Two key Analyst Call in BioHealth Space (DNDN, HGSI)
We have seen two very key biotech analyst calls this morning, and shares of both are responding. Dendreon Corp. (NASDAQ: DNDN) and Human Genome Sciences (NASDAQ: HGSI) were both given positive brokerage initiations this morning.
Dendreon Corp. (NASDAQ: DNDN) is seeing gains this morning after the stock was started as “Overweight” and $46 target at JPMorgan. The call is based upon a belief that PROVENGE will be approved for advanced prostate cancer. This is actually not the highest price target as a $50 target does already exist, but this implies a 42% upside to the target price versus the $32.36 closing bell price on Friday. Shares are up 2.6% before the open on this call.
Human Genome Sciences (NASDAQ: HGSI) was resumed at “Buy” with a $35 price target at BofA/Merrill Lynch. The belief here is that its Lupus drug BENLYSTA will be approved and a focus on its other franchises with more room for upside. The $35 price target implies upside of about 18.6% to Friday’s closing price of $29.47. The 52-week trading range was $0.45 to $32.07. Shares are only indicated up so 0.5% this morning before the open.
JON C. OGG
Buyout Rumors Resurface in Biotech, Maybe (DNDN, MYGN)
Sometimes it is the action seen in stock options gets traders moving more than the action in the stock. With more commentators on CNBC and other media outlets talking about ‘elevated options trading seen in…’ it gets even more on alert. From our best read today, that seems to be the case in Dendreon Corp. (NASDAQ: DNDN) and Myriad Genetics Inc. (NASDAQ: MYGN). There has been talk of ‘buyout rumors’ but we would first and foremost stress ‘caveat emptor’ when it comes to this.
Dendreon shares are up only 1.4% before the closing bell at $32.46 and not even on any crazy volume. But there was a new high today of $32.62. So far we have seen more than 18,000 CALLS and more than 6,000 PUTS trade today… but again, expiration may be part of the issue here.
Myriad Genetics saw more than 3,000 CALLS trade, but 1,100 of those were in the MARCH 2010 $24.00 CALLS, almost $2.00 above today’s share price. Myriad was up over 3% late in the day at $22.30, but its 52-week trading range is $20.62 to $47.08 and it traded about 150% of normal trading volume.
These ‘buyout rumors’ get tossed around far too liberally. Today was options expiration date and lots of the ‘unusual activity’ is frequently nothing more than expiration roll-outs in the last few trading days of each month when options are expiring. We’d also note that if there were genuine rumors of substance rather than of hope then you would be seeing much more than just a few thousand options contracts and more than 100% or 150% of normal volume.
Anything is possible, particularly in biotech. But for traders to really be honing in on buyouts, there is generally far more interest than this.
Earnings is getting tiring and the world is tired of it…. That being said i am going to do an early preview and have it ONLY focused on the big retail names so that it is targeted. That is the bulk of the earnings of big companies next week anyhow.
JON C. OGG
Top 2010 Established Biotech Stock Picks for Upside (MNKD, THRX, DNDN, INCY, ILMN, ALNY, GILD, SVNT, AMGN, ONXX, PDLI, OSIP, CELG)
BioHealthInvestor.com wanted to put together a list of key biotech and BioHealth-related stocks that had the most upside for 2010 according to consensus analyst price targets. This is of course no exact science for many reasons, but getting a lot of consensus price targets together is often a sign of at least where to start when looking for upward price targets in stocks. And we all know that BioHealth and biotech stocks often offer the upside of the century as these companies all hold a bit of your own personal lottery ticket in all of their share prices.
After taking a look at our normal universe of biotech and biohealth related stocks. it was obvious that MannKind Corp. (NASDAQ: MNKD) still has the most upside from the consensus price targets IF it is hit. Then in order of expected share price appreciation comes Theravance Inc. (NASDAQ: THRX), Dendreon Corp. (NASDAQ: DNDN), Incyte Corporation (NASDAQ: INCY), and then came Illumina Inc. (NASDAQ: ILMN), Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY), and Gilead Sciences Inc. (NASDAQ: GILD).
