Canaccord’s Salveen Richter has maintained a SELL rating with a price target down at $12.00 per share.  This is important because Amylin closed at $25.73 and the 52-week trading range is $8.03 to $26.87.  The report is based in part on the notion that Bydureon sales are off to a slow start that was disclosed in the company’s earnings report yesterday.  The report was called a weak earnings report with Bydureon revenue of only $6.9 million versus $10.4 million expected.

The report may be very much of a standout because some of the companies which have been named as likely and/or potential bidders are Bristol-Myers Squibb Company (NYSE: BMY), Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), Sanofi (NYSE: SNY), and Takeda.  We have also wondered perhaps whether or not Pfizer Inc. (NYSE: PFE) or Novo Nordisk A/S (NYSE: NVO) could be among the possible buyers, but these two seem to be dismissed elsewhere as likely buyers.

The report does caution about a floor from the buyout speculation: “That said, continued speculation on the company’s takeout potential will likely set a floor on Amylin shares at current levels, barring a potential E.U. partnership.”   Other notes as follows: Bydureon captured 5.9% of the GLP–1 market… Bydureon is being impacted by competition, healthcare reform and reimbursement/access… AMLN Q1/12 total revenue of $153.7 million was under consensus of $162.1 million… it is lowering FY12 Bydureon revenue estimate to $133.9 million from $209.5 million… firm is increasing its non-GAAP SG&A expense to $395.5 million from $356.3 million… firm is lowering FY12 GAAP EPS estimate to -$1.68 EPS from -$1.09 EPS.

Canaccord Genuity’s valuation puts its 12-month price target at $12.00 and it is based upon 20-times the firm’s fully taxed and fully diluted GAAP earnings estimate for 2016 of $1.55 EPS that is then discounted back to 2012 at a rate of 28%.

What is interesting is that the Thomson Reuters consensus target is only $18.10, so there is quite a takeover premium built into the stock.  Amylin may get acquired or it may not.  This is a bold call considering that the company even recently announced that Carl Icahn voluntarily dismissed his suit against the company.  It would seem that Carl Icahn believes that a premium buyout is headed Amylin’s way.

JON C. OGG

Just this week we saw a Dow Jones report calling for DJIA components to boost their dividends by about 8% on average in 2012, and J&J is announcing a hike of 7% to its quarterly payout.  J&J was one of the predicted dividend hikes in that report. The prior quarterly dividend of $0.57 per share is rising up to $0.61 per share per quarter.

The company is talking up its 2011 results, its strong financial position, and confidence in the future.  It is the 50th consecutive year that it has raised the payout.  With a $64.70 share price, the new dividend yield comes to almost 3.8% if you round higher (from 3.77%).

Today’s dividend hike makes no mention of J&J’s quality control issues and product recalls that it is still working through. The company issued a separate release noting that Alex Gorsky is formally taking over as CEO and that Bill Weldon will remain in place as a non-executive Chairman of the board of directors.

Gorsky’s ”outline for the future” has a lot of good buzzwords in there… adapt faster than ever… be more agile than ever… new thinking… more cost-efficient ways of delivering health care… an expanded global presence and mindset… working smarter and harder.

Both Pfizer Inc. (NYSE: PFE) and Merck & Co. (NYSE: MRK) have raised their dividend in recent quarters for the first time in years.  J&J’s 3.8% indication compares to dividend yields of 3.9% for Pfizer and 4.4% for Merck & Co.  That may lag in yield and the company may still be working through some issues, but 50 straight years of dividends hikes is rather impressive even if the yield lags.

JON C. OGG

The lawsuit was seeking an extension of the deadline to nominate directors at the 2012 annual meeting of shareholders.  The news may include Icahn Enterprises, L.P. (NASDAQ: IEP) as well.

Icahn said, “The decision to discontinue our lawsuit seeking to extend the director nomination deadline was the result of discussions I had with Daniel Bradbury, Amylin’s chief executive officer, that we agreed would not be publicly disclosed.”

What is interesting is that this is in the middle of a bidding process.  This drives up the price of poker or it at least takes away one more hurdle that a would-be buyer might have had.  It is unlikely that any buyer would have not bid just because Carl Icahn was involved.  After all, everyone knows that Carl Icahn cares about three real goals here: getting a good price, getting a good price, and ultimately on getting a good price.

The note also said, “Mr. Icahn reiterated that he continues to strongly believe that the company should be sold at this time.”  Duh!

Amylin shares are up 3.5% at $26.45 and today is a new 52-week high against a prior range of $8.03 to $26.25.

JON C. OGG

Ardea Biosciences, Inc. (NASDAQ: RDEA) is now worth about $1.2 billion and the stock’s prior 52-week high had been $29.06. Now shares are up at $31.58 and AstraZeneca buys a gout and cancer pipeline here.  The problem is that no one is expecting big earnings nor even big sales any time soon.  Thomson Reuters has estimates of -$3.64 EPS on only $13.4 million in revenue in 2012 and -$1.89 EPS on almost $56 million in 2013.  Ardea has just over 100 employees and its pipeline includes two gout treatments and two cancer treatments (one for pancreatic cancer and one for primary liver cancer.

