Is Allos Really a Buyout Candidate? (ALTH, VPHM, GERN, PCYC)
What is the oldest trick in the book when you need a share price up after it challenges 52-week lows? Float a a takeover rumor… Allos Therapeutics, Inc. (NASDAQ: ALTH) is up big on more than triple-normal the trading volume. A fresh article from FORBES got the rumor going that Allos could be a takeover stock based upon a screen from biotechnology analyst Geoffrey Porges of Sanford C. Bernstein. The claim is that 10,000 companies were screened to find a list of 25 that look like possible takeout candidates, and then Porges picked 4 of those which he thinks could get scooped up.
On Allos, Porges noted that it sells the cancer drug Folotyn. While the stock has not performed well ( big understatement), the ultra-orphan cancer niche would give a new team something that would appeal to buyers. Frankly, there was very little meat to the argument.
Three other names floated out there were ViroPharma Incorporated (NASDAQ: VPHM), Geron Corporation (NASDAQ: GERN), and Pharmacyclics Inc. (NASDAQ: PCYC).
Allos was the stock that investors took most to heart in a very short description article today. With about 90 minutes to the market close, shares are trading up 8.3% at $4.31 on more than 3.85 million shares. The 52-week trading range is $3.58 to $8.79 and average volume in the last 90 days has been roughly 1.1 million shares. That $3.58 low in Allos was just seen as recently as August 31.
Unfortunately, Geron is now too embattled in this ban on embryonic stem cells that is not yet resolved; Geron was down 2.3% at $5.15.
ViroPharma was up less than 1% at $13.19 and Pharmacyclics was up 4% at $7.73 on the notation that a buyout could come their way too.
JON C. OGG
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