The stocks above all had upside of over 25%. The other stocks here are the ‘lower rung’ of upside expectations but are all still offering over 20% upside to the consensus analyst price targets (again IF they are hit). Of the 13 stocks with markets caps of $750 million (or almost $750 million) which we cover, these still had upside of over 20% except a few: Savient Pharmaceuticals, Inc. (NASDAQ: SVNT), Amgen Inc. (NASDAQ: AMGN), Onyx Pharmaceuticals Inc. (NASDAQ: ONXX), PDL BioPharma, Inc. (NASDAQ: PDLI), OSI Pharmaceuticals Inc. (NASDAQ: OSIP), and Celgene Corporation (NASDAQ: CELG).
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Quest For 10-Baggers in BioHealth in 2010 (JAZZ, TRGT, VNDA, DNDN, HGSI, CGEN, BNVI, QCOR, ACHN, PSDV, ATHX, SNSS, AVNR, BIOD, ALXA, CTIC)
If one thing was noticed in biotech stocks, or BioHealth stocks as we often say, it was that investors, traders, and speculators all piled into the chase for the next ten-bagger late in the year. When you have as many biotech and BioHealth stocks that ran over 1,000% in 2009 that is only to be expected…. hence the 10-bagger comments. We had many biotech and biohealth shares rally from their lows significantly this year, with companies such as Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ), Targacept, Inc. (NASDAQ: TRGT), Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA), Dendreon Corp. (NASDAQ: DNDN), and Human Genome Sciences, Inc. (NASDAQ: HGSI) all being in or having been in the 10-bagger club this year.
But late in 2009 we started seeing an onslaught of low-priced stocks with small cap or micro-cap values running rapidly higher on news. In some cases these faded, and in some not. We saw the traders run up shares of Compugen Ltd. (NASDAQ: CGEN), Bionovo, Inc. (NASDAQ: BNVI), Questcor Pharmaceuticals, Inc. (NASDAQ: QCOR), Achillion Pharmaceuticals, Inc. (NASDAQ: ACHN), pSivida Corp. (NASDAQ: PSDV), Athersys, Inc. (NASDAQ: ATHX), Sunesis Pharmaceuticals, Inc. (NASDAQ: SNSS), and AVANIR Pharmaceuticals, Inc. (NASDAQ: AVNR) on news late in 2009. Also covered as potentials for this are Biodel Inc. (NASDAQ: BIOD), Alexza Pharmaceuticals, Inc. (NASDAQ: ALXA), and Cell Therapeutics, Inc. (NASDAQ: CTIC).
We have reviewed each of these and given a synopsis for each to see if these could be the 10-baggers for 2010.
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Dendreon Files To Raise Capital (DNDN)
Dendreon Corp. (NASDAQ: DNDN) has just filed an automatic shelf registration statement with the SEC. This will allow the company to raise capital, although no terms nor dollar amounts were listed initially (see below). As with most initial shelf registration of this sort, no underwriters were named as well (see update below).
- Update: After 5:0 PM EST Dendreon disclosed that it was going to sell 15 Million shares via lead underwriters JPMorgan Securities and Deutsche Bank Securities.
The net proceeds from the sale of common stock under this prospectus are earmarked to fund Dendreon’s commercialization activities for Provenge, including the investment in new facilities for the expansion of manufacturing capabilities, investment in sourcing of components for Provenge, the hiring of additional personnel and investment in specialized technology systems. Also noted as a use of funds is funding additional clinical trials for Provenge and for Dendreon’s other product candidates.
The use of funds is one that goes on as well. The company will fund other research and preclinical development activities for active immunotherapies, monoclonal antibodies and small molecule products. It can also satisfy third party obligations, and can use funds for general corporate purposes.
