Tuesday, April 15, 2014
- Surgical device maker ConMed (CNMD) is exploring a sale of the company, Reuters reported earlier today, after activist investors late last year took issue with its performance and corporate governance.
- The company's advisers, BoA Merrill Lynch and Greenhill, reportedly have contacted orthopedic device makers in recent weeks to gauge interest.
- CNMD has an attractive orthopedics and sports medicine business that could appeal to companies such as Zimmer Holdings (ZMH), Johnson & Johnson (JNJ), Stryker (SYK), Covidien (COV) and Medtronic (MDT).
- CNMD shares gained 7.2%, rallying from a loss before the report late in the session.
- The newly-approved FDA products include Boston Scientific's (BSX) Dynagen Mini and Inogen Mini implanatable defibrillators (ICDs), and its Dynagen X4 and Inogen X4 heart failure devices (CRT-Ds).
- BSX asserts its Mini ICDs are "up to 20 percent smaller by volume and up to 24 percent thinner than competitive devices," and that its X4 CRT-Ds offer "70 percent more pacing options to address high capture thresholds and phrenic nerve stimulation effectively, along with the largest battery capacity in the industry."
- BSX +0.9% AH
- Johnson & Johnson's (JNJ +2%) hepatitis C drug Olysio (simeprevir) blew out Q1 expectations with its $354M in sales. Wells Fargo analyst Lawrence Biegelsen forecasted only $23M.
- Some observers believe that many physicians are prescribing the drug in combination with Gilead's (GILD +2.3%) Sovaldi (sofosbuvir) thereby inflating the full regimen cost to ~$150,000 in the U.S.
- A 12-week course of treatment of Olysio costs $66,360.
- Herbalife (HLF +2.8%) shares bounce back after NY Times' Dealbook reports that the federal inquiry into the company shows no signs of developing into criminal case at this point, no grand jury subpoenas appear to have been issued, and FBI agents have not started interviewing witnesses.
- Reports earlier today suggested NY's AG threw his hat into the ring of investigations over pyramid scheme allegations around HLF.
- Shares of RNA interference firm Tekmira Pharmaceuticals (TKMR -14.5%) continue their slide in early trading. Prices have cratered 60% since the 6x run-up peaked at $31.48 on March 13.
- Although Big Pharma has lost much of its enthusiasm for RNA interference, some analysts remain bullish. RBC Capital has a $30 PT on the stock and Maxim Group has $31. Stifel Nicolaus is a bit more modest with $19.
- Most of the firm's 2013 revenue of $15.5M came from its contract with the DOD for the development of an Ebola treatment ($9.8M) and a milestone payment from Alnylam (ALNY -4.5%) ($5M) that was triggered by the start of the Phase 3 clinical trial for ALN-TTR02 (patisiran).
- New York Attorney General Eric Schneiderman launches an investigation into Herbalife (HLF -2.9%) to determine if its business is a pyramid scheme.
- The state has the fourth highest number of distributors in the U.S.
- Last week the DOJ and FBI started their own inquiries.
- Shares of Halozyme (HALO) are up 7.5% before the open on modest volume as Citigroup initiates coverage on the stock with a Buy rating and $12 PT.
- On April 9 the FDA halted the company's PEGPH20 Phase 2 clinical trial while it investigates potential thromboembolic risks of the drug.
- Yesterday's close was $7.19.
- Two teams of generic Copaxone makers, Sandoz/Momenta and Mylan/Natco ask the U.S. Supreme Court to allow a lower court ruling giving them the green light to market their offerings to take effect until it considers Teva's (TEVA) appeal in October.
- The companies state that Teva failed to show that it would suffer "irreparable harm" if the stay was not issued.
- The Court could announce its decision at any time.
- A ruling on the case might not happen until mid-2015.
- (NVS) (MYL) (MNTA)
- Merck's (MRK) Grastek sublingual allergy pill gets the nod from the U.S. regulator. The company will launch the immunotherapy product later this month.
- It contains extracts of the timothy grass allergen. It was approved in Canada in February and has been available in Europe since 2006 under the brand name Grazax.
