Top Biotechs With Upside Ahead of Earnings (GILD, AMLN, ARIA, INCY, JAZZ, DNDN, HGSI, ILMN, AMGN, CELG, BIIB, BMRN, LIFE, REGN, AMLN, CBST, ONXX, THRX, VPHM)

October 19, 2011 · Filed Under analyst calls, Cancer, dendreon, Financial, M&A, R&D · 8 Comments 

Earnings season is afoot and we wanted to see how the analysts are ranking the top biotech stocks before these companies begin their earnings reports.  We pulled the top biotech and biohealth related stocks which have market caps of $1 billion and higher and we broke these out into three separate groups by size.  The large-cap biotechs are ranked in descending order by size.  The stocks under $10 billion in market cap and then under $3 billion were broken out in alphabetical order. 

We have compiled some color on selected names, but we also listed the current trading prices, the implied price targets from Thomson Reuters, gave multiples of earnings estimates (from Thomson Reuters) for the forward year (2012 in most cases), showed the trading history and listed a price-to-book ratio.  We did not take any merger news into consideration so that we could just show an as-is model here.

Of the large cap stocks in biotech, Gilead Sciences, Inc. (NASDAQ: GILD)  was the leader.  Several other standouts in the biotechs under $10 billion with a high degree of expected upside were as follows: Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA), Incyte Corporation (NASDAQ: INCY), and Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ).  Other biotechs such as Dendreon Corporation (NASDAQ: DNDN), Human Genome Sciences, Inc. (NASDAQ: HGSI) , and Illumina, Inc. (NASDAQ: ILMN) also screen out as those with the most upside, but that is because of huge share price drops of late.

THE $10 BILLION AND OVER IN MARKET CAP

Amgen Inc. (NASDAQ: AMGN) is the largest of the independent biotechs and it remains stuck like Chuck.  At $56.71, the consensus target is $64.85 and the stock trades at a mere 10-times 2012 earnings estimates.  Its 52-week range is $47.66 to $61.53 and its market cap is north of $52 billion.  It is also worth about 2-times book value.  Implied Upside: 14.3%.

Gilead Sciences, Inc. (NASDAQ: GILD) trades around $40.37 and estimates have a consensus price target of $47.96.  This forward earnings multiple is only about 9.0 now.  The 52-week range is $35.28 to $43.49, the market cap is $31.1 billion and the company trades at more than 5-times book value.  Implied Upside: 18.5%.

Celgene Corporation (NASDAQ: CELG) trades at $64.97 and the consensus price target is about $71.86.  This one is more expensive than many of the established biotech players at more than 15-times forward earnings.  Celgene’s 52-week range is $48.92 to $67.01, its market cap is $29.8 billion, and it trades at nearly 5-times book value.  Implied Upside: 9.8%.

Biogen Idec Inc. (NASDAQ: BIIB) remains the big-cap recovery stock of biotech.  At $102.00, its consensus price target is $110.36, and it trades at close to 16-times forward earnings.  The market cap is about $24.7 billion, the 52-week range is $57.58 to $109.63, and the company is worth about 4-times book value. Implied Upside: 8.5%.

UNDER $10 BILLION IN MARKET CAP

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) trades at $33.05 and analysts have a consensus price target of $36.25. Unfortunately, this one is expected to lose money this year at -$0.31 EPS and next year’s earnings are expected to be -$0.04.  The 52-week range is $21.70 to $34.50, its market cap is $3.7 billion, and it is listed as trading at close to 5.0-times book value. Implied Upside: 9.6%.

Illumina, Inc. (NASDAQ: ILMN) trades around $26.56 and the consensus price target is about $42.90.  The company trades at more than 18-times next year’s earnings estimates, its 52-week range is $25.57 to $79.40, its market cap is about $3.3 billion, and it trades at almost 2.9-times its book value.  Implied Upside: 62%.

Life Technologies Corporation (NASDAQ: LIFE) may be difficult to compare after a huge run higher followed by a recent tank in the share price. It is also on the equipment side. Shares are back down around $37.24 and the consensus analyst price target is now down to $52.66.  The company now trades at barely 9-times forward earnings, if you trust the “E” in that P/E ratio.  LIfe’s 52-week trading range is $35.30 to $57.25, its market cap is about $6.7 billion, and the stock is worth about 1.5-times the stated book value. Implied Upside: 41%.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) trades around $60.00 after a large drop due to a $400 million convertible note offering.  The consensus price target is about $66.14.  The company is also expected to lose as much as $2.00 per share in 2012.  It has a 52-week trading range of $24.29 to $79.90, its market cap is $5.5 billion, and it trades at more than 12-times its previously stated book value.  Implied Upside: 10.1%.