OUTSTANDING SHARES TODAY: As of the date of this prospectus, its certificate of incorporation, authorizes it to issue up to 260,000,000 shares of capital stock of which 250,000,000 shares are of common stock, par value $0.001 per share, and 10,000,000 shares are of preferred stock, par value $0.001 per share. As of December 7, 2009, 116,002,033 shares of common stock and no shares of preferred stock were issued and outstanding.
MOST RECENT BALANCE SHEET DATA: At the end of September, Dendreon had cash and equivalents of over $177.3 million, short-term investments of $over $71 million, and long-term investments of over $16 million.
Jon C. Ogg
December 8, 2009
Biotech Short Sellers Changing Beat (AMGN, GILD, BIIB, CELG, GENZ, LIFE, DNDN, HGSI, AMLN, OSIP)
Over the weekend we got to see some of the short interest changes for the key biotech stocks. While these was no clear unified directional move, there were some interesting changes seen. Amgen Inc. (NASDAQ: AMGN), Gilead Sciences Inc. (NASDAQ: GILD), Biogen Idec Inc. (NASDAQ: BIIB), Celgene Corporation (NASDAQ: CELG), and Genzyme Corp. (NASDAQ: GENZ). Due to growing market caps in the sector, we have also included Life Technologies Corporation (NASDAQ: LIFE), Dendreon Corp. (NASDAQ: DNDN), Human Genome Sciences Inc. (NASDAQ: HGSI), Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), and OSI Pharmaceuticals Inc. (NASDAQ: OSIP)in the run down this month.
Amgen Inc. (AMGN)
AS OF DATE Short Int. Change
9/30/2009 18,363,198.. 5% GAIN
9/15/2009 17,449,497
Gilead Sciences Inc. (NASDAQ: GILD)
AS OF DATE Short Int. Change
9/30/2009 16,015,311.. 3.8% GAIN
9/15/2009 15,466,285
Celgene Corporation (NASDAQ: CELG)
AS OF DATE Short Int. Change
9/30/2009 8,177,698.. 9% DROP
9/15/2009 8,935,957
Biogen Idec Inc. (NASDAQ: BIIB)
AS OF DATE Short Int. Change
9/30/2009 9,459,673.. 1% DROP
9/15/2009 9,565,418
Genzyme Corp. (NASDAQ: GENZ)
AS OF DATE Short Int. Change
9/30/2009 8,771,379.. 19% GAIN
9/15/2009 7,388,108
Life Technologies Corporation (NASDAQ: LIFE)
AS OF DATE Short Int. Change
9/30/2009 6,799,196.. 3% DROP
9/15/2009 7,033,841
Dendreon Corp. (NASDAQ: DNDN)
AS OF DATE Short Int. Change
9/30/2009 8,939,869.. 2% DROP
9/15/2009 9,146,253
Human Genome Sciences Inc. (NASDAQ: HGSI)
AS OF DATE Short Int. Change
9/30/2009 19,786,339.. 1% DROP
9/15/2009 19,867,823
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN)
AS OF DATE Short Int. Change
9/30/2009 13,171,869.. 5.7% DROP
9/15/2009 13,928,154
OSI Pharmaceuticals Inc. (NASDAQ: OSIP)
AS OF DATE Short Int. Change
9/30/2009 5,444,450.. 5.8% GAIN
9/15/2009 5,137,212
JON C. OGG
BioHealth’s Top Stock Moves (AMLN, BMY, DNDN, DEPO, MRNA, ONXX)
Some of today’s top movers in biotech and the world of BioHealth are Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Bristol-Myers Squibb Co. (NYSE: BMY), Dendreon Corporation (NASDAQ: DNDN), DepoMed Inc. (NASDAQ: DEPO), MDRNA, Inc. (NASDAQ: MRNA), and Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX).
