Biotech Stocks: Abbott Sells Lab Division to GE for $8 Billion

by: Centient Biotech Investor
Abbott Labs (NYSE:ABT) sold its laboratory diagnostics business to GE (NYSE:GE) for $8 billion. The sale includes the Abbott Diagnostics Division and Abbott Point of Care, but not Molecular Diagnostics or Diabetes Care. Abbott said the move continues its strategic plan of moving toward innovative and technology-driven products.

In 2006, Abbott bought Kos Pharma, with its lipid management medications, and the vascular business from Guidant. Abbott moved up 73 cents to $53.52.

Sanofi-Aventis (NYSE:SNY) and Taiho of Japan reported positive results from a Phase III test of S-1 for gastric cancer. The drug, administered after surgery and compared to surgery alone, reduced the relative risk of death by 32%. Overall survival at the three-year mark was 80.5% for patients receiving S-1 against 70.1% for patients receiving surgery alone. In June 2006, the data safety monitoring committee recommended that the trial be stopped. S-1 is approved for use in Japan, where the incidence of gastric cancer is higher than in the US.

Sanofi-Aventis licensed the ex-Far East rights to the drug from Taiho in 2006 (paying $360 million upfront), and it is testing S-1 in a Phase III trial aimed at US approval. Sanofi-Aventis was 32 cents higher at $46.19.

Penwest Pharma (PPCO) began a Phase I test of nalbuphine hydrochloride extended release tablets for pain. The formulation uses Penwest’s proprietary TIMERx drug delivery technology to achieve a twice-daily dosing schedule. Penwest climbed 57 cents to $15.30.

Pharmos (OTCPK:PARS) announced its cannabinor pain medication did not meet endpoints in a Phase IIa trial. The drug is an IV-administered, CB2-selective synthetic cannabinoid compound that was being tested in a capsaicin-induced pain model. Pharmos said it would move its focus to an oral formulation of the cannabinor that will be put into a trial for neuropathic pain. The company will also test the drug for nociceptive (response to stimulus) pain. Pharmos took a hit on the news, sinking 11%. The stock dropped 20 cents to $1.61.

Bionovo (OTC:BNVI) has completed enrollment in a Phase II trial of MF101, a prospective treatment for the symptoms of menopause. Full data from the trial are expected in Q2 of 2007. So far, the drug has caused no significant side effects. Bionovo inched up 4 cents to $3.20.

Vanda Pharma (NASDAQ:VNDA) raised $96 million in new cash by selling 3.8 million shares of its stock at $27.29, yesterday’s closing price. Vanda made its IPO in April of 2006 at $10 per share. Investors were pleased with the refinancing; the stock moved up $2.81 to $30.10, an increase of 10%.

Anesiva (ANSV) said a topical anesthetic drug, known as 1207, failed to provide any efficacy in a Phase I trial. The drug was aimed at neuropathic pain. Anesiva will stop any further work on 1207 and turn its attention to two other pain drugs, one in clinical trials, the other in preclinical development. The news had little effect on Anesiva. Its shares edged up 2 cents to $7.75.

Biotech ended the week on a strong note. The Centient Biotech 200™ gained 25 points to end at 4112, a rise of .61% and a new high. The S&P 500 was .29% higher and Nasdaq was up by .33%.

Disclosure: none.