UNDER $3 BILLION IN MARKET CAP

Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) trades around $10.14 and the consensus price target from analysts is $13.44.  The 52-week trading range is $8.03 to $21.23, its market cap is about $1.5 billion, and it is worth about 4.6-times book value. Implied Upside: 32.5%.

ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) trades around $10.25 and the consensus price target is $15.44.  The company is expected to have losses this year and next.  Its 52-week trading range is $3.51 to $13.50, its market cap is $1.35 billion, and the book value at the last report was barely positive.  Implied Upside: 50%.

Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) was another big winner earlier in the year and its shares are now at $36.71 versus a consensus price target of $40.82.  This used to be a value stock but now trades at closer to 22-times next year’s earnings estimates.  The 52-week range is $20.81 to $39.29, the market cap is $2.24 billion, and it trades at just over 3-times book value.  We once considered this a biotech buyout target, but that is in the past. Implied Upside: 11%.

Dendreon Corporation (NASDAQ: DNDN) shares are now around $9.40 and the consensus analyst target has come down all the way to $13.72.  The company has no forward P/E ratio now as it is expected to lose money.  The 52-week range is $7.81 to $43.96, its market cap is down to $1.4 billion, and it is listed as being worth more than 3-times its own stated book value.  Implied Upside: 45%.  Shares have fallen far from grace, so analyst targets and the ratios may all look a bit off.  We also cannot count on estimates since the analysts and the company got this one so wrong on the end demand for Provenge.  Now we have to hope that Provenge can have many more expanded uses outside of prostate cancer or this is a hard one to follow.  What is odd is that Provenge is being tested for other uses and those could reignite interest if more promising data ever comes out.  If not, let’s just say this was a painful lesson in biotech.

Human Genome Sciences, Inc. (NASDAQ: HGSI) is now up around $12.81 after buyout rumors and the consensus target is still listed as being roughly $24.00.  The company trades at about 24-times next year’s earnings estimates, its 52-week range is $10.40 to $30.15, its market cap is now under $2.5 billion, and it is worth about 5.3-times its book value. Implied Upside: 87%.

Incyte Corporation (NASDAQ: INCY) trades around $14.04 and anlaysts have a consensus price target of $22.92 on the stock.  It is expected to lose money this year and next year and the 52-week range is $12.58 to $21.15. While there is a $1.77 billion market cap, Incyte’s is listed as having a negative book value as laibilities exceed assets.  Implied Upside: 63%.

Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) trades around $40.00 after a sharp drop due to an FDA warning.  That may make the figures a bit distorted.  The consensus price target is $54.00 but that does not include the FDA impact.  Jazz trades at only about 10.6-times next year’s earnings estimates. Its 52-week range is $10.51 to $47.88, its market cap is almost $1.7 billion, and the company trades at close to 16-times an implied book value. Implied Upside: 35%.

ONYX Pharmaceuticals, Inc. (NASDAQ: ONXX) trades at close to $34.50 and the consensus target is closer to $44.60.  It is one which is also expected to lose money this year and next year.  The 52-week trading range is $26.17 to $45.90, its market cap is $2.2 billion, and the stock trades at close to 3.5-times its book value. Implied Upside: 29.2%.

Seattle Genetics, Inc. (NASDAQ: SGEN) trades around $20.50, above the $19.15 consensus analyst price target.  The company is expected to lose money in 2011 and 2012. With a 52-week range of $12.29 to $22.37, its market cap is $2.35 billion, and it trades at close to 9-times book value.  Implied Upside: NEGATIVE by -6.5%.

Theravance, Inc. (NASDAQ: THRX) trades around $21.40 and analysts have a price target of $27.43 for the stock.  The company is another one expected to lose money this year and next.  The 52-week range is $16.44 to $28.95, the market cap is $1.8 billion, and it is another one that trades with a negative tangible asset level.  Implied Upside: 28%.

