2 Pharmaceutical Companies Trading Below Net Cash

| About: Myrexis, Inc. (MYRX)
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Since my last article in February about Myrexis (NASDAQ:MYRX) we have seen a small pop in the share price and a subsequent drop as well.

The pop was due to a press release given on February 15th stating that company's Board of Directors has retained Stifel Nicolaus Weisel, an investment banking firm, to assist it in reviewing and evaluating a full range of strategic alternatives available to the company to enhance shareholder value. Myrexis has also suspended development activities on all its pre-clinical and clinical programs. The company will initiate an alignment of resources consistent with its decision to suspend further development activities.

The drop came on May 11th with a press release stating that company's Board of Directors has appointed Richard B. Brewer as President and Chief Executive Officer, and David W. Gryska as Chief Operating Officer, effective on May 11, 2012. In addition, both Mr. Brewer and Mr. Gryska have been appointed to Myrexis' Board of Directors.

Mr. Brewer is the former Chief Executive Officer of Scios, Inc. and has served as Chairman of several biotechnology companies. Mr. Gryska is the former Senior Vice President and Chief Financial Officer of Celgene Corporation (NASDAQ:CELG).

Mr. Brewer and Mr. Gryska collectively have an extensive track record of commercializing, acquiring and marketing pharmaceutical products throughout their careers at companies including Genentech (now part of Roche (OTCQX:RHHBY) ), Celgene, Scios, Dendreon (NASDAQ:DNDN) and several other life science organizations. Mr. Brewer and Mr. Gryska worked together as CEO and CFO, respectively, at Scios, before ultimately selling the business to Johnson & Johnson (NYSE:JNJ) for $2.5 billion in 2003.

Gerald Belle, Chairman of Myrexis, stated, "The Board of Directors has been evaluating alternatives to increase shareholder value following our decision in February to suspend development activities on the company's preclinical and clinical programs. Through this evaluation process, we made a decision to pursue the acquisition of one or more commercial stage assets. To accomplish this goal, we were fortunate to attract these talented executives with a depth of experience in biopharma and a proven track record of executing value-driving transactions."

Myrexis ended its third fiscal quarter (ending March 31st) with $96.4 million in cash, cash equivalents and marketable securities. With 26,484 shares outstanding it creates cash of $3.64 per share.

There was one insider transaction just recently on May 16th. Gerald Belle, Chairman of Myrexis, acquired 36630 additional shares at $2.74 price. Gerald Belle now has a total of 77230 shares.

I wrote an article about Vanda Pharmaceuticals (NASDAQ:VNDA) on March 2012.

Since this article there has been one major news release and also the first quarter earnings release.

On April 16, 2012 Vanda Pharmaceuticals announced that it has acquired an exclusive world-wide license from Eli Lilly and Company (NYSE:LLY) to develop and commercialize a small molecule neurokinin 1 receptor (NK-1R) antagonist for all human indications.

NK-1R antagonists have been evaluated in a number of indications including chemotherapy-induced nausea and vomiting (CINV), post-operative nausea and vomiting (PONV), alcohol dependence, anxiety, depression, and pruritus. VLY-686 has demonstrated proof-of-concept in alcohol dependence in a study published by the National Institutes of Health (NIH). In that study VLY-686 was shown to reduce alcohol cravings and voluntary alcohol consumption among patients with alcohol dependence. Merck's (NYSE:MRK) Emend (aprepitant) is the only marketed NK-1R antagonist in the United States and is approved for the treatment of CINV and the prevention of PONV.

Vanda intends to examine the clinical and commercial profile of VLY-686 to find out potential indications for an early development clinical program.

Vanda ended the first quarter 2012 with $157 million in cash. The company has 28 million shares outstanding which creates cash of $5.6 per share. Full year 2012 change in cash is expected to be negative between $45.0 and $50.0 million.


I am always interested in companies that trade below their net cash level. I am currently long Vanda and might go long Myrexis as well in the near future. Vanda has plenty of upcoming milestones that I covered in my previous article.

Disclosure: I am long VNDA.