More Biotech Buyout or M&A Targets (OSIP, VRTX, AUXL, ITMN, HGSI, CELG, DNDN, ENZN, FACT, PBE, XBI)
After today’s hostile Astellas offer for OSI Pharmaceuticals (NASDAQ: OSIP), we have investors and traders alike looking for ‘the next takeover target’ in biotech. Buy now you know that there are many pitfalls in simply looking for biotech stocks to buy because they will be taken over. We have taken a look through our own recent stocks noted as takeover candidates and even gone through some sites of our partners looking through potential takeover candidates in the space.
Morningstar just last week had a short video with some key potential buyout targets in the biotech space. It noted Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL), and InterMune Inc. (NASDAQ: ITMN). Those are all names that have come up as takeout targets before.
But two that are on Morningstar’s list for buyouts are Human Genome Sciences Inc. (NASDAQ: HGSI) and Celgene Corporation (NASDAQ: CELG) for its REVLIMID franchise. The problem with Human Genome is that it is in the same boat we have addressed on multiple occasions: its size got away from the potential realm of buyers. And Celgene has just become too big at a $28 billion market cap for most potential buyers to consider it and the sales growth from $2.689 billion in 2009 is expected to go to $3.26 billion in 2010 and $3.75 billion in 2011 per Thomson Reuters estimates.
After looking around elsewhere, we went back to some Dendreon Corp. (NASDAQ: DNDN) rumors from last month we covered. This was based somewhat on options trading, and we think this company may have to wait for a suitor. Taking the risk of buying the company out before the FDA approves PROVENGE for advanced prostate cancer is something companies are seeming to shy away from.
Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is another name that comes up routinely in the rumor mill. We noted this one hitting 52-week highs in January on fresh rumors.
Facet Biotech Corporation (NASDAQ: FACT) has also fought off attempts from Biogen Idec (NASDAQ: BIIB) as a new add-on for its MS franchise. Biogen has been rebuffed and it supposedly will not have an interest anymore.
ETF investors are chasing up names in the sector as well. PowerShares Dynamic Biotech & Genome (NYSE: PBE) is up 4% at $18.48 and the SPDR S&P Biotech (NYSE: XBI) is up 4.7% at $58.98.
Jon C. Ogg
Bill Gates, Small Biotech's New Biggest Investor (ALTH, AMAG, RDEA, ARYX, AUXL, BMRN, ETRM, INCY, ITMN, MAPP, OREX, VRUS, REGN, SGEN, VRTX, XNPT)
Late yesterday came the 13-F quarterly filing from the Bill & Melinda Gates Foundation Trust. Bill and Melinda have invested in drugs and research before, as well as dug companies, but there was a slew of biotech stocks in their quarterly holdings. Some of these are cancer winners, while others may seem random. Below we have broken these out by company and size of the position in dollars (M for million; K for thousand) as well as the number of shares.
ALLOS THERAPEUTICS INC. (NASDAQ: ALTH) $3.090M; 500,000 shares
AMAG PHARMACEUTICALS INC. (NASDAQ: AMAG) $1.839M; 50,000 shares
ARDEA BIOSCIENCES INC. (NASDAQ: RDEA) $2.165M; 210,386 shares
ARYX THERAPEUTICS INC. (NASDAQ: ARYX) $1.635M; 480,799 shares
AUXILIUM PHARMACEUTICALS INC. (NASDAQ: AUXL) $2.062M; 74,400 shares
BIOMARIN PHARMACEUTICAL INC. (NASDAQ: BMRN) $1.295M; 104,856 shares
ENTEROMEDICS INC. (NASDAQ: ETRM) $81K; 59,700 shares
INCYTE CORP. (NASDAQ: INCY) $1.02M; 435,700 shares
INTERMUNE INC. (NASDAQ: ITMN) $1.807M; 109,900 shares
MAP PHARMACEUTICALS INC. (NASDAQ: MAPP) $98K; 46,524 shares
OREXIGEN THERAPEUTICS INC. (NASDAQ: OREX) $36K; 13,900 shares
PHARMASSET INC. (NASDAQ: VRUS) $821K; 83,641 shares
REGENERON PHARMACEUTICALS (NASDAQ: REGN) $492K; 35,500 shares
SEATTLE GENETICS INC. (NASDAQ: SGEN) $34.718M; 3,521,088 shares
VERTEX PHARMACEUTICALS INC. (NASDAQ: VRTX) $2.729M; 95,000 shares
XENOPORT INC. (NASDAQ: XNPT) $2.517M; 130,000 shares
Analysts Weighing In On BioHealth Stocks (AUXL, AVRX, CPHD, MEND, AMED)
These are some of the analyst calls impacting biotech, medical, and healthcare stocks right at the open this Thursday morning:
- Auxilium Pharmaceuticals (AUXL) Cut to Neutral from BUY at B of A.