ViroPharma Incorporated (NASDAQ: VPHM) trades around $19.00 and the consensus price target is $23.54. Due to an expected drop in royalties, its earnings are expected to be halved in 2012 versus 2011.  Its 52-week range is $14.39 to $22.16, its market cap is about $1.45 billion, and it trades at about 1.5-times its stated book value with a large portion of assets as intangible assets.  How this one looks on a standalone basis through time is a guess.  Implied Upside: 24%.
*******

On all of these implied upsides, please be sure to do your own research.  We encourage our readers to challenge Wall Street analysts rather than merely following them blindly.  Many cases have been there before were the analysts were just dead wrong.  We also cannot help but notice how the biotech sector often has two very same observations based upon the exact same set of data, yet one analyst will say “Buy” and the other will say “Sell.”

JON C. OGG

Key 2011 ASCO Plays (AGEN, ARIA, BPAX, CELG, GHDX, RXII, SGEN, SNSS, VICL)

June 6, 2011 · Filed Under Cancer, fda, Financial · Comment 

When you hear about the oncology conference of the American Society of Clinical Oncology annual meeting in Chicago each year, you are probably drawn to what may be the next Genentech.  This is the conference that if good cancer and oncology study data can come out then it is likely to be presented here.

We have broken down some of the key ASCO news bits, but these are in very abbreviated summaries in order to keep it from going on and on.   Antigenics Inc. (NASDAQ: AGEN), ARIAD Pharmaceuticals Inc. (NASDAQ: ARIA), BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX), Celgene Corporation (NASDAQ: CELG), Genomic Health Inc. (NASDAQ: GHDX), Geron Corporation (NASDAQ: GERN), Incyte Corporation (NASDAQ: INCY), Oxigene Inc. (NASDAQ: OXGN), RXi Pharmaceuticals Corporation (NASDAQ: RXII), Seattle Genetics Inc. (NASDAQ: SGEN), Sunesis Pharmaceuticals Inc. (NASDAQ: SNSS), and Vical Incorporated (NASDAQ: VICL) are just some of the companies reacting to ASCO and oncology news this morning.

Antigenics Inc. (NASDAQ: AGEN) has disclosed data on from Phase 2 Brain Cancer Study with Prophage Series G-200 (HSPPC-96) showing improved overall survival as a vaccine in glioblastoma multiforme at ASCO.  Trial results showed that 93% of the patients were alive at greater than or equal to 26 weeks after surgery and a median overall survival of 47.6 weeks. Results from pre-defined exploratory analyses showed a median progression free survival of 20 weeks. Measures of immune response post vaccination demonstrated a significant tumor-specific CD8+ T-cell response and also showed an innate immune responses as marked by a significant increase in levels of circulating NK cells.  Unfortunately, shares are now in the red and down almost 5% at $0.964. Update after 4 PM EST: shares closed down 11.4% at $0.895.

ARIAD Pharmaceuticals Inc. (NASDAQ: ARIA) is higher after coming on CNBC saying it is not for sale after presenting data that its sarcoma drug with Merck reduced the risk of the disease progressing. Merck & Co. (NYSE: MRK) is its marketing partner and it plans to apply for FDA and E.U. approval this year.  ARIAD shares are up 1.9% at $8.04 after the open. Update after 4 PM EST: shares closed up only 0.25% at $7.91.

BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX) is more general cancer news than ASCO but important nonetheless…. The company announced the lifting of clinical hold on its GVAX prostate cancer vaccine by the FDA. Manufacturing is complete and planning for a Phase II clinical trial at the Johns Hopkins Kimmel Cancer Center is underway. Shares are up 2.6% at $3.09 after the open.  Update after 4 PM EST: shares closed down 0.3% at $3.00.

Celgene Corporation (NASDAQ: CELG) is not reacting to news that Abraxane has improved the response rate in non-small cell lung cancer patients compared to the generic chemotherapy drug paclitaxel.  It appears that Abraxane did not delay tumor growth or help lung cancer patients live longer in phase III study data.  The company believes that increasing the rate of tumor shrinkage will be enough to get FDA approval in 2012. Shares are down $0.09 at $58.77 right after the open. Update after 4 PM EST: shares closed down 0.7% at $58.46.

Genomic Health Inc. (NASDAQ: GHDX) is supposed to be a winner on the front of personalized cancer care but we are not seeing that today.  It presented 10 New studies in breast, colon and prostate cancers.  The results included a second large validation study confirming the performance of the Oncotype DX colon cancer recurrence score.  The goal is to make a test for biopsy specimens available in 2013.  Shares are actually down 1% at $26.23 right after the open. Update after 4 PM EST: shares closed down 1.6% at $26.07.

