NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST) rose over 70% to a yearly high of $1.70. Its rise was driven by the news that Smith & Nephew Plc (NYSE: SNN) has agreed to buy nearly all of NUCRYST’s assets.
Smithfield Foods Inc. (NYSE: SMD) rose over 9% to a yearly high of $17.34. The pork processor was raised to a “buy” by analysts at Deutsche Bank AG.
Garrett W. McIntyre
Earnings season is seeming to wind down here, but that won’t stop the unusual suspects of key equity events and issues to watch this coming week. We are looking into key issues for the coming week in the stocks of CardioNet, Inc. (NASDAQ:BEAT), CIT Group, Inc. (NYSE: CIT), Genworth Financial Inc. (NYSE: class=GNW), GFI Group Inc. (NASDAQ: GFIG), Human Genome Sciences Inc. (NASDAQ: HGSI), GlaxoSmithKline Plc (NYSE: GSK), Moody’s Corp. (NYSE: MCO), Berkshire Hathaway Inc. (NYSE: BRK-A), RADVISION Ltd. (NASDAQ: RVSN) and Cisco Systems Inc. (NASDAQ: CSCO).
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We have just seen a biotech company named Aldagen, Inc. file for an initial public offering of common stock. This will trade under the proposed stock ticker “ALDH” on NASDAQ. The company is developing proprietary regenerative cell therapies that target significant unmet medical needs.
The joint book-runners were listed as Cowen & Co. and Wells Fargo Securities. No terms were offered on this deal other than that it would raise up to $80,500,000.00 via stock sales. As with most IPO-stage biotech companies, Aldagen is effectively a non-revenue company as it is in the clinical and investigative stages of the biotech cycle.
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Amgen (NASDAQ:AMGN) had a strong quarter. Biotech has been the most active part of the market in terms of trading volume. Amgen is the category’s grandfather.
The company reported EPS of $1.49 for the third quarter of 2009, an increase of 21% compared to $1.23 for the same period a year ago. Adjusted net income increased 16% to $1.518 billion in the third quarter of 2009 compared to $1.308 billion in Q3 2008. Read More
It was just in August that practically every single initial public offering was trading above its IPO price. The market had rallied significantly, and still rallied after that to just this week have a 10,000 handle on the DJIA. Investors started warming to more risk-based capital, and investment bankers were finally able to get deals done. Even waves and waves of secondary offerings were able to be absorbed merely by brokers being able to tell clients they could buy stock at an implied discount to the average price over the few days before. But suddenly, the IPO market has turned out some real dogs with fleas.
Mistra Group (NYSE: MG) priced its offering at $12.50 on October 7. While it traded as low as $12.17, it has escaped the hangman’s file of ‘busted deals’ as it is now a $13.51 stock. The one thing that may have helped was that it priced under an initial range of $14 to $16 per share. Talecris Biotherapeutics Holdings Corp. (NASDAQ: TLCR) also went into the busted category temporarily after hitting a low of $18.01 after a $19.00 pricing. Fortunately, it is up at $19.97 so is also now out of the hangman’s eyes. Still, an 8% gain and a 5% gain in this market might leave some investors feeling lonely. Banco Santander Brasil S.A. (NYSE: BSBR) was a very large IPO of over 500 million shares at an implied $13.40, and this one got out of the “busted IPO” dungeon on Thursday and closed at $13.51 on Friday. Before Thursday it had spent its 6 prior trading sessions as a busted IPO.
Emdeon Inc. (NYSE: EM) had traded above $18.00 briefly after its IPO priced at $15.50 in August. But now the healthcare revenue and payment cycle management solutions provider, which is supposed to be a healthcare winner ahead, closed down at $15.35 on Friday and had been slightly lower during the week. This was effectively a re-IPO as Emdeon had been public before after General Atlantic Partners acquired it and it also received an investment from Hellman & Friedman. It also has ties to James Clark, the Netscape founder and was part of Healtheon.
Roche earnings offered hope to the scores of biotech companies working on H1N1 treatments. The big pharma firm, which makes most of its money from cancer treatments, profited from the spread of the flu.