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) has seen little reaction after an activist investors has exited from the position in Amylin. A weekend SEC filing showed that Eastbourne Capital has liquidated its Amylin stake after having previously held a 9.5% stake. Reports put the reason as frustration with management. The positive read is that this one will no longer have at least one group publicly pushing it. And the bad is that this is a show of force of a loss of confidence. Shares are effectively flat at $14.20.
Bristol-Myers Squibb Co. (NYSE: BMY) is trading higher this morning after Goldman Sachs listed it as one of its top candidates for a drug merger out there. Be advised that after a 1.2% gain to $22.75 today this one has a market cap of some $45 billion. Even if a billion isn’t what it used to be and even if a foreign buyer might perceive a 20% currency discount opportunity today, that is a very large number.
Dendreon Corporation (NASDAQ: DNDN) is running again on new solid board member additions to help it transition from an R&D company to a manufacturing company. These are Ian Clark, the CEO of Roche’s Genentech unit, and Pedro Granadillo, a former Eli Lilly (LLY) manufacturing executive. These are viewed as top brass to help the company transition from pre-revenue into a revenue generator (when and if its PROVENGE gets approved). Shares are up almost 8% at $29.58 on over 3 million shares as of 11:30 AM EST.
DepoMed Inc. (NASDAQ: DEPO) has been hit very hard on mixed news that its Phase III clinical data for its menopausal hot-flash treatment Serada was a disappointment. The study for hot flashes drug met only 1 goal at 12 weeks. Despite the results, Depomed remains hopeful about the program and said it plans to discuss these results with the FDA. It seems as though that traders are shooting DepoMed first and may or may not ask questions later. Around 11:30 AM EST we have seen 6.9 million shares, and DepoMed is down over 38% at $3.90.
MDRNA, Inc. (NASDAQ: MRNA) is trading up substantially higher on news that UsiRNA reduces tumor growth in vivo, where the company showed data demonstrating continued progress in the advancement of its oncology program. MDRNA’s UsiRNAs is delivered by the company’s DiLA2 platform that showed subsequent reductions in tumor growth in models of liver and bladder cancer. Shares are up 29% at $1.60 on over 5.5 million shares.
Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) has been one of the long-standing stocks in the rumor mill that has been noted as a possible buyout candidate. Today the company made a deal of its own and shares are up despite the notion that acquirers usually trade off. Onyx signed a definitive agreement to acquire Proteolix, Inc., a privately held biotech focused on discovering and developing novel therapies that target the proteasome for the treatment of hematological malignancies and solid tumors. The deal is valued at $276 million, but could ultimately end up being worth some $851 million. Onyx shares are up 7% at $28.81 on over 3.3 million shares.
JON C. OGG
October 12, 2009
Price snapshots all taken as of 11:30 AM EST
Why Dendreon Isn’t Running on Positive Analyst Call (DNDN)
Dendreon Corp. (NASDAQ: DNDN) has not continued its strong run-up we had been seeing, although shares are up almost 25% in just the last week. And then today came an initiation with an “Outperform” rating and a $40.00 target at Leerink Swann. The analyst expects that PROVENGE, its prostate cancer vaccine, will get FDA approval and that it will get broad widespread adoption from physicians. All of that is good, but shares are at a point where a wait and see attitude is starting to take hold.
Dendreon is scheduled to speak in front of investors and analysts Thursday morning in New York City. Last week’s gain seen in options trading was mostly based on takeover or partnership hopes and rumors because most of the activity had been in teh September-2009 Calls which expired last week.
Leerink Swann noted that there may interest in both on-label and off-label use, which is actually not outside of the norm for many patients. The platform will have limited competition and may actually become a platform for many other cancers.
Part of the caution is that there is a worry that Thursday’s meeting will not have much in the form of new data. The target is now for a late-Q4 approval by the FDA, and investors will be watching to make sure that the FDA does not make the big delay or request for any additional data. PROVENGE could have likely been on the market a year ago if everything had gone smoothly.