Geron Corporation (NASDAQ: GERN) is the stem cell leader and it reported presentations at the ASCO/AACR joint session regarding Telomeres and Telomerase in Cancer are taking place today at the 2011 ASCO Annual Meeting.  Shares are only up $0.01 at $4.28 right after the open.  Update after 4 PM EST: shares closed down 0.9% at $4.23.

Incyte Corporation (NASDAQ: INCY) has two bits of news.  It announces Ruxolitinib (INC424) showed a significant clinical benefit for Myelofibrosis patients in two Phase III studies at ASCO.  The company also announced this morning that it did submit a new drug application for Ruxolitinib in Myelofibrosis to the FDA.  Shares are up 4% at $17.17 right after the open. Update after 4 PM EST: shares closed up 2.3% at $16.90.

Oxigene Inc. (NASDAQ: OXGN) presented updated safety and clinical activity data from the FALCON trial, a stratified randomized, controlled Phase 2 study of ZYBRESTAT in patients with non-small cell lung cancer at ASCO.  An updated analysis conducted approximately 11 months after the enrollment of the last patient in June 2010 showed that the combination regimen of ZYBRESTAT plus bevacizumab, carboplatin and paclitaxel (ZYBRESTAT Arm) was observed to be well-tolerated with no significant cumulative toxicities when compared with the control arm of the study.  Shares are up 16% at $4.96, but it also regained NASDAQ compliance. Update after 4 PM EST: shares closed up 7.5% at $4.59.

RXi Pharmaceuticals Corporation (NASDAQ: RXII) is one of the larger ASCO winners so far.  It showed positive NeuVaxTM Phase 2 efficacy results for the adjuvant treatment of low to intermediate HER2 expressing breast cancer. The Phase II trail did show statistically significant increase in disease free survival at 36 months versus the control group for the planned Phase 3 patient population.  The new timeline is to initiate the Phase 3 trial in the first half of 2012 to accelerate this treatment for women who are not eligible for other HER2 directed therapies.  Shares are up 14% at $1.495 after the open. Update after 4 PM EST: shares closed down 8.5% at $1.17.

Seattle Genetics Inc. (NASDAQ: SGEN) is marginally after presenting SGN-75 clinical data… two patients achieved a partial response, eight patients had stable disease, 11 patients had progressive disease and four patients were not evaluable for response in non-Hodgkin lymphoma patients.  The every-three-week dosing schedule has been selected for further study.  Shares are up 1.5% at $19.23. Update after 4 PM EST: shares closed up 2.2% at $19.37.

Sunesis Pharmaceuticals Inc. (NASDAQ: SNSS) is down after its presentation of its adaptive study design for Vosaroxin Phase 3 VALOR trial in acute myeloid leukemia.  VALOR is expected to enroll 450 evaluable patients at leading sites in the U.S., Canada, Europe, Australia and New Zealand. Shares are down 12% at $2.63 after the open. Update after 4 PM EST: shares closed down 17.9% at $2.47.

Vical Incorporated (NASDAQ: VICL) was initially up 3% after the open but is now flat.  The company showed reports of a positive correlation between the response and survival for completed Allovectin melanoma trials at ASCO.  Update after 4 PM EST: shares closed up 0.25% at $3.87.

Unfortunately, 2011 has so far failed to yield any massive winners.  Our view is that the personalized angle will probably continue to draw the most interest.  Keep in mind that any large or small company comments throughout the conference can make or break a stock.

JON C. OGG

Outlook 2011: 2010 BioHealth Winners Part 1 (ARIA, CHTP, CYCC, ENMD, EXAS, EXEL, FOLD, IDIX)

November 29, 2010 · Filed Under daily · Comment 

2010 has so far lacked all of the juice that drove many biotech stocks exponentially higher in 2009.  For starters, the start of this year was not initiated with a deadly round of panic selling and followed by a major recovery in share prices with a hard V-bottom.  We have also had what feels like fewer FDA blockbuster approvals at the same time that many key drugs expected to be approved were either denied approval outright or were given severe delays.  We wanted to review the companies that are up more than 100% from their lows of the last 52-weeks to see which have prospects out into 2011 or beyond.

