Some large Salix Pharmaceuticals (NASDAQ:SLXP) shareholders would rather the company back out of its proposed acquisition of Cosmo Pharmaceuticals and try to sell itself to a larger pharma company like Actavis (NYSE:ACT) or Allergan (NYSE:AGN). Investors controlling at least 25% of SLXP shares are threatening to vote down the deal. A majority must approve it for it to proceed.
They believe that an inversion deal with Cosmo will make it more difficult to find a buyer for Salix, whose market cap is just shy of $10B.
Under the terms of the merger, Salix shareholders would own 80% of a jointly-held Irish unit and Cosmo the rest. If Salix backs out, it would have to pay a relatively-modest $25M break-up fee.
Salix has had a good year in 2014. Shares are up 73% year-to-date.
Barron's Ben Levisohn believes that AstraZeneca (AZN +0.7%) remains a solid target for Pfizer (PFE +0.9%) citing the tax inversion appeal, the ability to free up its ex-U.S. cash and AZN's robust pipeline.
He also believes Actavis (ACT -0.2%) is an equally compelling target due to its lower risk and good fit with Pfizer's Global Established Product unit while offering the tax inversion pathway and access to ex-U.S. cash as well.
The FDA accepts Actavis' (ACT +0.8%) NDA for its priority review-tagged eluxadoline for the treatment of diarrhea and abdominal pain in adults with diarrhea predominant irritable bowel syndrome (IBS-D).
Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
The U.S. District Court for the District of New Jersey rules in favor of Depomed (DEPO -8.5%) in its patent infringement suit against Actavis (ACT +0.5%). Actavis sought approval to sell a generic version of Depomed's postherpetic neuralgia drug Gralise (gabapentin). The court's decision means that Gralise is protected until 2024.
The Federal Trade Commission has given U.S. antitrust approval to Akorn's (NASDAQ:AKRX) acquisition of prescription drug-maker VersaPharm on condition that Akorn sell its rights to make a generic version of the tuberculosis drug rifampin.
Reuters reports that generic drug firm Mylan (MYL -1%) is in advanced negotiations with Abbott Laboratories (ABT +0.1%) to purchase a multibillion dollar portfolio of its established off-patent Europe-based drugs. The transaction is a tax inversion deal that will enable Mylan to redomicile in Switzerland.
Mylan has been in the hunt for foreign assets since its failed attempt to buy Swedish drugmaker Meda AB earlier this year. Its two main competitors, (TEVA +0.9%) and Actavis (ACT +0.5%) are domiciled in lower tax countries.
Abbott will use the proceeds of the sale, rumored to be as high as $5B, to invest in higher growth opportunities.
In response to a request from the FDA, (TEVA) files a citizen petition (CP) on the approvability of generic versions of Copaxone (glatiramer acetate injection). The agency wanted a CP in order to facilitate public review and comment on new scientific data on gene expression. This will allow Teva to comment publicly on the views and opinions of others and will create an administrative record that the FDA may use as a basis for future decisions.
Teva's CP provides new scientific data on gene expression and evidence to support arguments that active ingredient sameness, immunogenicity and bioequivalence in generic offerings are similar but not the same as Copaxone. The company says that competitive offerings should use the same gene expression markers and biological pathways to demonstrate sameness and be evaluated in full-scale clinical trials.
One possible outcome of Teva's aggressive efforts to maintain a moat around Copaxone is that it may give it more empathy for branded drug makers when it goes after incumbent products with its own generic versions.
Oxeo AB files a patent infringement suit in the District Court of Delaware against Actavis' (ACT +0.7%) ANDA for a generic version of Zubsolv (buprenorphine and naloxone). Zubsolv is protected by three patents that do not expire until at least 2019. Oxeo's action comes within the 45-day response window after receiving the Notice Letter from Actavis so there is an automatic statutory 30-month stay of an FDA decision on the ANDA.
Actavis (ACT) files an ANDA for a generic version of Acorda Therapeutics' (ACOR) MS drug Ampyra (dalfampridine) Extended Release Tablets, 10 mg. The company intends to vigorously defend its IP rights and will initiate a patent infringement lawsuit against ACT within the 45-day response period. This will trigger an automatic stay of a potential FDA decision for 30 months.
Four of Ampyra's five patents are valid until at least 2025. It's Orphan Drug status extends until January 2017.
The U.S. District Court of New Jersey finds that Shire's (SHPG) patents protecting ADHD drug Vyvanse (lisdexamfetamine dimesylate) are both infringed and valid in a lawsuit against five would-be generic competitors. The patents are valid until 2023. In order to launch their competing offerings, the generic firms must overturn each of the 18 patent claims (from four Orange Book-listed patents) on appeal.
The ANDA filers are Actavis (ACT), Amneal Pharmaceuticals, Mylan Pharmaceuticals (MYL), Roxane Labs and Sandoz (NVS).