Carl Icahn Paring Down in Biotech, Sort Of (ANX, BIIB, ENZN, GENZ)

August 16, 2010 · Filed Under analyst calls, Financial · Comment 

Adventrx Pharmaceuticals, Inc. (AMEX: ANX) no longer has to answer to Carl Icahn.  The 13-F filings from Icahn Enterprise hit today and the roughly 4.3 million shares held as of March 31 is not listed in the June 30, 2010 portfolio holdings.

Icahn’s holdings of 3.2+ million shares of Biogen idec Inc. (NASDAQ: BIIB), 704,214 shares of Enzon Pharmaceuticals Inc. (NASDAQ: ENZN) and 2.62 million shares of Genzyme Corp. (NASDAQ: GENZ) appear to be the same as before.

Adventrx Pharmaceuticals’ stock is trading up 1.6% at $1.87 versus a 52-week trading range of $1.50 to $13.00.  This trading range is of course on a post-split adjustment basis after its 1-for-25 reverse stock split went into effect in April.  It seems that Mr. Icahn is no fan of reverse splits either.

JON C. OGG

More Biotech Buyout or M&A Targets (OSIP, VRTX, AUXL, ITMN, HGSI, CELG, DNDN, ENZN, FACT, PBE, XBI)

March 1, 2010 · Filed Under Cancer, Financial, M&A · 1 Comment 

After today’s hostile Astellas offer for OSI Pharmaceuticals (NASDAQ: OSIP), we have investors and traders alike looking for ‘the next takeover target’ in biotech.  Buy now you know that there are many pitfalls in simply looking for biotech stocks to buy because they will be taken over.  We have taken a look through our own recent stocks noted as takeover candidates and even gone through some sites of our partners looking through potential takeover candidates in the space.

Morningstar just last week had a short video with some key potential buyout targets in the biotech space.  It noted Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL), and InterMune Inc. (NASDAQ: ITMN).  Those are all names that have come up as takeout targets before.

But two that are on Morningstar’s list for buyouts are Human Genome Sciences Inc. (NASDAQ: HGSI) and Celgene Corporation (NASDAQ: CELG) for its REVLIMID franchise.  The problem with Human Genome is that it is in the same boat we have addressed on multiple occasions: its size got away from the potential realm of buyers.  And Celgene has just become too big at a $28 billion market cap for most potential buyers to consider it and the sales growth from $2.689 billion in 2009 is expected to go to $3.26 billion in 2010 and $3.75 billion in 2011 per Thomson Reuters estimates.

After looking around elsewhere, we went back to some Dendreon Corp. (NASDAQ: DNDN) rumors from last month we covered.  This was based somewhat on options trading, and we think this company may have to wait for a suitor.  Taking the risk of buying the company out before the FDA approves PROVENGE for advanced prostate cancer is something companies are seeming to shy away from.

Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is another name that comes up routinely in the rumor mill.  We noted this one hitting 52-week highs in January on fresh rumors.

Facet Biotech Corporation (NASDAQ: FACT) has also fought off attempts from Biogen Idec (NASDAQ: BIIB) as a new add-on for its MS franchise.  Biogen has been rebuffed and it supposedly will not have an interest anymore.

ETF investors are chasing up names in the sector as well.  PowerShares Dynamic Biotech & Genome (NYSE: PBE) is up 4% at $18.48 and the SPDR S&P Biotech (NYSE: XBI) is up 4.7% at $58.98.

Jon C. Ogg

Is Enzon a Real-Real Takeover Target, Again? (ENZN, PFE)

January 14, 2010 · Filed Under Cancer, Financial, M&A, R&D · Comment 

Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is not your normal biotech and emerging pharma company.  It is a name that has been tossed around in the rumor mill in the past, and that is the case this week.  That is part of why the stock is at 52-week highs today.  Pfizer Inc. (NYSE: PFE) is the rumored buyer this time around, although other companies have been rumored on and off in the past.  While it is an $11+ stock today, this stock used to trade at an exponential share price and it has nearly a 20-year history as a public company now.

What makes this an interesting ‘buyout story’ is that Enzon already has a special meeting on deck on Wednesday, January 27, 2010, as the date of its special shareholder meeting to vote on the proposed sale of its specialty pharmaceutical business to the sigma-tau Group in Italy.  That sale is valued at $327 million plus royalty payments.  New holders have no say here as the cut-off date for the record-date in order to vote is December 9, 2009.