Some of the key bioheath stand out names for 2010 are Ariad Pharmaceuticals Inc. (NASDAQ: ARIA), Chelsea Therapeutics International Ltd. (NASDAQ: CHTP), Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC), EntreMed Inc. (NASDAQ: ENMD), Exact Sciences Corporation (NASDAQ: EXAS), Exelixis, Inc. (NASDAQ: EXEL), Amicus Therapeutics, Inc. (NASDAQ: FOLD), and Idenix Pharmaceuticals Inc. (NASDAQ: IDIX).  A second list will post on Tuesday.

Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) is around $3.93 and its 52-week range is $1.94 to $4.49.  The market cap is almost $500 million and average volume is about 1.27 million shares per day.  The company will present updated clinical data from a fully enrolled Phase 1 trial of its investigational, pan-BCR-ABL inhibitor, ponatinib, at the 52nd Annual Meeting of the American Society of Hematology (ASH) being held in Orlando, Florida, December 4-7, 2010. These Phase 1 findings in patients with resistant and refractory chronic myeloid leukemia will be featured in an oral presentation.

Chelsea Therapeutics International Ltd. (NASDAQ: CHTP) has been very volatile this year.  At $5.26, it has a market cap of $258 million and its 52-week range is $1.94 to $7.00.  The company has raised cash by selling equity and it is currently in a phase III hypertension study, a Phase III Parkison’s study, and a Phase II R.A. and a Phase II fibromyalgia study.

Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC) has a long history of price volatility.  Around $1.85, its 52-week trading range is $0.75 to $4.08, although the low close was under $3.00.  The market cap is still under $85 million and average volume is close to 725,000 shares per day.  It is developing oral therapies that target the various phases of cell cycle control for the treatment of cancer and other serious diseases, and it will show Phase II clinical trial results of sapacitabine for the treatment of myelodysplastic syndromes at a poster presentation during the 52nd Annual Meeting of the American Society of Hematology (ASH) in Orlando, on Saturday, December 4, 2010.

EntreMed Inc. (NASDAQ: ENMD) has been wildly volatile after falling from over $10 to almost $2 before its recovery of late.  Around $6.25, its 52-week range is $2.26 to 13.64, its market cap is about $60 million, and its average volume is about 70,000 shares.

Exact Sciences Corporation (NASDAQ: EXAS) focuses on the early detection and prevention of colorectal cancer, and sometimes it feels more ‘exact’ than others.  With shares around $5.71, its 52-week range is $2.43 to $9.24.  The company has a $231 million market cap and its average volume is in excess of 1.3 million shares per day.  From July to October it ran from $3.50 to $9.24 but the $9.00 level was not a closing high.  The company recently raised about $64 million in cash, so the numbers on its market cap may now be different.

Exelixis, Inc. (NASDAQ: EXEL) was out of focus but came back in focus in November after data from a Phase II clinical trial testing XL184 in ovarian and prostate cancer showed that the drug appears to be a help in both tumor types.  It was effectively given back rights to the drug by Bristol-Myers Squibb earlier.  At $5.80, its 52-week range is $2.86 to $8.00 and the market cap is $631 million.  This remains a wild card as it is still actually down in 2010 so far.

Amicus Therapeutics, Inc. (NASDAQ: FOLD) is close to new near-term highs at $4.30 versus a 52-week range of $1.88 to $4.53.  The market cap is roughly $119 million and average volume is only about 30,000 shares.  It was in late-October that it entered into a License and Collaboration Agreement with Glaxo Group Limited to develop and commercialize Amigal, which is currently in Phase III studies for the treatment of Fabry disease.

Idenix Pharmaceuticals Inc. (NASDAQ: IDIX) has also been one that has cut both ways in 2010.  After an 8% drop, shares are down around $4.03, its 52-week range is $1.83 to $6.11, its market cap is just shy of $300 million, and its average volume is just over 400,000 shares per day.  The most recent pop higher came from announcing a $20 million milestone payment from ViiV Healthcare for the initiation of Phase IIb trial of its ’761 for the treatment of HIV/AIDS.