Roche raised its 2009 sales guidance for the second time this year, after reporting a better-than-expected 9.7% rise in third-quarter sales, mainly driven by orders for its anti-viral drug Tamiflu. Read More
Here we are going into yet another earnings season. We saw Monday how the market has rallied significantly from the March lows and the major indexes are even up in positive territory for the 2009 calendar. The DJIA is up 51% from its absolute lows of March, and the S&P 500 has rallied more than 61% from its absolute lows in March. If you look at the December 31, 2008 closing bell levels, the DJIA is now up about 12.75% and the S&P 500 is now up more than 19% year-to-date.
But almost as always, there are still some key very large and/or very active stocks which have not recovered anywhere close to the same amounts with the overall stock markets. Some of these lagging stocks are Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT). Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS). We wanted to explore the forward values and relative performance, and the consensus estimates based upon Thomson Reuters data. Only two of these stocks have market capitalization rates under $1 billion, and almost all are very actively traded and well known in their sectors.
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Cell Therapeutics, Inc. (NASDAQ: CTIC) has announced what may be a large breakthrough in the fight against cancer. This is a combined test rather than as a standalone treatment, but the result may be a huge step in cancer of the lower esophagus. As many of the ties of one cancer are made to others, you can imagine that the hope might be that this would have other possibilities as well in the fight against other or related cancers.
The company said that a study from Brown University to be presented in the proffered oral session at the Annual Meeting of the International Society of Gastrointestinal Oncology in Philadelphia patients with cancer of the lower esophagus showed a high rate of complete remission when given OPAXIO(TM). This is paclitaxel poliglumex, which is a biologically enhanced paclitaxel. This result was shown when OPAXIO was administered in combination with standard cisplatin and concurrent radiation.
Cell Therapeutics noted that the phase II study was led by Dr. Safran and enrolled 40 patients with pathologically-confirmed and locally-advanced adenocarcinoma or squamous cell carcinoma of the esophagus or gastro-esophageal junction with no evidence of distant metastasis. These 40 patients received weekly paclitaxel poliglumex and cisplatin for six weeks with concurrent radiation. Of the first 28 patients undergoing surgery, all 8 of the 28 with adenocarcinoma have achieved a pathologic complete remission. No patients required a feeding tube, which differs from historical studies using the standard regimen where the large majority of patients require a feeding tube.
The company said that Paclitaxel poliglumex’s selective radiation enhancement preclinical profile is being validated by the high rates of pathologic complete remission, and by low rates of severe regional side effects observed in this phase 2 study. It also noted that the results justify proceeding to a randomized, controlled trial to definitively prove the clinical benefit observed. It also plans to speak with the FDA regarding a potential phase III registration strategy for this indication. Further noted is that this would ‘be the first registration study for a radiation sensitizing agent in this indication.’
As this is a $1.23 stock and has a 52-week trading range of $0.05 to $2.28, you can imagine there will be a lot of trading around this small cap name on Thursday. Additional results and safety data is offered below.
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Sequenom Inc. (NASDAQ: SQNM) is becoming a case study on how to run a medical testing products company into the ground. The diagnostic test maker has more problems other than just the announcement that it fired CEO Harry Stylli and several others after an investigation into the results for its Down syndrome blood test. This was supposed to be the Holy Grail for Down testing, and we still lack a full understanding of what happened.
Board member Harry Hixson will fill in as Sequenom’s interim CEO, and board member Ronald Lindsay will take over as interim CFO and controller. Elizabeth Dragon was senior vice president for research and development, but she is out as well and you have to ask yourself how great a company without a head of R&D can be. Three other employees were fired, and Paul Hawran “resigned” on Friday with another executive. Sure he resigned.
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3Com Corporation (NASDAQ: COMS) rallies over 6% to $5.39 following a positive earnings release on Thursday.
Aspect Medical Systems (NASDAQ: ASPM) rallies over 55% to $11.91 on news that Covidien had agreed to buy the company for $210 million.
Green Mountain Coffee (NASDAQ: GMCR) rallied over 6% today to $75, leading gains among its coffee-vending peers.
BanColombia S.A. (NSYS: CIB) hit a year high of $42.66 on no news but amid a continuing rally in Latin American bank ADRs.
Greenhill (NYSE: GHL) hits a new yearly high of $88.28 as boutique M&A firms continue to benefit from the instability of larger rivals.
Garrett W. McIntyre
Today is an unusually active day for many emerging biotech stocks in the news and we are seeing significant moves in response. We have more detail on each with appropriate links through to more analysis and data at BioHealthInvestor.com or VSInvestor.com:
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is seeing exponential trading volume in stock and options after a 10% rise today.
