The $64 per share bid was a modest 9.7% premium over the closing price of New River on Friday. New River was the star IPO performer in the group of biotechs that made their debuts during 2004 (see story). New River overcame its questionable background by using its Carrierwave technology to produce abuse-resistant formulations of controlled substances. In January 2005, Shire signed a big deal to partner with New River on Vyvanse, its abuse-resistant formulation of a well-established ADHD drug. More than half of Shire’s revenue comes from Adderall, another ADHD drug that is soon to lose its patent protection.
Vyvanse, previously known as NRP104, received its second approval letter from the FDA in December 2006. Shire expects to launch the drug in Q2 of 2007; it says the merger will be additive to earnings beginning in late 2009. Shire has a market cap of over $11 billion. R.J. Kirk, the CEO and founder of New River who owns 50% of its outstanding shares (46% fully diluted), will vote in favor of the merger. New River rose 8%, moving up $4.84 to $63.19. Shire avoided the usual penalty paid by the buyer; it gained $3.33 to end at $66.61, an increase of 5%.
BioMarin (BMRN) fell after announcing that 6R-BH4 failed a Phase IIa trial for poorly controlled hypertension. 6R-BH4 is the active ingredient in Phenoptin, which BioMarin will file for approval on in the next quarter. Phenoptin is aimed at PKU, an enzyme deficiency that inhibits early neuronal development. BioMarin said the setback does not affect its use for PKU. BioMarin lost 12%, dropping $2.45 to end at $18.00.
Roche (OTC:RHHBY) out-licensed the ex-US rights for its OTC weight-loss drug Alli to GlaxoSmithKline (GSK), which already owns the U.S. rights. Terms were not disclosed. Recently, Glaxo won U.S. approval for the drug. Alli is a reduced dose formulation of Xenical, a prescription medication which Roche continues to own.
Medarex (MEDX) sold 2.5 million shares of Genmab A/S to raise $150 million. Genmab’s shares have doubled over the past year. After the sale, Medarex will still hold 11% of the outstanding shares of Genmab. Genmab has a license to use Medarex’s UltiMAb technology to humanize antibodies.
Auxilium Pharma (AUXL) said that AA4500 was effective against Dupuytren’s contracture in an early Phase III trial. Dupuytren’s contracture affects the joints in the hand, causing an inability to move or straighten fingers. After injecting collagenase enzyme, the joints of 91% of the patients were within 5% of normal. Currently, the condition is treated by surgery, but the results are no better than achieved by the injection.
Amgen (AMGN) took a 3% hit last week, largely as the result of fallout from concerns about Aranesp, its anemia drug. In a cancer trial in Denmark, Aranesp was given to patients receiving radiation therapy for head and neck cancer. The theory was that Aranesp would increase oxygen flow to the tumor, which would make the radiation more effective. But the treatment saw a 10% increase in the number of patients whose tumors grew worse. The results were published in December, but Amgen did not release them. They were discovered by reports from the trial posted on the web, and Lancet published an article on the results on Friday. Aranesp produced $4.1 billion in revenue during 2006.
Novartis (NVS) slipped after Prudential warned that the drugmaker could face another delay in its effort to win FDA approval of Galvus, its proposed entry in the DPP-4 inhibitor class of diabetes drugs. Galvus is expected to compete with Januvia from Merck (MRK). Originally expected on November 30, 2006, the ruling may be extended from February 28 for another 3 months while the FDA examines skin reactions observed in primates who were receiving the drug. Despite the delay, Prudential believes Galvus will be approved within months.
MedImmune (MEDI) reaffirmed its plan to remain an independent company, even though several hedge funds are recommending that it look at alternatives. David Katz, from Matrix Asset Advisors recently sent his third letter recommending that MedImmune seek a buyer. Carl Icahn also owns a 2.8 million share stake in the company, though he has not been agitating for change.
Edwards Lifesciences (EW) said the FDA sent the company a letter warning about quality control problems at its Irvine, Calif. facility. Edwards makes heart valves and systems for acute hemodynamic monitoring.
Biotech booked a solid profit in its first trading session of the week. The Centient Biotech 200™ gained 15 points to end at 4068, a rise of .34%. The S&P 500 moved .28% higher and Nasdaq was up by .67%.