- Avalon Pharma (AVRX) Cut to Hold from Buy at Cantor Fitzgerald.
- Cepheid (CPHD) Cut to Neutral from Buy at UBS.
- Micrus Endovascular (MEND) Started as Hold at Needham & Co.
Amedisys (AMED) Raised to Outperform from Mkt Perform By Wachovia… more into home based healthcare and hospice, but involves caring for the aged and ill.
Jon C. Ogg
August 14, 2008
When Barron's Runs BioHealth Stocks (CEPH, AXL, ISRG)
Today we are seeing two stocks higher after Barron’s featured these over the weekend in what traders call “The Weekly Bible” in the business.
Cephalon (NASDAQ: CEPH) is trading up slightly after Barron’s covered its promiosing pipleline. With two new products on the market and one more in 2009, Barron’s thesis was that shares are not having the same problems as other bigger drug stocks and that shareholders should be sleeping easily here. Shares are only up 0.5% at $77.37, but it is a larger company with a market cap of more than $5 Billion.
Auxilium Pharmaceuticals (NASDAQ: AUXL) is seeing a sharp 5% gain today after Barron’s talked up its Testin product, a testosterone gel used by men to live more energetic lives. Barron’s noted that the Xiaflex drug for a hand treatment in the hundreds of thousands could have blockbuster status by 2011 after launching in 2009.
Barron’s can definitely make your biotech or drug stock rise when they cover it. But remember that the axe swings both ways. Back on July 28, 2008, shares of Intuitive Surgical (NASDAQ: ISRG) took almost a $14.00 haircut after the Barron’s cover story called the company overvalued.
Jon C. Ogg
August 11, 2008
Auxilium Diabetes Drug Meets Endpoints, Yet Shares Slide (AUXL)
Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL) has reported that its experimental treatment for Dupuytren’s contracture met its primary endpoint in two Phase III studies. Auxilium plans to submit an application for approval with the Food and Drug Administration in early 2009.
Dupuytren’s contracture is a diabetes-related condition where fingers and/or the palm of the hand thicken and shorten, causing fingers to curve inward. The company noted that this could become the first new first-line treatment option for Dupuytren’s contracture. The company results reported a 77.8% patient response in those treated with Xiaflex, which saw a reduction in joint curvature. The placebo group saw a 14.3% improvement.
The company used 850 patients who were given Xiaflex injections in trials through May 2008. Of the group, 7 serious adverse events possibly related to the drug have been reported and possible side effects were 3 tendon ruptures, 1 ligament injury, and 1 case of a serious blood clot. As far as how that compares to traditional treatments Auxilium noted that the rate of adverse events is comparable to that involved in surgery.
What is interesting is that if you read through the release it all sounds good. But shares are down by close to 10% in pre-market trading. Shares closed at $31.53 Monday and are down at $28.50 in pre-market trading on more than 400,000 shares at 8:20 AM EST. The 52-week trading range is $14.37 to $36.14, and its market cap before today’s drop was about $1.3 Billion.
Jon Ogg
June 3, 2008
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