The new-Enzon will focus on experimental cancer drugs and technology and it currently has a Phase II metastatic breast cancer trial.  The company also has Phase I studies for solid tumors and lymphomas.  Its balance sheet as of September 30 had over $90 million in long-term investments and listed another $110 million in cash and short-term equivalent investments.  It also has $250 million in long-term debt, versus total assets including intangibles of $337.67 million.

Enzon’s market cap today is now north of $500 million in its current market capitalization and its 52-week trading range is $4.70 to $11.37.  Again, this one has been a rumor mill stock on and off in the past.  It also has a pending deal in the works for its specialty pharma business on the table and up for a shareholder vote.

Anything is possible in today’s world, and the question of whether a development-stage and earlier clinical-stage biotech pipeline should be acquired by a Big Pharma company always comes down to need versus desire.

JON C. OGG

Carl Icahn Narrows BioHealth Focus (AMLN, BIIB, ENZN, CYBX, EXEL, FRX, GENZ, REGN)

November 16, 2009 · Filed Under Financial · Comments Off 

Carl Icahn, via his Icahn Capital LP and other entities owned the following drug and biotech or biohealth names.  There may be some overlaps because of more than 1 filing, but here goes:

Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) 12,971,328 shares;
Biogen Idec Corp. (NASDAQ: BIIB) 3,215,051 shares, second filing showed 12,860,205 shares;
Enzon Pharmaceuticals Inc. (NASDAQ: ENZN) 704,214 shares;
Cyberonics Inc. (NASDAQ: CYBX) 2,107,972 shares;
Exelixis Inc. (NASDAQ: EXEL) 2,357,110 shares;
Forest Labs (NYSE: FRX) 1,000,000 shares
Genzyme Corp. (NASDAQ: GENZ) 1,450,800 shares;
Regeneron Pharmaceuticals (NASDAQ: REGN) 2,508,001 shares.

Two smaller positions were omitted.

This is not the smallest amount he has held in biotechs and biohealth plays, but the focus looks narrower than in the past when there were more positions.

JON C. OGG

Enzon & Lessons of Biotech Divestitures (ENZN)

November 9, 2009 · Filed Under Financial · Comments Off 

Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) has entered into an agreement to sell its specialty pharmaceutical business to the Italian-owned company Sigma-Tau Group.  The sale price is quoted as too many different numbers by too many different wire sources, and we wanted to clarify this.  More importantly, this makes for a potentially very interesting case at Enzon.

The company listed in the release that the sale is for $300 million PLUS an additional amount of up to $27 million based on success milestones.  But more might come to the company as Enzon said that it will also receive royalty payments of 5% to 10% on incremental net sales above a 2009 baseline amount from Enzon’s four marketed specialty pharmaceutical products through 2014.

Without knowing what the ‘above a baseline amount’ formally is, there is some guesswork to be made.  Thomson Reuters has the company’s total 2009 sales projected at $193.2 million, and the consensus is calling for about 5% growth to $202.8 million for 2010.  It would be easy to say that these sales could throw another $2 million to $5 million toward the company, but getting anywhere close to a very large figure of $50 million almost seems impossible.

Enzon’s specialty pharmaceutical business includes four marketed products: Oncaspar®, Adagen®, DepoCyt®, and Abelcet®, as well as the manufacturing facility in Indianapolis, Indiana which will be purchased by a US subsidiary of Sigma-Tau Pharmaceuticals, Inc. Sigma-Tau Pharmaceuticals will distribute the products in the US market.

So, what is left at Enzon?  The company has $250 million in long-term debt.  It now lists its cash, cash equivalents, and investments as over $201 million as of September 30.  After the sale of these assets, Enzon’s businesses will consist of its royalties, Peg SN38 and its LNA and PEG technology platforms.  And the company noted that the board is evaluating its options to return most of the value of this sale to shareholders.  It plans to focus on its royalty business, its pipeline, and its technology platforms.  The company said specifically that the transaction “may be deemed to constitute a sale of substantially all of Enzon’s assets” under Delaware law and, therefore, is subject to majority shareholder vote.  The deal is also subject to sigma tau’s receipt of funds under a bank commitment letter and regulatory approval.  Enzon said it sees and expected completion date some time during the first quarter of 2010.

