Question About Arena Pharmaceuticals (ARNA)
Arena Pharmaceuticals (NASDAQ:ARNA) announced what should have been viewed as positive news, but its shares barely moved.
The firm reported that reported that data from the pivotal BLOOM (Behavioral modification and Lorcaserin for Overweight and Obesity Management) Phase 3 trial demonstrate lorcaserin significantly increased excess weight loss, improved markers of cardiovascular risk and glycemic parameters, and was not associated with depression or suicidal ideation. Additional subgroup analyses showed that lorcaserin caused the greatest improvements in lipid profiles, glycemic parameters and other markers of cardiovascular risk in patients in the highest risk categories. The new data were presented at Obesity 2009, the 27th Annual Scientific Meeting of The Obesity Society. Read more
Arena Pharm (ARNA) Goes Nowhere On Bad News
Arena Pharmaceuticals (ARNA) is off 1.5% to $5.15 on what would appear to be bad news.
Leerwink Swann downgraded that stock.
According to AP, “the company’s latest trial results showed subjects didn’t lose as much weight on Lorcaserin as they did on the other two drugs. Arena said the results were still strong enough for approval, but shares tumbled more than 11% last Friday.”
Leerwink Swann view does not hold much water.
Douglas A. McIntyre
Bad Arena (ARNA) News Good For Orexigen (OREX) And Vivus (VVUS)
Arena Pharmaceuticals (ARNA) disappointing news about diappointing trial results for its obesity treatment lorcaserin.
The news, however, is pushing the firms two competitor higher in early trading as they are perceived to benefit from ARNA’s failure. Vivus (VVUS) is trading up 7% to $11.35 on heavy volume. Orexigen (OREX) started the session higher by now trades a little below flat at $9.14
Douglas A. McIntyre
Arena Pharmaceuticals (ARNA) Disappoints Wall St.
Shares of Arena Pharmaceuticals (ARNA) are off 11% to $4.35 on drug trial news that investors did not think was up to expectations.
ARNA announced that it had positive, highly significant top-line results from the BLOSSOM (Behavioral modification and LOrcaserin Second Study for Obesity Management) trial. BLOSSOM confirms the results previously reported for the BLOOM (Behavioral modification and Lorcaserin for Overweight and Obesity Management) trial and completes the lorcaserin Phase 3 pivotal registration program of 7,190 patients evaluated for up to two years. Arena plans to submit a New Drug Application, or NDA, for lorcaserin to the US Food and Drug Administration, or FDA, in December. Read more
VIVUS Becomes THE New Weight Loss Target (VVUS, OREX, ARNA)
Emerging drug player VIVUS Inc. (NASDAQ: VVUS) is soaring to new heights on what is already exponential trading volume on its key weight loss study results. The company’s interim update showed that two studies covering more than 3,750 patients may become the new weight loss target of all weight loss drugs, and therefore which could be used for diabetes and heart disease patients in some or many cases.
Those taking Qnexa reduced their weight by up to 14.7% on average in one trial, and the drug also showed improvement in blood pressure and diabetes symptoms and risk factors. Vivus’ second study showed an average weight loss of about 13.2%.
Those taking the placebo lost only about 2.5% of their weight in the first study and about 2.4% in the second study. Vivus indicated that it will seek FDA approval by year end.
Vivus reported that the side effects included dry mouth, tingling, constipation, altered taste and insomnia. Some reported drug-related instances of depression and depressed mood and adverse events of moderate to severe nature were observed in less than 2% and were actually similar to that seen in the placebo group. Unfortunately, these mood and depression instances are very common instances in those trying to lose significant weight.
There is an important aspect here, and that is that it puts two other drug companies in the hot seat. Orexigen Therapeutics Inc. (NASDAQ: OREX) met its weight loss targets in late stage studies and it has previously given an early-2010 for when it seeks FDA approval. Arena Pharmaceuticals Inc. (NASDAQ: ARNA) is also developing a weight loss treatment which it said earlier this year met endpoints.
This new study result has shares of VIVUS up over 50% to $10.60 in pre-market trading and at 9:50 AM EST there has already been 4.15 million shares trading hands. More importantly, this takes the stock to highs of this entire decade now.
Orexigen Therapeutics is also up almost 4% at $8.50 on the news, while Arena Pharmaceuticals is up almost 7% at $4.94.
