Seeking Alpha
Long-term horizon
Profile| Send Message|
( followers)

Yesterday, Discovery Labs (NASDAQ:DSCO) announced that the re-validation has been completed for the Biological Activity Test (BAT) for quality control and stability for SURFAXIN (lucinactant). DSCO has submitted a protocol to the FDA, outlining its plans for preclinical studies and expects feedback from the Agency in June. The company affirmed its prior guidance for a NDA resubmission to the FDA during 1Q11.

Hospira (NYSE:HSP) announced this morning that it is extending its $2.20 per share ($145 million) cash tender offer for Javelin Pharma (AMEX:JAV) until 2-June, referencing unsatisfied conditions. JAV disagreed with the statement by HSP and believes the latter is using a DYLOJECT supply chain issue in the UK as the basis for extending the tender offer.

DYLOJECT is marketed in the UK and a NDA is currently pending with a PDUFA action goal date of 10/3/10 under a standard, 10-month review. Last month, JAV terminated an all-stock merger agreement with Myriad Pharma (NASDAQ:MYRX) in favor of the higher all-cash bid from Hospira, which also agreed to the following:

  • provide a working capital facility under which JAV may borrow up to $4.5 million to fund operating activities prior the merger closing
  • $8.3 million for JAV's repayment of the principal and accrued interest incurred under a similar financing arrangement in connection with the terminated all-stock MYRX merger
  • $4.4 million for JAV's payment of the termination fee and related expenses associated with MYRX deal

I am currently holding shares of JAV that I purchased this morning in the $1.60-1.65 range after missing the initial plunge which sent shares briefly below $1.50 on the belief that a supply chain glitch in the UK will not derail or impact the long-term value of DYLOJECT or JAV and the underlying reasons for Hospira's $2.20 per share all-cash bid.

Disclosure: Author holds a long position in JAV

Source: FDA, Clinical Trial News: Discovery Labs, Hospira, Javelin Pharma