For part two you can read: Outlook 2011, Part II: 2010 BioHealth Winners (AMRN, ILMN, INHX, JAZZ, NBIX, NPSP, THRX, VPHM)

JON C. OGG

Very Few 52-Week Highs in BioHealth (ACOR, ALTH, ARIA, AUXL, KERX, NPSP, PPDI, PPHM, PBE, PRX, SUPG)

April 15, 2010 · Filed Under daily, Financial · 1 Comment 

The market has been putting new highs and new highs and yesterday there were about 1700 stocks (including warrants, ETFs, and other publicly traded non-common entities).  What is interesting is that biotech and pharma stocks are few and far between that are actually putting in new 52-week highs.  Many of the key biotechs are having “issues” and many are very far from 52-week highs.  We compiled a brief list today of the biotechs and related pharma stocks that we saw hitting 52-week highs via name, exchange-ticker, the high, the last print, the change, and the volume:

Read more

High Hopes on Ariad (ARIA, MRK)

March 10, 2010 · Filed Under Uncategorized · Comment 

Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) is seeing elevated trading today after a presentation and ahead of earnings. The difference here is that Ariad’s increased trading is in both the stock and in the bonds.

Joe Kunkle of OptionsHawk.com noted, “implied volatility is 10% higher to 87.8% as shares gain 2.7%, 4,140 calls trading, 4X average, with buyers of April $3 and May $3.50 calls. Shares are at 52 week highs and breaking a long term downtrend, trading as high as $7.50 in 2005. The Company is expected to announce earnings on March 16th and presented at the Cowen Healthcare Conf. This morning. Ariad’s leukemia drug recently received orphan drug status adn is expected to announce Phase 3 results for its soft tissue and bone sarcoma drug, ridaforolimus. Ariad has a $1B+ collaboration agreement with Merck & Co. (NYSE: MRK), potentially making it a takeover target.” (NOON EST)

Ariad’s shares are higher by 4.4% at $3.09 on over 3 million shares with more than an hour to the close. Average volume is only about 1.7 million shares per day and the 52-week trading range is $1.15 to $3.48. Today’s added gain may be as there was another biotech merger as well.

24/7 Wall St.

Contribution from optionshawk.com

ARIAD (ARIA) Up 5% On Court Ruling

August 24, 2009 · Filed Under politics · Comments Off 

ARIAD Pharmaceuticals, Inc. (ARIA) and its co-plaintiffs today announced that the U.S. Court of Appeals for the Federal Circuit has granted their petition for rehearing en banc and has vacated its April 2009 decision in the appeal that Eli Lilly and Co. filed in 2008.

All twelve judges of the Federal Circuit will now rehear and reassess the merits of Lilly’s appeal. This decision by the Federal Circuit concerns a judgment holding Lilly liable for infringement of U.S. Patent No. 6,410,516 licensed to ARIAD by Harvard University, Massachusetts Institute of Technology and the Whitehead Institute for Biomedical Research. ARIAD is the exclusive licensee of the technology and patents.

Douglas A. McIntyre

Interest Growing in ARIAD Cancer Medicine (ARIA, MRK)

August 17, 2009 · Filed Under Cancer, fda · Comments Off 

In the coming weeks, ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) will have some key drug data that could make or break the perception of the company.  There is a mixed opinion on this stock, but it is being well received today after an analyst gave a call that would imply a double in share price.  There have been several issues contributing to the interest here.  Today’s major interest comes as Oppenheimer’s analyst team gave it an “Outperform” rating with a $4.00 price target.

This is ahead of interim data analysis for Ariad’s Phase III trial for ridaforolimus, its mTOR inhibitor therapeutic indicated for soft tissue and bone cancers.  These are aggressive sarcomas and are less common forms of cancer which attack healthy connective tissue.

Oppenheimer believes that this past positive Phase II data and pending Phase III data may lead to an approval late in 2010.  The Phase II data showed almost a doubling of survival rates and Merck & Co. (NYSE: MRK) is a partner on this one and details can be found here.

It appears that some believe that ridaforolimus has the ability to become a blockbuster drug, but the number proposed by Oppenheimer was eventually annual sales of about $350 million.

ACCORDING TO BioMedReports.com…. “Based on my analysis of past outcomes from other successful cancer drugs, I am willing to wager that the Phase 3 results will confirm that rida is a safe and effective oral cancer treatment. From all existing data, there is a high probability that rida will obtain FDA approval after initial review. Absent any regulatory delays, rida could be made available for underserved Americans suffering from soft tissue and bone sarcomas by the end of 2010.  Fingers crossed.”

