Investor

SPOTLIGHT: Silver lining to Big Pharma's cloud?

Fri, 09 May 2008 06:59:53 -0400

Some people see the Big Pharma glass as half-full instead of the alternative. In an investor's-eye look at the industry, Kiplinger ticks off the usual criticisms: patent expirations, tough generics competitors, skyrocketing R&D costs, picky regulators, and election-year political pitfalls. But it also says that beaten-down pharma stocks are so cheap, for some there's no way to go but up. Pharma report

Report: Wilex, GPC nearing merger pact

Wed, 07 May 2008 06:59:58 -0400

Two German biotech companies which share a very big investor are preparing to merge, according to a prominent German newspaper. Wilex and GPC Biotech, both involved in developing new cancer therapies, are each backed by SAP founder Dietmar Hopp. Analysts say that a merger would suit both biotechs. GPC is well funded but doesn't have the late-stage therapeutics that investors love, while Wilex has a compelling late-stage project for kidney cancer. GPC's satraplatin recently failed in a clinical trial, adding to its motivation to merge.

The companies, though, aren't talking about any of it. Complicating the rumors: A third Hopp-based biotech--Heidelberg Pharma--has also been touted as a potential partner for GPC and Wilex. Hopp owns 15 percent of GPC, 28.52 percent of Wilex and 75 percent of Heidelberg. Wilex was a 2005 Fierce 15 company.

Just days ago GPC announced a new round of layoffs, with some of its top execs headed out the door.

- read the AFX report

PDL axes 260 and takes itself off the market

Wed, 05 Mar 2008 06:59:57 -0500

With no "firm" buyout offers coming in, PDL BioPharma has decided to axe 260 workers--on top of the 320 layoffs already announced--and take itself off the market. The latest restructuring round follows the sale of a half billion dollars worth of assets. And after the new pink slips are delivered, PDL will have about 300 workers, a fraction of its peak of 1,100. PDL put itself up for sale last fall after coming under withering fire from investors for its financial performance. To help win back the favor of investors, who drove down the company's share price 28 percent this morning, a four-year low, PDL is considering giving shareholders 50 percent of the royalties coming from approved products.

- see this release
- here's the AP report

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Memory's CEO steps down

Fri, 08 Feb 2008 06:59:55 -0500

Memory Pharmaceuticals' CEO Jim Sulat has announced plans to step down from the position for personal reasons. He will remain the company's part-time CFO. Taking his place for the time being is Vaughn Kailia, who has been appointed interim president and CEO. Kailia is an investor in Memory and a director at the company.

"I will work closely with the management team to review our programs and organizational structure to ensure that they are closely aligned with our goals and that we are well-positioned to achieve our vision for this company. We expect this review to be completed shortly," said Kailia in a statement.

- check out this release for more

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PDL sells off drugs as it counters harsh criticism

Tue, 05 Feb 2008 06:59:54 -0500

PDL BioPharma has auctioned off two marketed drugs and two experimental therapies as it restructures in the face of some severe criticism over how it's been managed. PDL was hammered last year for losing $130 million and moving into a swanky new headquarters building in Redwood City, CA. As a result, it started auctioning off assets. In this new deal, EKR Therapeutics will buy the hypertension drug Cardene and the heart therapy retavase along with an experimental therapy for heart failure and a new formulation of Cardene.

- see the release for more

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PeptImmune land $8.2M in series D

Fri, 18 Jan 2008 06:59:56 -0500

Cambridge, MA-based PeptImmune has garnered $8.2 million in a fourth round of funding. New Enterprise Associates, MPM Capital, Hunt Ventures L.P., Boston Medical Investors and Silicon Valley Bank Capital led the round. The funding will be used to advance clinical development of Peptimmune's multiple sclerosis treatment, PI-2301. Additional funding, and a new, unnamed investor, are expected in the second quarter of 2008.

"The Series D investment will provide the necessary capital to complete two clinical trials by the end of 2008...The completion of these two studies will offer proof of principal for PI-2301, which is a second generation copolymer targeted at treating patients with relapsing and remitting multiple sclerosis," noted PeptImmune's CEO Thomas P. Mathers.

- see PeptImmune's release
- read this Mass High Tech report for more

Reader feedback: FDA approvable letters and China outsourcing

Fri, 11 Jan 2008 06:59:59 -0500

Jim Davis at Sagient Research Systems wanted to follow up yesterday's piece on the trend at the FDA regarding approvable letters and the impact they have on biotech stock prices.