Dynavax Technologies Corporation (NASDAQ: DVAX) is up over 50%after the FDA removed a clinical hold on its hepatitis treatment.
The fight over the Sepracor, Inc. (NASDAQ: SEPR) acquisition has now gone to the level of a class action status. We noted the very low P/E and multiple valuations yesterday on this one.
StemCells, Inc. (NASDAQ: STEM) traded slightly higher on word that it will soon begin a study with the University of California, San Francisco Children’s Hospital using purified human neural stem cells as a possible treatment for Pelizaeus-Merzbacher Disease.
Pharmacyclics Inc. (NASDAQ: PCYC) was trading up on news that its right offering is oversubscribed.
Oculus Innovative Sciences, Inc. (NASDAQ: OCLS) is trading higher on report that it has been assigned a Medicare HCPCS code for its recently introduced Microcyn Skin & Wound HydroGel.
JON C. OGG
SEPTEMBER 10, 2009
Facet Biotech Corporation (FACT) confirms that it is in receipt of Biogen Idec Inc.’s (BIIB) letter dated September 4, 2009 offering $14.50 per share for all of the outstanding shares of Facet.
Facet shares rocketed 75% to $15.75 after being halted briefly. So far this year, Facet’s shares have traded as low as $6 and as high as $11, so the deal is at a significant premium.
The deal is hostile. Biogen has asked to meet with the Facet board.
Reuters reports that“Biogen Idec said the offer was lower than an initial offer of $15 per share it had made on Aug. 17 to Facet Chief Executive Officer Faheem Hasnain, followed by a letter from Biogen Idec to Hasnain and Facet’s board on Aug. 21 offering that price.”
A recent deal between Facet and Trubion Pharmaceuticals (TRBN) which Facet believed was in its best interests was not taken well by shareholders who have pushed the stock down.
Biogen and Facet are jointly developing a drug for multiple sclerosis and a treatment for solid tumors.
Facet is low on cash and the company’s management has indicated that it may have to bring in new funds in a year.
Douglas A. McIntyre
For more biotech news visit BioHealthInvestor.com
There are dozens of biotech companies and several Big Pharma firms that hope to make money on swine flu treatments, mostly vaccines. They are driven by the WHO’s estimate that nearly a third of the people in the world could contract the disease over the next two years. The really wide big outbreak is supposed to begin in two months, about the time an effective vaccine will come to market. Read More
We have almost a whole new slate of stocks in this week’s round of “The Unusual Suspects” for key stocks traders need to keep an eye on for the week ahead. Activision Blizzard Inc. (NASDAQ: ATVI) was singled out by Barron’s. We ran a bit noting $100 as a possible target for American International Group Inc. (NYSE: AIG), and let’s just say that it was widely read. Allos Therapeutics Inc. (NASDAQ: ALTH) has a key FDA ruling this coming week. Tree.com, Inc. (NASDAQ: TREE) may have its model crushed by none other than Google Inc. (NASDAQ: GOOG). And troubled VeriFone Holdings, Inc. (NYSE: PAY) has earnings due this coming week, right at a key stock inflection point. Exponent Inc. (NASDAQ: EXPO) and Encore Wire Corp. (NASDAQ: WIRE) are S&P index additions as new entrants. Axsys Technologies Inc. (NASDAQ: AXYS) also has a shareholder proxy date this week, and some think a higher buyout price may be in the works. We have run key details and previews for all of these to watch in the coming week.
It usually takes an event or a series of events for biotech stocks to ever look cheap compared to the overall market or even to sub-sectors within health care. They generally trade at higher multiples of revenues and with high P/E ratios, assuming they even have real sales-generated revenues and earnings. But in today’s climate there are many of the large key biotech stocks that are now trading with market-discounts on the P/E ratios and on multiples of revenues as valuation metrics. We ran a full screen for BioHealthInvestor.com and some of the key names that came up with low P/E and revenue multiples were Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), Cephalon Inc. (NASDAQ: CEPH), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), Genzyme Corporation (NASDAQ: GENZ), and PDL BioPharma, Inc. (NASDAQ: PDLI).
