Seeking Alpha

BofA note spooks Amgen, Ligand investors

  • After opening higher, shares of Amgen (AMGN -2.9%) moved into negative territory this morning and have since traded notably lower on above average volume.
  • The weakness looks to be attributable to BofA/ Merrill Lynch. Here's what the firm had to say regarding a meeting with Celgene's (CELG +1.8%) management: "The most notable derivative commentary was around AMGN's Kyprolis. CELG is hearing increasing concerns from big myeloma centers on CV events."
  • They continue: CELG "has access to the event rate in ASPIRE and believes the full story has yet to fully play out." While BofA says CELG "was not tossing away Kyprolis" they did seem to suggest that "it could be reserved with Revlimid/Dexamethasone for high risk myeloma." ASPIRE combines Kyrpolis, Revlimid, and Dexamethasone.
  • Now, Cowen is apparently out defending AMGN, saying any CELG commentary might have been taken out of context.
  • Also down sharply are shares of Ligand Pharmaceuticals (LGND -5.7%) which receives tiered royalties tied to the use of Captisol technology in the drug. 
Comments (4)
  • Momintn
    , contributor
    Comments (4670) | Send Message
     
    They probably were short the stock. This should be looked into. But of course it won't.
    21 Nov 2013, 07:12 PM Reply Like
  • rgingery23
    , contributor
    Comments (6) | Send Message
     
    Either they were short or wanted to get in at a lower price. Smells like manipulation.
    22 Nov 2013, 01:06 AM Reply Like
  • Rex Graham
    , contributor
    Comments (11) | Send Message
     
    I can only hope the analyst is just naive. Since the analyst is not a professional journalist, this person hopefully/maybe/possibly didn't consider the impact of publishing a description of seemingly official information from the CELG meeting, even if it was flimsy, third-hand and incorrect as far as we know. The Amgen statement (http://bit.ly/1bHl2WU) came out quickly, and crisply states the company's position. At this point I would give the company the benefit of the doubt, and wait to hear the professional assessment by the independent Data Monitoring Committees. They are better sources at this point than --what?-- hopefully just an over-eager analyst who may have overheard something in the restroom.
    22 Nov 2013, 01:14 AM Reply Like
  • JJSchaible
    , contributor
    Comments (110) | Send Message
     
    Of course Celgene (who has a pair of ther own dogs in the MM hunt) will suggest a competitor product should be used with caution. What I find amazing it that this one note resulted in a 12% swoon in the price of $LGND stock. Sure, they get Kyprolis royalties and sell them captisol, but the royalties are rather small as a % of Kyprolis sales and they still sell captisol to a wide array of customers.

     

    Cowen, Roth and now Summer Street are all out defending, which is why $LGND has regained 100% of what they lost.
    22 Nov 2013, 10:09 AM Reply Like
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