We may get an idea for some sort of sales projections and more detailed pricing information. We expect to hear more longer-term details about the recent locations secured for manufacturing and its supply pacts and more. But as far as any partnerships, mergers, or definite change from the FDA, we are not expecting that other than we’d say, “We hope so.”
The Leerink Swann upgrade today was an upgrade that just came too late after too much of a run in the last week. If this was a week ago you would have seen more of a move from that.
At 1:00 PM EST we have shares trading up 0.3% at $29.56 on almost 3 million shares.
Jon C. Ogg
September 22, 2009
Exploring Chances of Dendreon Rumors (DNDN, SNY, AZN)
We have been digging into ‘rumors’ of a Dendreon Corp. (NASDAQ: DNDN) buyout. We would stress that Dendreon has been the subject of rumors before as both a partnership or stake-taken deal, and sometimes as merger-buyout bait, several times in the past. As with all rumors and with all ‘hope’ trades like this, Caveat Emptor!
That being said, the stock volume is exponential, but the most impressive activity is in the SEPT-2009 call options. The reason this is of such notice is because the September options expiration date is only four short days out, meaning that the bets for or against a deal would suggest an “imminent” timing if it was accurate.
We noticed a blurb out there today noting that Sanofi-Aventis (NYSE: SNY) was the likely party…IF… the rumor is correct. In the past we have also heard of Roche/Genentech as a potential rumored buyer. One name also thrown out as an acquirer of small to mid-cap biotech companies is AstraZeneca plc (NYSE: AZN). To date, all such rumors have been unfounded and never materialized. We would also note that with shares up above $26.50, they are also back very close to the old intra-day high of $27.40. The old high closing levels were $26.08 on June 19… On April 29 this hit the $27.40 intra-day high but the close was $22.94; and the last day this hit $27.00 was June 7, but it closed at $25.74.
The biggest hurdle to date is that a buyer would be forced to pony-up much more cash than today’s price. The buyer is also taking a big FDA event-risk as PROVENGE is still ‘believed to be approvable’ and has not received FDA approval as a last line of defense for men with advanced prostate cancer. Roche took that risk with Genentech, and while everyone believed that the endpoint was likely it turned out to not be the case.
Anything is of course possible in the land of the biotech rumor-mill. Again, Caveat Emptor!
JON C. OGG
Dendreon's Quarterly Report Shows Assets & Updates (DNDN)
Dendreon Corp. (NASDAQ: DNDN) has made its quarterly SEC filing with its earnings results. We are not interested in revenues as they are too small to count. But we wanted to review its full assets, its cash burn, and its updates which have been talked about and have been tossed around in many local media reports over the recent weeks and months. We have included these broken down and taken data out of its SEC filing.
Assets are as follows: Cash and cash equivalents $ 266.122 million; Short-term investments $21.334 million; Restricted cash $4.882 million; Prepaid antigen costs $18.975 million. The company also noted that prepaid expenses and other current assets $2.692 million. Total current assets were listed as $314.005 million.
Dendreon’s total current liabilities were listed as $130.179 million and the company did still have $52.535 million convertible notes listed as liabilities as of June 30. Those notes are what is remaining from the $85.3 million issued in June and July of 2007.
As of June 30, 2009, there was $19.0 million of capitalized costs associated with the purchase of the antigen used in the manufacture of Provenge, which antigen Diosynth RTP, Inc. is obligated to manufacture and delivery is expected to begin in 2010. It later noted that in may 2009, it placed an order for $39.5 million with Diosynth, amended under a December 22, 2005 agreement, which covers the commercial production of the antigen used in connection with Provenge. Dendreon’s remaining obligation to pay Diosynth as of June 30, 2009 is $20.5 million upon the delivery of antigen.
Operating expenses were $13.321 million for R&D, $7.608 million for general & administrative, and total operating expenses were $20.929 million.
There are also many more items in the notes…
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