the drugs Tamiflu by Roche (OTC: RHHBY) and Relenza by GlaxoSmithkline (NYSE: GSK) are being released to combat the swine flu. No exact numbers were mentioned of how many of each of the doses in the total stockpile of 50 million doses, but Homeland Security Secretary Janet Napolitano said in a White House briefing that the government is releasing 25% of the 50 million total stockpiled doses to treat the outbreak.
The cases in each state were listed at 12:45 EST as follows: California has 7 cases, Kansas has 2 cases, New York City has 8 cases, Ohio has 1 reported case, and Texas has 2 reported cases. These numbers are from earlier and obviously if this is any epidemic or is much more widespread then those numbers will grow. This is on the heels of some 1,300 suspected cases in Mexico and even New Zealand has said it is “likely” that 10 students who were recently in Mexico have swine flu.
JON C. OGG
Trials Continue on Asbestos & Mesothelioma, As Death Rates Rising (SNY, LLY)
There is some startling news on the war against asbestos and mesothelioma. The rate of deaths measured from mesothelioma has risen rather than come down. A report said there were some 18,068 deaths from malignant mesothelioma between 1999 and 2005. The number of mesothelioma deaths per year climbed from 2482 to 2704, which translates to a rise of nearly 9%. There is an interesting quick read over at Reuters Health, but unfortunately the news on the topic is rather bleak.
A news report from March 30, 2009 also noted that researchers have some hope that oxaliplatin and gemcitabine will increase the survival rates. Oxaliplatin is marketed by Sanofi-Aventis (NYSE: SNY) and Gemcitabine is marketed as Gemzar by Eli Lilly and Company (NYSE: LLY). A new study involves chemotherapy, which will last for six months and will include 29 patients. Upon completion of Phase II of the clinical trial, the Phase III study is expected to begin in 2010 or 2011.
Asbestos has been an official enemy of the state for about 40 years now and it is still being removed from structures and products today. Many of the mesothelioma cases are not diagnosed for 40 years, so it sounds like we are going to be stuck with this problem for well over another generation. That is just in the U.S. Much of the asbestos has not been removed at all once you go to facilities outside of North America.
JON C. OGG
Amgen Goes Very Dull… Dealtime Needed (AMGN)
We posted the full earnings analysis of Amgen Inc. (NASDAQ: AMGN), but one thing is becoming very clear at the biotech giant. This is a really just a troubled drug company that masquerades as a biotech stock. We have not said this for some time, but it is becoming even more true than when this was a common chant. It is not growing its top-line, and the company just projected a decrease in 2009 revenues. See full details at 24/7 Wall Street.
Before you accuse me of being too hard on them, there is some good news. It has right at $10 billion in cash and it now trades with a forward P/E ratio of right about 10-times earnings. Drug companies can trade with no growth right now, but investors want to see more from biotech companies. We can’t be more firm on this notion: AMGEN NEEDS TO MAKE A GAME-CHANGING ACQUISITION.
That deal from almost two-years ago was too much of the same. It is time to diversify. It is time for a ‘wow’ factor.
Sometimes saying less is better than saying more. That’s it.
JON C. OGG
Medical Marijuana For Staph & Other Ailments (GFON)
It is hard to imagine that there are now two medical-related marijuana companies that are public stocks. But that is the new world for you. Cannabis Science, Inc. (OTCBB: GFON) has a report on the current state of research into the use of natural plant cannabinoids to reduce the spread of drug-resistant bacteria, including methicillin-resistant Staphyloccus aureus (MRSA), and the prospects for development of topical whole-cannabis treatments.
The company noted a Journal of the American Medical Association and a Center for Disease Control in 2007 report, showing that MRSA is responsible for more than 18,500 hospital-stay related deaths each year, and increased direct healthcare costs of as much as $9.7 billion.
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Does Roche Regret Its Higher Genentech Price?
Investors may miss having Genentech as a stock to invest in now that Roche has acquired the rest of the minority interest in the Avastin maker. But Roche may have just been dealt a blow that might make it wish that it had kept the Genentech investment simply as a stake rather than as a unit.
Roche’s stock fell by as much as 10% in Switzerland after an announcement that Avastin failed to meet the primary endpoint in a highly-anticipated Phase III trial. The trial tested whether Avastin combined with chemotherapy prevented the return of tumors in early-stage cancer patients who had already had surgical tumor removal.
A successful endpoint could have brought on billions of dollars worth of more in sales for Avastin. Genentech maintains that the initial review of data keeps the believe that Avastin may be active in patients with early-stage colon cancer. The company is going to continue studying Avastin as an adjuvant for early-stage colon, breast and lung cancers.
Roche initially offered $86.50 per share for the interest it did not own, and ultimately paid $95.00 per share. It seems as though the $46.8 billion buyout would have been a much better deal had this endpoint been met and it would seem now that the Swiss drug giant could have acquired the company for a lower price had it waited. There will be more tests find out if Avastin works for early-stage cancers, and it does work well with multiple cancers.
JON C. OGG
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