5 Stocks Down on Wednesday

by: Alex Shadunsky

With the market basically flat on Wednesday, there was a surprisingly large list of big losers led by Icagen (ICGN), after it agreed to be taken out for a price less than market price.

Icagen fell 23% after the speculation of Pfizer (PFE) taking over the company finally materialized but at a lower price than expected. Pfizer, which owns approximately 11% of Icagen's fully diluted shares, will acquire the remaining 8.3 million shares at a price of $6.00 per share. The aggregate transaction value, including the value of the shares currently owned by Pfizer, is approximately $56 million. The companies are targeting closing before the end of the year. The stock closed at $7.75 on Tuesday before news of the acquisition.

Dynavax Technologies (DVAX) tumbled 19% after its Heplisav Phase 3 trial failed to meet its primary endpoint. The company said that said that top-line data from its Phase 3 trial comparing Heplisav, an investigational hepatitis B virus (HBV) vaccine, to a currently marketed HBV vaccine, Engerix-B, demonstrated non-inferiority, superiority and the safety of Heplisav. With respect to the consistency analysis of three consecutively manufactured lots of Heplisav, Dynavax concluded that the study had demonstrated consistency based on the complete immunogenicity data demonstrated by the three vaccine lots over the six months following second immunization. By Geometric Mean Antibody Concentration (GMC), the results met the pre-specified consistency criteria at 12, 18, 24 and 28 weeks, but not at eight weeks, the pre-specified primary endpoint. The GMC of one Heplisav lot was slightly higher than the other two lots, which resulted in not meeting the consistency criteria at week 8.

Riverbed Technology (RVBD) closed 23% lower after it reported disappointing Q2 results. The company said that revenue for the quarter was $170.3 million, up 35% compared to Q2 of last year. Analysts forecasted revenues of $172.9 million. Non-GAAP net income for the quarter was $34.9 million, or $0.21 per diluted share, as compared to non-GAAP net income for Q2 of last year of $19.2 million, or $0.13 per share. The analyst consensus was $0.21. The company said that it experienced softness in the EMEA region, which it attributes to both the regional economy and its own execution. Riverbed added that it expects a strong second half of 2011.

AMAG Pharmaceuticals (AMAG) fell 14% after the company announced a merger. The company and Allos Therapeutics (ALTH) announced that they have entered into a definitive merger agreement under which the companies will combine in an all-stock merger with a total equity value of approximately $686 million. The transaction is expected to result in annual cost savings synergies of between $55 million and $60 million, the majority of which are expected to be realized in the first fiscal year after closing.

Under the terms of the transaction, which has been approved by the boards of directors of both companies, Allos stockholders will receive a fixed ratio of 0.1282 shares of AMAG common stock for each share of Allos common stock they own. Following the consummation of the merger, AMAG stockholders will own approximately 61% of the combined company and Allos stockholders will own approximately 39% of the combined company.

Citi Trends (CTRN) tumbled 12% after it revised its Q2 outlook lower. The company announced that it expects to report a net loss in a range of $0.60 to $0.70 per diluted share vs. the analyst estimate of a net loss of $0.12 per share. Citi Trends’ sales have continued to be much lower than expected. Comparable store sales were down 12% in both May and June and are expected to be down approximately 11% for the full second quarter. Additionally, the weakness in sales has necessitated higher clearance markdowns, further contributing to the quarterly loss. In light of the existing uncertain sales environment, the company will not undertake to estimate results for the full fiscal 2011 year at this time.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.