Some are not so optimistic.  Merriman Curhan Ford issued a SELL rating at the end of July on this one.  Also worth note is that the short interest ahead of the data has seen a massive increase from the Mid-July report to the end of July reports.   Short sellers had the following short interest based on these settlement dates:

Settlement.. Short Interest
7/31/2009.   4,281,466
7/15/2009.   3,992,899
6/30/2009.   3,480,434

ARIAD does have stock options that trade, but that is nearly of no use because of the $2.00 share price.  There is an open interest of over 13,000 contracts for the Jan-2010 $2.50 CALLS.  The problem is that these options are thinly traded and at $2.00 a share it already looks and acts like a call option.

It was earlier this month that ARIAD sold shares at $1.75 and raised approximately $35.6 million after underwriting discounts and commissions and estimated expenses when you consider the overallotment shares that were also included.  Guess who the lead underwriter was on this offering….. Oppenheimer.  Lazard Capital Markets was co-manager.

It was also just in early August that ARIAD announced that its partner had initiated a Phase I/II clinical trial in advanced prostate cancer using its technology:

  • Bellicum Pharmaceuticals, Inc. announced dosing of the first patient in a Phase I/II clinical trial of BP-GMAX-CD1, a novel pharmacologically regulated dendritic cell vaccine for the treatment of prostate cancer. The disease-specific trial is being conducted under a Bellicum Investigational New Drug Application allowed by the FDA in 2008.

Shares are up 3.5% at $2.02 mid-day.  We have also seen 5.8 million shares trade today, well above the 1.8 million on average.  The 52-week trading range is $0.72 to $3.55 and the market cap today is listed as roughly $175 million.

JON C. OGG

BioHealth Companies Keep Raising Cash (MNKD, IDIX, ISPH, ARIA, ONTY, NBY, SOMX, ARNA, OXGN)

August 5, 2009 · Filed Under daily · Comments Off 

The appetite for biotech and emerging pharmaceutical companies to raise cash is almost a never ending line of companies.  We have some offerings today and have seen many offerings and filings from companies to offer shares.  These are just some of the filings and offerings we have seen.

MannKind Corporation (NASDAQ: MNKD) priced a secondary offering this morning of 7,400,000 shares of its common stock, and while the press release did not say what price the deal came at the syndicate group told us this went out at $7.35 per share.  Chairman, CEO, and principal stockholder Alfred E. Mann is purchasing 1,000,000 of these shares from the underwriters, which brought in over $54 million before fees and commissions.  MannKind shares are down 9.5% at $7.37.  Its 52-week trading range is $2.00 to $9.25.

Idenix Pharmaceuticals Inc. (NASDAQ: IDIX) priced a secondary offering this morning of 7,248,936 shares of common stock at $3.14 per share to clear roughly $22 million before fees and commissions.  Its shares are down over 14% at $3.15 today and its 52-week range is $1.86 to $10.10.

Inspire Pharmaceuticals, Inc. (NASDAQ: ISPH) priced a 22.2 million share secondary offering of common stock this morning at a price of $4.50 per share.  This raised close to $100 million.  Share are down 6% at $4.66 and the 52-week trading range is $1.68 to $5.80.

Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) on Tuesday priced its public offering of 19,000,000 shares of common stock at $1.75 per share; the company said net proceeds after fees and commissions was roughly $30.9 million.

Oncothyreon Inc. (Nasdaq: ONTY) announced on Tuesday that it had obtained commitments from several investors for $15 million in a direct offering.  The agreement was to purchase approximately 2.28 million shares of common stock and warrants to purchase approximately 684,000 shares of common stock for gross proceeds of approximately $15.0 million. The company noted that investors agreed to purchase the shares and warrants for $6.5775 per unit with each unit being one share of common stock and a warrant to purchase 0.30 shares of common stock and an exercise price of $6.5775 per share.

NovaBay Pharmaceuticals, Inc. (NYSE: NBY) filed this week with the SEC to offer up to $20,000,000 of any combination of common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon the exercise of warrants.  It market cap is a mere $48 million.

Somaxon Pharmaceuticals, Inc. (NASDAQ: SOMX) filed this week to cover for the resale of up to 10,212,750 shares of common stock (roughly $23 million) from time to time for existing security holders and certain transferees of the selling security holders.  Roughly 5.1 million of these shares were issued in a private placement that closed on July 8, 2009; the additional 5.1 million shares are issuable upon a warrant exercise sold in the private placement which expire on July 8, 2016.  If sold, none of the proceeds go back to NovaBay.

Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) filed on Monday to allow the resale from time to time of up to 28,000,000 shares of common stock by the selling stockholders from a July private placement. We will not receive any of the proceeds from the sale of these shares. If sold, none of the proceeds go back to Arena.