There are generally some reasons that have gotten these to cheap screening levels, but some of these are showing significant value for a sector that usually commands a high-premium to most sectors. Amgen has recovered substantially from its woes, and Biogen has as well. Genzyme’s troubles allowed it to make the screen with some key caveats, and the valuation screens elsewhere showed that Cephalon, Cubist, and PDL are worth a look. All of these companies were also well above our screening threshold of $400 million in market cap and average volume of 250,000 shares or more. These all came in above $1 billion in market cap and most never see under 1 million shares per day in average volume.
The full story is available at BioHealthInvestor.com.
-The 24/7 Wall Street Team
Biotechnology Industry Organization (BIO.org) has conducted a survey of 80 investors, analysts, and venture capital executives with Thomson Reuters to preview their opinions of the biotech sector and expectations for 2009. The study was intended to improve communications between biotech executives and investors. There is a problem with the data because it is from December 2008 to January 2009. That was at least before the February and very early-March slump pushed markets into a free fall. Read More
Genzyme Corp. (NASDAQ: GENZ) has taken steps to remedy its situation with the FDA and to remedy its image. Genzyme issued some new guidance with an investor update and said it would discard the majority of the work-in-process material under question. Genzyme had been hitting 52-week lows last week as a result of its woes. Shares closed up almost 5% at $50.54 today, and the after-hours session looks up marginally at $50.70 in thin trading.
Dendreon Corp. (NASDAQ: DNDN) has its quarterly results out, although it is via SEC Filing rather than via a press release. We had this on deck for a report this week and a conference call was set for Tuesday at 11:30 AM EST.
Dendreon’s total operating expenses were $20.929 million and net loss after items of $126.7 million after a $105+ million warrant item. That is not just from operations and it does include many ongoing or new items. That comes to a loss of $1.20 EPS and revenues were listed as $25,000.00.
More importantly, the company disclosed its expansion facilities and the associated costs in Georgia and in California. Dendreon is still expecting PROVENGE to be approved and it gave updates along those lines.
FULL DETAILS of the financial data and updates on Provenge are at BioHealthInvestor.com.
Diabetes is becoming an epidemic in the U.S. and the Western World. The ties to obesity are often direct, so the potential treatments are often directly tied as well. We did a recent dig down for the next $170 billion opportunity for eight different major diseases and conditions, and now we have conducted a much deeper dig down specifically in the field of diabetes over at BioHealthInvestor.com. We have recent and upcoming FDA action and data being presented from Novo Nordisk (NYSE: NVO), MannKind Corp. (NASDAQ: MNKD), Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Eli Lilly (NYSE: LLY), Alkermes Inc. (NASDAQ: ALKS), Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN). There is a mini-race going on between some of the later stage studies from obesity and diabetes candidates from Arena Pharmaceuticals, Inc. (NASDAQ: ARNA), VIVUS, inc. (NASDAQ: VVUS), Orexigen Therapeutics, Inc. (NASDAQ: OREX) and Amylin Pharmaceuticals Inc. (NASDAQ: AMLN). Geron Corporation (NASDAQ: GERN) and StemCells Inc. (NASDAQ: STEM) were noted as two of the stem cell hopes, although stem cells may later rather than sooner.
Generex Biotechnology Corporation (NASDAQ: GNBT), Spherix Incorporated (NASDAQ: SPEX) and Oramed Pharmaceuticals Inc. (OTCBB: ORMP) were all noted in the much smaller or emerging plays. Home Diagnostics, Inc. (NASDAQ:HDIX) and Insulet Corporation (NASDAQ: PODD) have both recently had key events as the interest in test equipment companies continues to remain high.
FULL STORY with much more detail at BioHealthInvestor.com.
We have some very unusual developments that came late in the week that we want you to keep on your watch lists for the coming week. We also included the big events coming down the pipe for next week. Morgan Stanley (NYSE: MS) is of ongoing interest. Genzyme Corp. (NASDAQ: GENZ), Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI), Cubist Pharmaceuticals Inc. (NASDAQ: CBST), Dendreon Corp. (NASDAQ: DNDN), Opexa Therapeutics, Inc. (NASDAQ: OPXA) are all of special interest this next week. Other key issues to watch will be Berkshire Hathaway Inc. (NYSE: BRK-A), Fred’s Inc. (NASDAQ: FRED), GSI Commerce Inc. (NASDAQ: GSIC), Applied Materials Inc. (NASDAQ: AMAT), Wal-Mart Stores Inc. (NYSE: WMT), Leap Wireless (NASDAQ: LEAP), and MetroPCS (NYSE: PCS).
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