- The FDA approved the French firm Stallergene's immunotherapy treatment for five types of grass pollen earlier this month.
- The U.S. market could be as large as $1B.
7:46 AM| 7 Comments
Monday, April 14, 2014
- Citing improved sales activity, CEO David Schlanger says Q1 revenues for WebMD (WBMD +16.5%) will be at the high end of the previously-disclosed $130M - $133M.
- EBITDA will come in slightly above the upper range target of $30.5M.
- 2014 results for revenue ($545M - $575M), EBITDA ($140M - $155M) and net income ($27M - $39M) will all be in the upper half of their projected ranges.
- Average unique visitors per month in Q1 was 174M generating 3.5B page views for the period.
- The European Medicines Agency concludes its inquiry into Roche's (RHHBY +2%) drug safety reporting. The firm allegedly under-reported adverse events for 19 of its drugs.
- It sends its findings to the European Commission for follow through.
- The EC will decide if the matter should be pursued and if financial penalties should be imposed.
- Under "pharmacovigilance" obligations per EU rules, the company could be liable for fines up to 5% of its annual turnover or $14.6B although a penalty this severe is unlikely.
- In yet another example of the recent struggles of biotechs, recent IPO Adamas Pharmaceutics (ADMS +2.8%) exchanges hands for $13.40/share, down 16% from its initial price of $16 and down 22% from its opening day high of $17.24.
- The company generates its revenues from collaboration and licensing deals but has two compounds in development that it plans to sell directly.
- ADS-5102 (amantadine) is a treatment for levadopa-induced dyskinesia, a movement disorder in Parkinson's sufferers after long term exposure to levadopa. A Phase 3 clinical trial will start this year. The company forecasts its NDA submission to happen in the first half of 2016.
- ADA-8704 is a once-daily combination of Namenda XR (memantine HCL) and donepezil HCL for moderate to severe dementia in Alzheimer's patients. The NDA has been submitted to the FDA triggering a $40M milestone payment from partner Forest Labs (FRX +0.1%).
- Revenues for 2012 and 2013 were $37.5M and $71.1M, respectively.
- Net income was $17.7M and $50.9M, respectively.
- CF Ops was $52M and $26.8M, respectively.
- (IPO) (FPX)
- Recent IPO Castlight Health (CSLT -1.5%) trades at $17 today barely above its initial $16 price and down 60% from its opening day high. The stock debuted on March 14 peaking at $41.95 on turnover of 11.5M shares.
- The firm offers cloud-based software that enables large enterprises to manage their healthcare costs. Over the past two years, it has signed up 95 new customers including 24 members of the Fortune 500.
- Revenues for 2011 - 2013 are: $1.6M, $3.4M and $11.7M.
- Net losses for the years are: -$19.9M, -$35M and -$62.2M.
- CF Ops for the same period: -$16.6M, -$29.3M and -$50.1M.
- (IPO) (FPX)
- Recent IPO Dicerna Pharmaceuticals (DRNA +0.6%) demonstrates the value of timing by virtue of its strong debut on January 30. Priced at $15, the new issue gapped up at the open and peaked at $46 on turnover of ~4M shares.
- Shortly thereafter, money flow in the biotech sector turned decidedly negative. DRNA trades today at ~$18.25, down 60% from its opening day high.
- The development stage firm's technology is RNA interference. Its lead products are DCR-M1711 for MYC oncogene-related cancers and DCR-PH1 for primary hyperoxaluria. A Phase 1 clinical trial will start this year for M1711 but won't begin until 2015 for PH1.
- Cash and equivalents at year end were $46.6M, up from $3.7M a year earlier.
- Cash burn was ~$11M in 2013.
- (IPO) (FPX)
- Shares of HMS Holdings (HMSY -11.1%) continue their southward march today on higher volume. Prices are down almost 60% from the August 15, 2012 peak of $37.19.
- Quarterly sales and earnings growth have been in a general decline for a year.
- 393 mutual funds have positions, down from 434 a year earlier.
- In spite of the bearish behavior, six of nine analysts (Yahoo Finance) rate the stock at least Buy. Three rate it Hold.