Biotech Day In Review: MedImmune Puts Itself Up For Sale

by: Centient Biotech Investor
MedImmune (MEDI) has engaged Goldman Sachs to find a merger partner. The company has been under pressure from investors, who say the company is not doing enough with its assets.

David Katz of Matrix Asset Advisors and Carl Icahn have both been after the company to seek a buyer. MedImmune produces FluMist, an inhaled flu vaccine. MedImmune climbed 15% on the news, rising $5.79 to $43.63.

The National Kidney Foundation reduced its target hemoglobin levels for patients on dialysis. The new target will be 11 to 12 gm/dl, which is lower than the previous level of 11 to 13 gm/dl. Dialysis patients receive EPO drugs to raise their hemoglobin and high levels of the EPO drugs have been associated with cardiovascular problems.

The move was anticipated, and it was also expected to hurt the sales of Aranesp and Epogen from Amgen (NASDAQ:AMGN), which produced $6.6 billion in revenue in 2006, and Procrit from Johnson & Johnson (NYSE:JNJ), which had $3.2 billion in sales last year. Investors were apparently happy that the news was not worse: Amgen rose $1.30 to $57.64 and J&J was up 2 cents at $61.94.

Indevus (IDEV-OLD) set the exchange ratio for its takeover of Valera (NASDAQ:VLRX). Indevus will exchange 1.1337 of its shares for each one of Valera, and Valera shareholders will receive three contingent stock rights for one share of Indevus at $1, $1 and $1.50 each, contingent upon Valera reaching certain milestones. Indevus markets Sanctura for overactive bladder, Delatestryl for male hypgogonadism and other drugs. Valera is developing hydrogel-based implants for urology and endocrinology diseases and disorders. Indevus was 8 cents higher at $7.14 and Valera moved up 34 cents to $8.67.

Idenix (NASDAQ:IDIX) said that valopicitabine failed two Phase IIb trials for hepatitis C. Valopicitabine was given together with Pegasys, but only 53% of the patients who were receiving their first treatment for the disease responded to the regimen. In a second trial, the combination was given to patients who had been treated before. No patients showed any response in this test. Despite the results, Idenix pronounced itself “pleased” with the data, saying that it would continue to test valopicitabine in combination with other drugs. Investors were not pleased, and they pushed Idenix 9% lower. It fell 73 cents to $7.42.

(NASDAQ:AFFY) reported Hematide was effective in a Phase II trial in patients who switched from a three-times weekly regimen of Epoetin Alpha to a once-a-month regimen of Hematide. The patients were receiving dialysis and had low hemoglobin levels. Affymax was off 20 cents at $32.00.

DOR BioPharma [DORB] rebuffed a buyout bid from Cell Therapeutics (NASDAQ:CTIC), saying the price was inadequate. In January, Cell offered to buy DOR in a stock transaction that would have given 20% of the resulting company to DOR shareholders. Separately, DOR signed a letter of intent with Sigma-Tau Pharma of Italy giving Sigma-Tau exclusive rights to negotiate for its lead product, a treatment for the complications of bone marrow transplants. Sigma Tau bought $1 million of DOR stock at 25 cents per share and paid $2 million in cash. DOR moved up 3 cents to $.65, but Cell Therapeutics dropped 19%, falling 35 cents to $1.48.

Novartis (NYSE:NVS) sold its Gerber baby food business to Nestle for $5.5 billion in cash. Novartis registered a modest 41 cent gain, closing at $55.50.

Coley Pharma (COLY) licensed its VaxImmune vaccine adjuvant to Merck (NYSE:MRK) in exchange for $4 million upfront and milestones that could total up to $33 million. Merck will also pay royalties on any approved drugs that include the adjuvant. Merck intends to incorporate VaxImmune into vaccines for infectious diseases and Alzheimer’s. Coley rose 22 cents to $10.20.

Biotech had a very strong day, outpacing the broad market indexes. The Nasdaq Biotech Index rose 1.7%, while the S&P was higher by .62% and Nasdaq gained .85%.

Disclosure: none.