This and other studies in the war against diabetes and obesity was mentioned in a much broader and much larger piece including stocks: NVO, AMLN, LLY, MNKD, PFE, SPEX, VVUS, GNBT, BMY, AZN, ARNA, GERN, STEM, OREX, HDIX, PODD
JON C. OGG
Diabetes Drug War Heats Up (NVO, AMLN, LLY, MNKD, PFE, SPEX, VVUS, GNBT, BMY, AZN, ARNA, GERN, STEM, OREX, HDIX, PODD)
Over the last couple of weeks, there has been quite a bit of new data in the drug war in the fight against diabetes. New studies have been updated, earnings projections have been made, FDA dates have been telegraphed and more. While these are still far short of ultimate cures, the war against diabetes may have many new or improved treatments out sooner rather than later. We originally discussed one or two of the key upcoming treatments pending for the eight major diseases and conditions as “the next $170 billion opportunity” and this is a much deeper dig into that broad initiation. We have included many of the recent developments in the potential treatments for obesity as well, considering that Type II diabetes and obesity are frequently conditions tied directly to each other.
According to the Journal of Health Affairs, the figure on obesity for Americans is a whopping $147 billion per year in total medical costs. This comes to 10% of all healthcare spending. The figure from the U.S. Centers for Disease Control was some $116 billion spent domestically on treating diabetes in 2007. As this is a lengthy bit, we have not included some of the other treatments that have been in use or that were recently flagged because of reports of higher chances of cancer rates associated by the long-term use of these.
FDA & IMMEDIATE ACTION
There is a new diabetes hopeful that is supposed to be coming sooner rather than later. Novo Nordisk (NYSE: NVO) reported a 21% gain in earnings in the last week and said that it expects the FDA to make a decision on its next-generation diabetes drug Victoza (liraglutide) in a matter of weeks. The company’s CFO and CEO both indicated that the Danish company does expects a positive response from the FDA and we heard a August to September expectation. Novo Nordisk has already launched Victoza in England, Germany and Denmark last month and expects to release it in other European Union countries throughout 2009 and into 2010. The benefit is that this one doesn’t risk pushing blood glucose levels to counts which are dangerously low and it also helps users lose weight. Novo Nordisk said it has priced Victoza competitively with Byetta from Amylin Pharmaceutical, Inc. (NASDAQ: AMLN) and Eli Lilly (NYSE: LLY). After the earnings and after shares were still close to 52-week highs, we saw analyst downgrades on Friday for Novo Nordisk by both UBS and by J.P. Morgan.
The drug still expected the next big new release with Blockbuster potential is an inhalable insulin from MannKind Corp. (NASDAQ: MNKD). Afresa is to be its name. Despite past woes of inhalable insulin, MannKind shares were hitting 52-week highs in June and its shares are still up 20% from three months ago. A late-stage study showed that Afresa’s performance was similar to injectable insulin. The company recently sold a 7.4 million shares secondary offering to raise cash for this launch, and its CEO took 1 million shares of the offering. The thought was that MannKind would secure a partner for marketing and development, but the recent stock offering gives it more internal options ahead of what is believed to be a Spring-2010 FDA approval action. Pfizer Inc (NYSE: PFE) has been thought of as a partner as it moved Exubera inhaled-insulin patients to MannKind’s experimental product. The two companies had been partners until Pfizer pulled Exubera from the market in 2007.
There is also a huge opportunity for the once per week dosing. We are not yet convinced that this can be a universal next generation treatment, however this might be fine for many of the lower grade cases if you can refer to any diabetes cases as lower grade. Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Eli Lilly (NYSE: LLY) and Alkermes Inc. (NASDAQ: ALKS) have had a recent New Drug Application accepted by the FDA for review. Exenatide is an investigational sustained release medication for type 2 diabetes that would be injected once per week and is the active ingredient in BYETTA. We are not alone in this thought, but Amylin is a company which many have thought would be acquired for years now when considering the link of diabetes and obesity.
VIVUS, Inc. (NASDAQ: VVUS) has a substantial shot here with Qnexa, its Type 2 diabetes treatment through weight loss assistance. The stock recently came off on worries of its risk factor language that may have to be disclosed, but it showed a 9.4% weight loss or over 20 pounds observed in patients. The DM-230 study was a 56-week study assessing the impact of Qnexa on glycemic management in 130 obese patients. The 10-site study was comprised of 90 females and 40 males with an average age of 50 who had Type 2 diabetes, and a majority of the patients had been diagnosed with diabetes for more the five years and were taking two or more oral diabetes medications. In the phase II and phase III clinical trials, Qnexa demonstrated glycemic control, significant weight loss, and an improvement in cardiovascular risk factors. VIVUS is also presenting data at a brokerage firm conference this coming Thursday. The company’s market cap is still just under $500 million and its most recent balance sheet had north of $144 million in cash and equivalents with very little long term debt.
Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) have recently received FDA approval for Onglyza as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes. This Onglyza is a once-daily dipeptidyl peptidase-4 (DPP4) inhibitor that can be used in combination with commonly prescribed anti-diabetic medications or on a standalone basis as a monotherapy to significantly reduce glycosylated hemoglobin levels.
