4 Potential Takeover Targets In Biotechnology And Drugs Industry

by: StockPandit

2012 is so far the best year for Biotechnology and Drugs industry. So many stocks surged in the last two months based on clinical trial results, U.S. Food and Drug Administration (FDA) approval, FDA Advisory Committee's recommendation, European commission approval, recommendation from independent committees, partnership with big pharmaceuticals, acquisitions and so on. Below is the list of four biotechnology companies that have the potential to be taken over by large pharmaceutical companies.

BioSante Pharmaceuticals, Inc (BPAX): BioSante is a specialty pharmaceutical company focused on developing products for female sexual health and oncology. BioSante´s products include LibiGel® (transdermal testosterone gel) for the treatment of female sexual dysfunction (FSD), specifically hypoactive sexual desire disorder (HSDD), which is in Phase III clinical development. BioSante also is developing a portfolio of cancer vaccines, with 17 Phase I and Phase II clinical trials currently on going. Four of these vaccines have been granted Orphan Drug designation by the U.S. Food and Drug Administration. BioSante´s other products include a testosterone gel for male hypogonadism, for which a New Drug Application (NDA) was approved by the FDA on February 14, 2012, which is licensed to Teva Pharmaceuticals USA, Inc., and the Pill-Plus™, an oral contraceptive in Phase II clinical development by Pantarhei Bioscience B.V. BioSante´s first FDA-approved product is Elestrin™ (estradiol gel) indicated for the treatment of hot flashes associated with menopause, marketed in the U.S. by Jazz Pharmaceuticals, BioSante´s licensee

On March 5, 2012, BioSante announced that publication of results from a Phase I dose escalation clinical study that show its GVAX Prostate cancer vaccine in treating metastatic castration-resistant prostate cancer patients (mCRPC) in combination with ipilimumab (Ipi; Yervoy; BMS), resulted in 53 percent of patients achieving at least stable disease, with two patients showing clear regression of metastases. In addition, 23 percent of patients in the higher dose cohorts had confirmed partial PSA (prostate specific antigen) responses of greater than 50 percent from baseline.

Stephen M. Simes, BioSante´s president & chief executive officer said

We are very excited by the positive results of this prostate cancer study notably combined with recently reported excellent results in pancreatic cancer. This is encouraging news concerning the potential for GVAX cancer vaccines, especially when combined with other anticancer immunotherapies like Ipi, for treatment of a disease that can be so devastating for so many patients.

Biosante has a market cap of $81.62 million and currently trading around $0.742. Biosante has total cash of $69.60 million and total debt of $20.48 million. Considering their cash position, FDA approved drug, expected payments on Bio-T-Gel from Teva and other drugs in the pipeline, companies like Teva Pharmaceutical Industries Ltd (NYSE:TEVA), GlaxoSmithKline plc (NYSE:GSK), Pfizer Inc (NYSE:PFE), Abbott Laboratories (NYSE:ABT) can takeover Biosante even with more than 100% premium to its current share price.

More information about Bio-T-Gel FDA approval

More information about March 15, 2012 news release

Dendreon Corporation (NASDAQ:DNDN): Dendreon Corporation is a biotechnology company whose mission is to target cancer and transform lives through the discovery, development, commercialization and manufacturing of novel therapeutics. The Company applies its expertise in antigen identification, engineering and cell processing to produce active cellular immunotherapy (ACI) product candidates designed to stimulate an immune response in a variety of tumor types. Dendreon's first product, PROVENGE® (sipuleucel-T), was approved by the U.S. Food and Drug Administration in April 2010. Dendreon is exploring the application of additional ACI product candidates and small molecules for the potential treatment of a variety of cancers. PROVENGE is an autologous cellular immunotherapy for the treatment of asymptomatic or minimally symptomatic metastatic castrate resistant (hormone refractory) prostate cancer. PROVENGE is made using cells from a patient's own immune system, so it cannot be warehoused like many other drugs and requires specialized manufacturing facilities.

On February 27, 2012, Dendreon Corporation net loss of $337.8 million, or $2.31 per share for the year ended December 31, 2011. The share plunged from $14.86 to $11.11 in two days. On March 8, 2012, Janssen Research & Development, LLC announced that it has unblinded the Phase 3 study of ZYTIGA® (abiraterone acetate) plus prednisone for the treatment of asymptomatic or mildly symptomatic patients with metastatic castration-resistant prostate cancer (CRPC) who have not received chemotherapy. After the announcement, Dendreon's stock plunged further to $10.08 per share.

Dendreon Corportation has a market cap of $1.55 billion and currently trading around $10.08. DNDN has total cash of $538.62 million and total debt of $568.92 million. Considering the recent share price and FDA approved Provenge, Dendreon is a potential takeover from big pharmaceutical company to improve Provenge sales.

