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
Myriad Genetics (MYGN) Higher On Analyst Upgrade, Earnings News
Myriad Genetics (MYGN) is up 15% to $29.89 on an upgrade from Canaccord Adams. The stock still trades well below its 52-week high of $47.08. Morgan Joseph still has a “sell” rating on the stock.
The company is working almost exclusively on molecular diagnostics. It dumped its other R&D operations last year.
For the fiscal year ending June 30, MYGN announced that molecular diagnostic revenue for fiscal 2009 increased 47% to $326.5 million from $222.9 million in fiscal 2008. Operating income more than doubled to $126.5 million from $61.6 million in fiscal 2008
In the fourth quarter of the fiscal, molecular diagnostic revenue increased 33% to $86.1 million in the fourth quarter of fiscal 2009, from $64.7 million in the fourth quarter of last year. Operating income rose 80% to $34.5 million, compared to $19.2 million for the fiscal 2008 fourth quarter. Net income, including loss from discontinued operations of $13.1 million, was $23.6 million or $0.24 per diluted share.
At June 30, 2009, the firm had approximately $392 million in cash, cash equivalents and marketable investment securities, compared with $420 million at June 30, 2008. The 7% decrease resulted from the transfer of $188 million to Myriad Pharmaceuticals in conjunction with the spin off of that business, offset by $160 million of cash generated from operations and the exercise of employee stock options.
Douglas A. McIntyre
Biotech Stocks On the Move Early Wednesday (AMAG, MYGN, SPPI, NVAX)
AMAG Pharmaceuticals:
AMAG Pharmaceuticals Inc. (Nasdaq: AMAG) are up about 6 percent with more than 17,000 shares traded as of 8 a.m. Eastern this morning, after the FDA approved the company’s Feraheme drug as an iron replacement therapy for patients with chronic kidney disease.
The approval removes an overhang for the company. It first sought FDA approval for the drug in December 2007, and twice received requests for more information on it last year.
Myriad Genetics:
Myriad Genetics (Nasdaq: MYGN) shares are down more than 15 percent on very strong premarket trading volume early this morning. The company last night said it expects fiscal Q4 revenue of $86 million, shy of the $91.6 million analysts had anticipated, citing high unemployment and patients cancelling or delaying doctor visits.
Several analysis firms including Oppenheimer and RBC Capital have downgraded the company’s shares this morning, with several citing worries about revenue growth rates.
Spectrum Pharmaceuticals:
Spectrum Pharmaceuticals (Nasdaq: SPPI) Inc. shares are down roughly 8 percent on nearly 60,000 shares traded as of 8:15 a.m. Eastern. The company announced early this morning that it will raise $21 million from institutional investors at $7.15 a share. The stock had been trading near $7.65 a share.
Novavax:
Shares of vaccine maker Novavax Inc. (Nasdaq: NVAX) are up very slightly in premarket trading, seeing some continued buying a day after Spanish health authorities licensed its technologies to make pandemic and seasonal flu vaccines.
The stock had risen more than 30 percent yesterday on the news.
Boutique research firm Rodman and Renshaw raised its target on Novavax shares to $5 from $4 this morning, suggesting Spain is providing additional validation fo the company’s technology and it may be a foothold for Novavax to register its vaccine in other countries. — Mike Tarsala
Myriad Genetics Inc. Splits, Creating its Subsidiary Myriad Pharmaceuticals Inc. (MYGN, MYRX)
Myriad Genetics Inc. (Nasdaq: MYGN) has established the date for spinning off its subsidiary Myriad Pharmaceuticals Inc. which will be listed on the Nasdaq under the ticker symbol “MYRX”.
Shareholders of Myriad Genetics, Inc. will receive on June 30, 2009, a pro-rata dividend of 1/4 share of Myriad Pharmaceuticals, Inc. common stock for each share of Myriad Genetics, Inc. stock. Any fractional shares will be paid in cash.
It is anticipated that these shares will begin trading “when issued” on NASDAQ on or prior to the record date, with any trades settling within three days after the distribution date.
Myriad Pharmaceuticals will pursue development of unique, best-in-class therapeutic candidates in the areas of cancer and HIV. To facilitate the advancement of these research programs, Myriad Genetics will transfer $188 million to Myriad Pharmaceuticals.
Myriad Genetics Inc. closed on Tuesday down 0.66 (1.86%) with a final trade price of 34.82.
Joshua Sherman
Small Alzheimer's Play Draws Attention After Others Failed
You have probably noticed the recent failure of some once-promising Alzheimer’s Disease treatments. Mryiad Genetics (NASDAQ: MYGN) saw a huge disappointment over this recently.
A small Autralian biotech called Prana Biotechnology Ltd. (NASDAQ: PRAN) is out making the rounds showing how its Alzheimer’s treatment is showing promise.
Today it announced the publication of key research findings with its lead Alzheimer’s Disease drug, PBT2, in an article titled “Rapid restoration of cognition in Alzheimer’s transgenic mice with 8-hydroxyquinoline analogs is associated with decreased interstitial Abeta” in the current edition of the scientific journal Neuron. Its key features are:
- PBT2 profoundly and rapidly improved cognition in transgenic mice.
- PBT2 prevented the formation of soluble Abeta oligomers, the form of Abeta believed to be the most toxic.
- PBT2 substantially reduced the amount of all forms of Abeta in the transgenic mouse brain, over a nine week period.
- PBT2, within hours of oral administration, significantly lowered soluble (interstitial) Abeta in the brain, sampled using in vivo microdialysis.
- Using a well established model for memory formation, PBT2 protected neurons in living brain tissue from the toxic effects of Abeta which impairs the signaling between neurons in Alzheimer’s disease.
The company also noted yesterday that its co-founding scientist recently addressed the U.S. Senate Special Committee on Aging.
This alone isn’t really a stock event in and of itself. But it does still leave some underlying and residual value in Prana as long as its data doesn’t take a nose dive. Its shares are very thin volume in the U.S> and today’s level is $3.63.
Its 52-week trading range is $2.06 to $6.73. Its market cap is listed as $65.9 million, but we would caution that it raised $7 million via a private placement in may to fund its research programs. At that time shares were north of $4.00.
It’s going to take quite a bit longer to know just how well these ongoing research programs develop in the quest to beat or even tame Alzheimer’s. Any drug that makes it to market that can make any impact has a mega-blockbuster potential.
Jon Ogg
July 9, 2008
Disappointment on the Alzheimer's War (MYGN)
Myriad Genetics (NASDAQ: MYGN) is seeing pressure in shares this Monday morning. Shares are down nearly 10% around $43.30 in pre-market trading after the company announced that it plans to discontinue the development of Alzheimer treatment Flurizan. The company had reported that its late-stage trial failed to meet endpoints.
The company had also spent some $60 million in the fiscal year (June) in its development of Flurizan. The company also expects to spend roughly another $8 million to wrap up the program.
Its overseas partner in Denmark was H. Lundbeck A/S (HLUKY), and it also saw a similar drop in active trading.
Myriad isn’t a one-hit wonder as its quarterly revenues were $61.7 million last quarter. But this was a blow and the Alzheimer’s franchise here could have led to a blockbuster potential for the company. As of last quarter, the company had over $300 million between its cash and equivalents and its long-term investments; while its total liabilities were $37.66 million. Unfortunately, its market cap was over $2.1 Billion before today’s price action and its 52-week trading range is $34.35 to $59.18.
Jon C. Ogg
June 30, 2008
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