Davis writes: "The price changes that we cited were absolute. So, they take into account both up or down price movement. The stock prices do not get "bid up" around approvable letters as you mention; they in fact usually tank on the news. So, most of the price change we cite is actually to the negative side. (In 2007 16 out of 26 were actually negative price movements, and in 2006 15 out of 22).

The main point to note is that in 2006 the average absolute price change was 21.42 percent and in 2007 the average absolute price change was 12.89 percent. The fact that the stocks did not move as much in 2007 as they did in 2006, suggests that investors are getting more used to approvable letters. (Less price movement equals less surprise). If this does continue in 2008, it is a big change in the investor's mentality."

There's been a lot of email coming out of the recent piece on the cost of scientists in China versus the U.S. and Europe. (The Chinese scientists cost a whole lot less, in case you missed it. And there are some sizeable implications.)

In response to yesterday's article Kathy Hagen writes: "It would also be a mistake to say that research scientists make great money in the U.S. If you look at most life science companies, many of the business or IT support people make more money than the scientists do. Sad, very sad, but true. It has to do with the way we rate comparative salaries and the marketplace, but even beginning to suggest we cut salaries for scientists sticks in my craw.

In addition, we have so much accumulated knowledge in the companies which now exist, that if leadership or investors decide to move the work to China, they would be in essence starting over again for much of the deeply held experiential knowledge the companies now own. There is a huge cost to that as well, in redundant errors, rework, innovation lost, etc. Yes, you could move the companies, but who is moving the knowledge?"

Stan Young writes: "Just suppose that the Chinese regulators, under direction from their government, made the large scale finance decision to be more risk tolerant than those in the US/EU. (All drugs are with risk and the case can be made that progress in finding new drugs is now largely a function of society risk tolerance.) With that in place, research and development will move to China, people will start their own companies, and, over time, the drug industry will move to China."

Thanks for all the feedback. I'd like to hear from more of you, so if you have something you'd like to share, send it in. - John Carroll

Is Carl Icahn out to buy Genzyme?

Thu, 15 Nov 2007 06:59:57 -0500

Rebel investor Carl Icahn (photo) has bought a stake in Genzyme, spurring speculation that he may be preparing to give it the kind of bear hug witnessed by ImClone and Biogen Idec. Only weeks ago Icahn was credited with putting Biogen Idec, one of the biotech industry's biggest companies, into play. Now its investment firm has snapped up 1.5 million shares of the aggressive Genzyme, which has made billions on its reputation for designing new therapies for rare conditions. Icahn has always succeeded best by acquiring shares in companies that he feels are significantly undervalued, and finding one way or another to get the stock price up. For now, no one with either organization is talking--but you can expect plenty of speculation in the months ahead.

- check out the Boston Globe report

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AdvanDX finds $15M in third VC round

Wed, 19 Sep 2007 06:59:54 -0400

France's BioMerieux has signed on as an investor for AdvanDX, a diagnostics company based in Woburn, MA, contributing to a $15 million Series C round for the company. The money is earmarked for R&D and marketing costs. AdvanDX is marketing its PNA FISH test, a rapid diagnostic for blood infections.

- here's the release on the round

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In last act, PDL chief takes out the axe

Wed, 29 Aug 2007 06:59:58 -0400

Mark McDade has already announced that he's leaving his post as CEO of PDL BioPharma at the end of the year. And last night he revealed some very good reasons for hitting the exit. First, the company's late-stage therapy Nuvion, for ulcerative colitis, was axed after researchers harvested some discouraging efficacy data. PDL said in the same breath that it is putting its three approved drugs--Cardene, Retavase and Busulfex, all acquired in the ESP Pharma buyout two years ago--up for sale and is terminating 250 workers as it concentrates its development work on cancer and immunological diseases. A company spokesperson says that more layoffs are coming.

That could be seen as a vindication of sorts for Third Point, a big PDL investor which has directed a stream of scathing reviews McDade's way. An internal investigation has cleared McDade of Third Point's claim that McDade was incompetent and blowing the company's money, but he announced plans to resign soon nevertheless. With this kind of news to deliver, sooner may look a lot better than later.

- see PDL's release on the changes

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