1. The OSIP / Astellas Saga
In a hostile bid, Astellas offered a 40% premium for OSI Pharmaceuticals’s stock or $52.00 per share. It became known that Astellas made its first offer at $55-57 per share in February 2009, which OSIP Board rejected. As of the day of this interview, the OSIP stock is trading around $58. What is the market telling us? What is the investor sentiment? How will things unfold? In this interview Marina Bozilenko, Geoff Meacham, and Joel Sendek discuss the duration of assets in the value equation, arbitrage opportunities, and the possibility of another bidder stepping in.
2. The 2010 Biotech IPO Review, 1st Quarter
What can we say about the health of the IPO market today? Ironwood (IRWD), Anthera (ANTH), and AVEO (AVEO) conducted their IPO in 1Q10. They have all have been completed with a discount of 25-50% to their initial filing range. How are these stocks performing post-IPO? Marina Bozilenko, Geoff Meacham, and Joel Sendek dicuss the impact of buy side leverage, and IPO not necessarily being the best exit for early investors anymore and the current IPO stories.
3. Medivation’s Phase 3 is a Total Bust. Will Dimebon get a Second Life?
Despite great Phase 2 data and a huge Pfizer deal ($225M upfront, $500M in milestones), Medivation’s drug for Alzheimer’s disease, Dimebon, failed in Phase 3. This came as a surprise to many, but “you have to be in it to win it” as Geoff Meacham puts it. Marina, Geoff and Joel also discuss the possible application for the drug in Huntington’s disease, and the possibility of fraudulent Russian data from earlier trials.
4. Xenoport’s Phase 3, Also a Bust. An Eleventh-hour FDA Decision?
Did Xenoport “miss something” in discussions with the FDA, or did this come out of nowhere at the 11th hour? The approval of Horizant (restless leg syndrome, GSK partnership) was denied by the FDA because of pancreatic cancer in rats in the pre-clinical studies. Joel Sendek argues that values will be held in check until companies can bring products on the market and start selling.
5. Good News of the Month : Acorda and Viropharma, Stories with Upside
Intermune, Amylin, Acorda, and Viropharma all saw some good news this past month. Intermune has had favorable panel results for perfinedone. Amylin has had relatively good new on Byetta LAR. Acorda and Viropharma’s product launches are going well, they have moved beyond regulatory risk, and both offer lot’s of upside potential. Marina Bozilenko, Geoff Meacham and Joel Sendek discuss the positive news of this past month.
6. Big Pharma’s Cancer Setbacks, Arrr You Hungry for More Biotech?
Two big cancer drugs failed late-stage trials this month (Roche Avastin and Pfizer Sutent). These trials could have broadened the use of these drugs considerably, and constituted a big win for Pharma. Instead more of the “lost revenue” has to be made up for, with an ever closer patent cliff and a weaker pipeline. Must Pharma still prove they can generate growth from their biotech acquisitions? Should we expect changing behaviors from Pharma, and will there any fallout for Biotech? In this interview by Marina Bozilenko, Geoff Meacham comments on Pharma’s appetite for large companies vs. smaller 1 product “plug’n'play” stories. Joel points out that Pharma may not be better at hedging clinical and regulatory risk, than the investors betting on biotech. From that rationale, they may let others take these risks, and pursue hostile take-overs thereafter.
7. Shareholder Activism : What Carl Icahn Can and Cannot Do with Genzyme
Carl Icahn announced he was planning on nominating for Genzyme’s Board of Advisors, touting his coup with ImClone. Marina Bozilenko asks: what do investors think about his activities? Have we had enough or is he still a hero? Geoff Meacham and Joel Sendek believe there will be more, but each one will be observed on a case by case basis. Biotechnology is very different from other sectors in that you can’t force a trial to be successful, there is no “magic wand”. In the case of Genzyme, the value added of a shareholder activist is not so clear cut, they argue. Still, many companies are not that well managed, and could use restructuring. Joel points out that where shareholder activist may consider a sale at a premium a win, they might not be capitalizing on the full potential of the company – case in point : Acorda.
8. Next Month in Biotech, Events to Look Out For
Marina, Geoff, and Joel review the list of events to watch-out for next month, including: EASL, MEDCAC meeting for reimbursement of dialysis drugs, Viropharma’s analyst meeting, Genentech’s old analyst meeting, a Neurology meeting, the IMS data, and the early ASCO trade.
This interview was conducted at the NASDAQ Marketsite, on March 17th, 2010, in New York City.
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