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) now has a $3.8 billion market capitalization rate.  With a fresh new diabetes drug approval and with prior speculation of a super-premium buyout, this one already has a lot of premium built in.  Shares went from about $11 to more than $17 early in 2012 and then from about $16 to over $24 over the last month before settling down around $23 of late.  Now there is talk that it has several interested bidders.  Amylin’s ongoing pipeline is concentrated around diabetes and obesity but its main products are BYDUREON and BYETTA.  Amylin is also expected to lose money in 2012 and in 2013, but its sales were $650 million in 2011 and are expected to rise to $688.4 million in 2012 and $852.9 million in 2013.

Bristol-Myers Squibb Company (NYSE: BMY) reportedly made a bid for Amylin already, and newer reports have Merck & Co. Inc. (NYSE: MRK), AstraZeneca PLC (NYSE: AZN), and Takeda all lined up as would-be potential acquirers.

It is very difficult to get an apples to apples comparison here when you consider that one company is in the development and clinical stage and the other is already in the product commercialization stage.  Ardea is of course a much larger unknown that Amylin.  Its price and market capitalization also reflect this.

JON C. OGG

One potential buyer is Sanofi (NYSE: SNY), the Paris-based drug company that is developing a similar treatment for diabetes. Amylin ended a long relationship with Eli Lilly & Co. (NYSE: LLY) last November, but still owes Lilly payments of $1.2 billion over the next several years. AstraZeneca plc (NYSE: AZN) is another drug maker believed to be on the look-out for an acquisition as is Merck & Co. Inc. (NYSE: MRK).

Amylin’s diabetes drugs Byetta and Bydureon are both approved for use in the US. Byetta is a twice-weekly injection for Type 2 diabetes, while Bydureon, which was approved only in January, is a once-a-week injection for the disease. Diabetes affects some 300 million people worldwide and 26 million in the US alone. Drugs to combat the disease could be enormous sellers.

The market is very happy with the news from Amylin. Shares are up more than 10% in the pre-market this morning, at $25.15 in a 52-week range of $8.03.25.84.

Paul Ausick

In addition, ViroPharma has received a notification that the Federal Trade Commission is conducting an investigation into whether the company has engaged in unfair methods of competition with respect to Vancocin.

Vancocin is indicated for the treatment of C. difficile-associated diarrhea and is also used for the treatment of enterocolitis caused by Staphylococcus aureus (including MRSA).  Vancocin is contraindicated in patients who have experienced a hypersensitivity to vancomycin.

ViroPharma also noted that the FDA informed the company that the recent supplemental new drug application  for Vancocin which was approved back on December 14, 2011 would not qualify for three additional years of exclusivity.  The ruling was based on the agency’s assertion that in order for an sNDA for an old antibiotic such as Vancocin to be eligible for a grant of exclusivity, it must be a significant new use or indication.  Furthermore, the FDA indicated that it is approving three abbreviated new drug applications for generic versions of vancomycin capsules.

The company is going to try to fight it out and noted that it intends to file a complaint in the United States District Court for the District of Columbia.  In the complaint the company will seek an injunction to set aside the FDA’s approval of ANDA’s for generic versions of Vancocin.  The courts had previously dismissed ViroPharma’s lawsuit on the procedural basis of standing, but ViroPharma is claiming that the substance of the company’s bioequivalence arguments and the arguments regarding Vancocin’s eligibility for exclusivity have not been litigated before the Court.

Investors are shooting first and asking questions later.  Shares closed at $28.61 against a 52-week range of $14.62 to $33.17, but shares are down over 19% around $23.00 in active pre-market trading.

JON C. OGG

Galena develops cancer drugs and plans to use the net proceeds from this offering for:

working capital and other general corporate purposes, including the Phase 3 NeuVax(TM) (E75) PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) clinical trial, Phase 1/2 clinical trials of Foliate Binding Protein-E39 (FBP) and a planned Phase 2 trial of NeuVax in combination with Herceptin(R) (trastuzumab; Genentech/Roche).

Shares are down -14% at $1.61 in a 52-week range of $0.36-$3.54.

Allos markets a lymphoma treatment, Folotyn, that complements Spectrum’s Zevalin by treating a different form of the disease. Folotyn generated $50 million US sales last year, and the drug is currently being reviewed for approval in Europe.

Spectrum will finance the acquisition from cash on hand and its revolving credit facility. The company said it does not need to issue new shares to finance the deal, which is expected to close in the second quarter.

Spectrum also announced this morning that its experimental bladder cancer drug failed to meet late stage trial targets. The company said that it would request a meeting with the US FDA to “discuss further steps.”

Spectrum’s shares are down about -9.8% in the pre-market this morning at $11.01 in a 52-week range of 6.94-$16.00. Shares of Allos are up more than 27% at $1.82 in a 52-week range of $1.25-$3.28.

The two companies are working on a new once-a-day drug, Relovair, to treat asthma and chronic obstructive pulmonary disease (COPD). The drug is important to Glaxo as a replacement for its Advair drug which has lost its patent protection in the US and will lose it next year in Europe.

GSK and Theravance are gearing up to file for approval use as a treatment for COPD in the US and Europe for Relovair later this year. Approval for the drug’s use against asthma is also on track for this year, but a US filing may be done later due to the stringency of US rules on once-daily drugs.

Theravance shares are up nearly 16% today at $22.57 in a 52-week range of $12.91-$28.95.

Keryx also noted that it has $31 million in cash and plans to complete a Phase 3 study on an end-stage renal disease treatment in the fourth quarter. The company also plans to file a new drug application for the drug, called Zerenex, “shortly thereafter.”

The company’s stock is getting thrashed in the pre-market, down about -55% at $2.28, only a penny higher than its current 52-week low.