More information about Provenge FDA approval news

More information about Feb 27, 2012 news

VIVUS Inc (NASDAQ:VVUS): VIVUS is a biopharmaceutical company developing therapies to address obesity, sleep apnea, diabetes and male sexual health. The company's lead investigational product in clinical development, Qnexa, has completed phase 3 clinical trials for the treatment of obesity and is currently being considered for approval by US and EU regulators. VIVUS received a Complete Response Letter, or CRL, to the initial Qnexa NDA on October 28, 2010. We resubmitted the Qnexa NDA in October 2011, with an FDA action date of April 17, 2012. Qnexa is also in phase 2 clinical development for the treatment of type 2 diabetes and obstructive sleep apnea. In the area of sexual health, VIVUS has submitted an NDA for avanafil, a PDE5 inhibitor being studied for the treatment of erectile dysfunction, with an FDA action date of April 29, 2012.

On February 22, 2012, VIVUS announced that the U.S. Food and Drug Administration Endocrinologic and Metabolic Drugs Advisory Committee recommended Qnexa be granted marketing approval by the FDA for the treatment of obesity in adults. The Committee voted 20 to 2, on the recommendation for an approval based on a favorable benefit-risk profile.

Peter Tam, President of VIVUS said:

We are pleased with the panel's approval recommendation in support of the safety and efficacy of Qnexa. We look forward to working with the FDA as they complete their evaluation. Obesity is a serious medical condition, and we are committed to making Qnexa available and providing physicians with a new medical treatment option in their battle with this public health epidemic.

After the FDA Advisory Committee's recommendation, VIVUS shares surged more than 100%. VIVUS has a market cap of $1.84 billion and currently trading around $20.66. VIVUS has total cash of $146.84 million without any total debt. Considering their cash position, likelihood of Qnexa's approval and other drugs in the pipeline, VIVUS is a potential takeover target.

More information about FDA AdComm News

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX): Vertex Pharmaceuticals Incorporated (Vertex) is in the business of discovering, developing, manufacturing and commercializing small molecule drugs for the treatment of serious diseases. The Company's two products are INCIVEK (telaprevir), which is approved for the treatment of patients with genotype 1 hepatitis C virus (HCV), infection, and KALYDECO (ivacaftor), which is approved in the United States for the treatment of patients six years of age and older with cystic fibrosis (NYSE:CF), who have at least one copy of the G551D mutation in the cystic fibrosis transmembrane conductance regulator (CFTR), gene.

On March 6, 2012, Vertex Pharmaceuticals Inc announced that interim results from an ongoing Phase 2 study designed to evaluate the safety and tolerability of INCIVEK® (telaprevir) tablets in combination with pegylated-interferon and ribavirin in people who are co-infected with genotype 1 hepatitis C virus and human immunodeficiency virus (HIV). Data showed 74 percent (28/38) of patients who were treated with INCIVEK (in-SEE-veck) combination therapy had undetectable hepatitis C virus (HCV RNA) 12 weeks after the end of all study treatment (SVR12) compared to 45 percent (10/22) who were treated with pegylated-interferon and ribavirin alone. INCIVEK was well tolerated with commonly used Atripla®- and Reyataz®-based HIV treatment regimens. Changes in CD4 counts were similar between the treatment groups and no HIV viral load breakthroughs were observed in either treatment group during the study. The most common adverse events in the INCIVEK arms of the study were fatigue, pruritis (itching), headache, nausea and rash. No cases of severe rash were reported and there were no discontinuations due to rash.

Robert Kauffman, M.D., Ph.D., Senior Vice President and Chief Medical Officer at Vertex said:

Hepatitis C generally progresses faster, leads to more long-term liver complications and has been harder to cure among people who also have HIV. These new INCIVEK data are important as we work toward our goal of helping cure more people with hepatitis C. We're actively enrolling co-infected patients in a Phase 3 study and expect that data from this study will be included in a submission for a supplemental approval of INCIVEK.

Douglas Dieterich, M.D., Professor of Medicine in the Division of Liver Diseases, Mount Sinai School of Medicine, New York City said:

There is a great need for treatments that are well tolerated and offer co-infected patients a better chance at a cure for hepatitis C while maintaining suppression of their HIV.

Vertex has a market cap of $8.79 billion and currently trading around $41.79. Vertex has total cash of $968.92 million and total debt of $41.43 million. Considering Vertex's cash position, FDA approved drugs and other acquisitions related to Hepatitis C drug, Vertex is a potential takeover target.

More information about FDA approval
More information about March 6, 2012 news

Disclosure: I am long BPAX, VVUS.

Disclaimer: Some data is sourced from Yahoo Finance, Google Finance and investors site. I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to the investor to make the correct decision after necessary research.