The good news is that this stock is already close to a 52-week high.  The bad news is that Enzon shares are only up 4.6% at $9.39 today and we have only seen 740,000 shares trade hands as of 12:30 PM EST versus an average volume of around 600,000 shares. Last Wednesday this one traded 1,092,600 shares of common stock and its closed up $0.02 at $8.45.

The real value depends upon how successful the remaining operations at Enzon do after this deal is closed.  And that is all a ways out and will have many variables.  It seems that this may be a fair deal for shareholders looking for a return of capital, but it doesn’t look like anyone is rushing in to pay much higher prices for what is left of the company.

Jon C. Ogg
November 9, 2009

Carl Icahn Picking Up Activities in Biotech

January 29, 2009 · Filed Under General · Comments Off 

Now that Carl Icahn was able to score his big coup in shares of Imclone Systems, it is of little surprise that he is out rattling the cages at other biotech holdings.  He has long been a holder and investor in this sector, but he has just over the last week or so increased his holdings in some biotech stocks.

One hike was in Enzon POharmaceuticals (NASDAQ: ENZN), where he took his stake to 7.3% from 6.93%.  The company has nominated an Icahn affiliate for election to the board of directors.

Amylin Pharmaceuticals (NASDAQ: AMLN) also is reviewing a 13D filing as Carl Icahn is appointing 5 members to its board of directors.  His stake went from 7.3% to 8.3%.

Cadus Corp. (NASDAQ-OTCBB: KDUS is one small stock where Icahn is involved and he just marginally increased his stake (very marginally) to 4.966+ million shares.

We have a full list of his biotech holdings from last year.  We suspect Mr. Icahn has been active in others or is about to be.

Jon C. Ogg
January 29, 2009

Carl Icahn Still Active in BioHealth Stocks (ANX, FOLD, AMLN, BIIB, CYBX, EMIS, ENZN, REGN, TELK)

August 15, 2008 · Filed Under General · Comments Off 

Billionaire activist investor Carl Icahn showed his biotech and medical holdings yesterday, with the ownership filing date as of June 30, 2008.  Here is a snapshot of his filed holdings:

  • Adventrx Pharmaceuticals Inc. (AMEX: ANX)3.459 million shares, small position for Icahn
  • Amicus Therapeutics, Inc. (NASDAQ: FOLD) 201,940 shares, small stake and small interest
  • Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) 6.787 million shares
  • Applera Corp
  • Biogen-Idec (NASDAQ: BIIB) 9.948 million shares, which has actually been added to since that date
  • Cyberonics (NASDAQ: CYBX) 2.008 million shares
  • Emisphere Technologies, Inc. (NASDAQ: EMIS) 86,430 shares, tiny position for Icahn
  • Enzon Pharma (NASDAQ: ENZN) 2.457 million shares
  • Regeneron Pharma (NASDAQ: REGN) 2.508 million shares
  • Telik Inc. (NASDAQ: TELK) 4.156 million shares

Jon C. Ogg
August 15, 2008

Enzon Gets Activist Pressure (ENZN)

May 20, 2008 · Filed Under General · Comment 

Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is feeling some pressure from an activist investor today.  DellaCamera Capital Management, LLC, a 5.9% beneficial stakeholder of Enzon common stock, noted that Enzon needs to show much more concrete and immediate action from the Company to increase value.

DellaCamera said it was please to see on May 7 that Enzon had announced a plan to spin-off its biotechnology business, but the group wants Enzon to take the next logical step by exploring all strategic alternatives for the remaining commercial operations (marketed products, royalties, and manufacturing businesses), including the sale of the commercial operations as a whole.  The group also wants Enzon to engage its adviser Goldman Sachs or another investment banking firm to assist in the full review and exploration of unlocking that value.

As far as the rest of the details it outlines, you can see the activist filing here.  That will also show you the shares and call options that DellaCamera collectively owns.

Enzon’s market cap is nearly $400 million after a 2% gain to $8.93 today; and its 52-week trading range is $6.31 to $10.36.

On last look it had $258 million in liquid cash, equivalents, and long-term investments.  It also had some $383 million in total liabilities.

Forcing companies under an activist pressure can work in many cases, but in stretched biotech companies it can be rather difficult to force the water back upstream.

Jon Ogg

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