OXiGENE, INC. (NASDAQ: OXGN) filed this week for the resale of up to 10,000,000 shares of common stock from time to time by Symphony ViDA Holdings LLC.  This was via an amendment dated as of July 2, 2009.  If sold, none of the proceeds go back to OXiGENE.

JON C. OGG
AUGGUST 5, 2009

Cash worries we raised about Ariad now look even worse (ARIA, MRK)

July 31, 2009 · Filed Under General · Comments Off 

The cash situation we were worried about at Ariad Pharmaceuticals Inc. (Nasdaq: ARIA) looks even worse after its second-quarter earnings report.

Earlier this week, we raised concerns about the cash burn at Ariad that threatened to derail the optimism for early-stage candidates that were igniting a rally in the stock. We warned about the potential of a secondary stock offering, and how that might hurt the stock price.

See earlier post.

 

Now, partner Merck & Co. (NYSE: MRK) does not want to proceed with a Phase III trial of Ariad’s lead candidate in combination with Herceptin in breast cancer patients. As a result, a $27 million milestone payment expected from Merck in the first half of 2010 likely will be delayed, making an already tight cash situation significantly tighter.

The company used up about $19 million in operating activities in the second quarter, more than the $11.7 million average it used in the previous five quarters. Now, the company has about $39.5 million in cash left.

Even at a conservative cash burn, it’s likely enough for only the next three quarters. A secondary offering or some type of cash-raising now appears much more likely.

The company is still moving ahead with its Phase III trial of its lead candidate ridaforolimus for the treatment of sarcoma. Data is expected in the first half of 2010. But now, it appears that Ariad will have to do something to raise cash ahead of that trial data.

Other than a secondary, the company could theoretically get funds if it were to start a partnership for its less-mature candidates such as the investigational compound that showed anti-cancer activity in drug-resistant blood cancer patients earlier this week. But that particular candidate is fairly early stage; prospective partners might want to see more data before jumping in.

Another possibility is that the company taps a credit facility from Merck that could help keep it going, although living on credit probably isn’t likely to inspire much Wall Street confidence. Also, that credit facility only applies to what they are developing in partnership, so it could not be used for other candidates or for general corporate purposes.

Then there’s always a secondary — something that would have been more appealing to the company a few days ago, when the stock was juiced. — Mike Tarsala

Positive Ariad data may soon have Wall Street asking, what's next?

July 27, 2009 · Filed Under General · Comments Off 

Ariad Pharmaceuticals Inc (Nasdaq: ARIA) shares are up more than 40 percent on on more than 10 times normal volume after it released positive Phase I trial results of an investigational compound that showed anti-cancer activity in drug-resistant blood cancer patients.

Now that the shares are up so strongly, the Street may soon be asking about the next catalyst for the stock.

The trouble is, there doesn’t appear to be one on the horizon for the rest of the calendar year. If there is one, it might be a possible secondary stock offering — something that may be all the more likely now that the shares are worth much more than they were a few hours ago.

Ariad is not in a severe cash crunch. But it has used an average of about $11.7 million a quarter over the past five quarters to fund operating activities. At the end of the first quarter, it had about $50 million in cash on hand, not counting $10 million it was expected to receive in the second quarter.

The trouble is that the company announced on its last earnings conference call that a $27 million milestone payment from partner Merck & Co. (NYSE: MRK) would be delayed until the second half of 2010. All told, the company appears to have enough to wait out its Merck milestone payment, but not very much more.

A secondary offering may help provide a cushion for development of its lead candidate.

The next big data catalyts for Ariad are not expected until 2010, when it begins to show additional data for its lead candidate, called ridaforolimus, a potent mTOR inhibitor for the treatment of solid tumors, including sarcomas.

The company is expected to release a second interim analysis in a Phase III trial in sarcoma patients in the first quarter of 2010. The interim analysis may or may not include clinical data. The company is expected to follow up with trial data later next year.

The Phase I trial Ariad announced today were promising. Of the 23 chronic myeloid leukemia (CML) patients studied, 19 of them in the four highest dosing groups, are still on the drug and are not seeing disease progression.

What is particularly attractive is that all patients were previously treated with other drugs for chronic myeloid leukemia.

With that out of the way, there now could be a data lull ahead. And with the stock more than doubling since March, the February highs near $2.86 may prove to be stubborn share resistance — Mike Tarsala.

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