MORE OBESITY CANDIDATES COMING
Several biotechnology companies are working on the next wave of obesity candidates, as noted above in VIVUS’s Qnexa. Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) has Lorcaserin, Orexigen Therapeutics, Inc. (NASDAQ: OREX) has Contrave, and Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) has pramlintide. Orexigen’s Contrave has completed phase III trials and our time line for when the company will file for approval is in early 2010. The company is presenting data this Thursday at the Canaccord Adams Global Growth Conference. VIVUS’s Qnexa is currently in two phase III programs with a new drug application expected around the middle of 2010. Amylin’s pramlintide and metreleptin are currently in phase IIb.
We have the expectation that Arena will have a first-mover advantage with an NDA planned before the end of 2009. Certainly, any delays or advances could change the status of the front-runner category leadership. Arena’s near-term catalyst is the release of the phase III BLOSSOM data out in September 2009, which will be used as part of a supplemental NDA in late 2009 or into 2010. This still leaves a year or more for final FDA action from now. Arena shares surged in late-July after reporting that its obesity results met the three endpoints.
STEM CELLS
Stem Cell therapy offers a huge promise, but so far that looks to be years out and the promise is actually more of a hope for the time being. Geron Corporation (NASDAQ: GERN) is in the research stage of using stem cells in evaluation of Type 1 diabetes. The exact level of this study is not as far as along as some of its cancer and spinal studies, but this is one of the few stem cell companies that have dedicated part of their mission to diabetes. StemCells Inc. (NASDAQ: STEM) also has a Pancreatic Program concentrating its efforts on Type-I diabetes. Its goals are to identify, isolate, and culture pancreatic stem and progenitor cells, and to test their therapeutic potential.
While we at BioHealthInvestor would love to hold hope and promise for stem cells, we would not be hoping for stem cell treatments any time in the near future. While some positive notions have been noted in the stem cell sector, the National Institute of Health noted, “Over the past several years, doctors have attempted to cure diabetes by injecting patients with pancreatic islet cells—the cells of the pancreas that secrete insulin and other hormones. However, the requirement for steroid immunosuppressant therapy to prevent rejection of the cells increases the metabolic demand on insulin-producing cells and eventually they may exhaust their capacity to produce insulin. The deleterious effect of steroids is greater for islet cell transplants than for whole-organ transplants. As a result, less than 8 percent of islet cell transplants performed before last year had been successful.”
BioHealth Companies Keep Raising Cash (MNKD, IDIX, ISPH, ARIA, ONTY, NBY, SOMX, ARNA, OXGN)
The appetite for biotech and emerging pharmaceutical companies to raise cash is almost a never ending line of companies. We have some offerings today and have seen many offerings and filings from companies to offer shares. These are just some of the filings and offerings we have seen.
MannKind Corporation (NASDAQ: MNKD) priced a secondary offering this morning of 7,400,000 shares of its common stock, and while the press release did not say what price the deal came at the syndicate group told us this went out at $7.35 per share. Chairman, CEO, and principal stockholder Alfred E. Mann is purchasing 1,000,000 of these shares from the underwriters, which brought in over $54 million before fees and commissions. MannKind shares are down 9.5% at $7.37. Its 52-week trading range is $2.00 to $9.25.
Idenix Pharmaceuticals Inc. (NASDAQ: IDIX) priced a secondary offering this morning of 7,248,936 shares of common stock at $3.14 per share to clear roughly $22 million before fees and commissions. Its shares are down over 14% at $3.15 today and its 52-week range is $1.86 to $10.10.
Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) priced a 22.2 million share secondary offering of common stock this morning at a price of $4.50 per share. This raised close to $100 million. Share are down 6% at $4.66 and the 52-week trading range is $1.68 to $5.80.
Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) on Tuesday priced its public offering of 19,000,000 shares of common stock at $1.75 per share; the company said net proceeds after fees and commissions was roughly $30.9 million.
Oncothyreon Inc. (Nasdaq: ONTY) announced on Tuesday that it had obtained commitments from several investors for $15 million in a direct offering. The agreement was to purchase approximately 2.28 million shares of common stock and warrants to purchase approximately 684,000 shares of common stock for gross proceeds of approximately $15.0 million. The company noted that investors agreed to purchase the shares and warrants for $6.5775 per unit with each unit being one share of common stock and a warrant to purchase 0.30 shares of common stock and an exercise price of $6.5775 per share.
NovaBay Pharmaceuticals, Inc. (NYSE: NBY) filed this week with the SEC to offer up to $20,000,000 of any combination of common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon the exercise of warrants. It market cap is a mere $48 million.
Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) filed this week to cover for the resale of up to 10,212,750 shares of common stock (roughly $23 million) from time to time for existing security holders and certain transferees of the selling security holders. Roughly 5.1 million of these shares were issued in a private placement that closed on July 8, 2009; the additional 5.1 million shares are issuable upon a warrant exercise sold in the private placement which expire on July 8, 2016. If sold, none of the proceeds go back to NovaBay.
Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) filed on Monday to allow the resale from time to time of up to 28,000,000 shares of common stock by the selling stockholders from a July private placement. We will not receive any of the proceeds from the sale of these shares. If sold, none of the proceeds go back to Arena.
OXiGENE, INC. (NASDAQ: OXGN) filed this week for the resale of up to 10,000,000 shares of common stock from time to time by Symphony ViDA Holdings LLC. This was via an amendment dated as of July 2, 2009. If sold, none of the proceeds go back to OXiGENE.
JON C. OGG
AUGGUST 5, 2009
SciClone shares fall on revenue worries, secondary offering fears (SCLN, ARNA)
SciClone Pharmaceuticals Inc. (SCLN) shares are down more than 7 percent in early trading Wednesday, after analyst Hamed Khorsand at BWS Financial expressed concerns about the company’s unsustainable revenue growth.
Khorsand says that China was stocking the SciClone drug Zadaxin as a vaccine against swine flu. But essentially, it’s a one-time event that gave a boost to revenue in the second-quarter that won’t be sustained going forward.
The assumption that SciCone can maintain such a strong growth rate is misplaced, Khorsand says, setting up investors in the company for a disappointment.
Also of note, SciClone filed a shelf registration in May 2009. The company has not yet tapped it, but the risk that it will do so — and dilute the shares of existing holders in the process — increases along with the company’s stock price.
As noted in previous posts, an anecdotal market observation of BioHealthInvestor.com is that the market in recent months is seeing an increase in the number of stock offerings, especially among companies with the most at-risk balance sheets. A recent quantitative analysis at 247wallst.com may back up that observation. — Mike Tarsala
See related post on Arena Pharmaceuticals Inc. (Nasdaq: ARNA)
Arena dilutes its stock value again (ARNA)
Arena Pharmaceuticals (ARNA) was supposed to have eased all cash concerns in June after it reached a $100 million funding agreement, but that hasn’t stopped the company from raising an additional $50 million, as announced late Monday.
In a filing, Arena says it plans to offer common shares from a shelf registration it filed last year in an effort to raise $50 million. The announcement comes on the heels of an announced $100 million credit facility with Deerfield Management just several weeks ago.
The credit facility added the issue of warrants for 28 million shares, diluting what was about 80 million shares outstanding. Arena traded about 8 percent lower after hours, near $4, after existing holders realized that the value of their stock was likely to be diluted yet again.
One anecdotal market observation is that the market in recent months is seeing an increase in the number of stock offerings, especially among companies with the most at-risk balance sheets. Read the details at 247wallst.com. — Mike Tarsala
Arena Hinges On New Obesity Results (ARNA)
Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) will be holding a conference call and webcast Monday morning, March 30, 2009, at 8:30 AM EST. The topic is to be Arena’s top-line results from its BLOOM trial, the Behavioral modification and Lorcaserin for Overweight and Obesity Management). This is to be the first of two pivotal trials evaluating the safety and efficacy of lorcaserin for weight management. This is also the make-or-break event for the company according to Wall Street traders who have been gaming the stock.
This stock has been in “wait and see mode” pending the results. Shares closed up big on Friday as many are expecting positive results, although the outcome will be forthcoming shortly. Shares closed on Friday at $4.50, up $0.36 or 8.70%. Its 52-week trading range is $2.70 to $7.42 and its market cap is $338.7 million.
The call option betting in this one has been very active ahead of this result. In fact, it is possible that these results could lead to post-options trading of more than 5 million shares alone due solely to options being traded. This one trades only about 2 million shares per day.
As of last quarter it had just over $110 million in pure liquid cash and equivalents, and it carried $36.7 million in accounts payable and $71.2 million in direct long-term debt. Both of those items are before the recent $50 million raised.
Stay tuned, this could be one of the more active stocks Monday.
JON C. OGG
Those hosting the call are as follows:
Jack Lief, President and CEO,
Dominic P. Behan, Ph.D., Sr. VP and Chief Scientific Officer,
William R. Shanahan, M.D., VP and Chief Medical Officer,
Christen M. Anderson, M.D., Ph.D., VP, Clinical Development.
The conference call may be accessed by dialing 877.874.1565 for domestic callers and 719.325.4758 for international callers.
