Market unsure of CV Therapeutics bidding war; Roche to close on Genentech before month's end

By Cristal Cody

Tupelo, Miss., March 13 - While Astellas Pharma Inc. mulls whether to wrestle CV Therapeutics, Inc. out of the grasp of Gilead Sciences, Inc., analysts expect another offer but rule out a bidding war.

Meanwhile, an analyst said Friday that Roche Holding AG should close on its acquisition of Genentech Inc. soon after the tender offer expires on March 25.

Some activity earlier this week with a spike in call volume for Sun Microsystems, Inc. prompted speculation a buyout bid is in the works, though the company played down the report in an interview with Prospect News.

Meanwhile, Wall Street pulled off a fourth straight day of gains on Friday.

The Dow Jones Industrial Average rose 53.92 points, or 0.75%, to close at 7,223.98.

The Standard & Poor's 500 index gained 5.81 points, or 0.77%, to 756.55, and the Nasdaq Composite index added 5.40 points, or 0.38%, to close at 1,431.50.

"By and large, we had a pretty good rally the first part of the week," Michael McCarty, chief equity and options strategist at New York-based broker-dealer Meridian Equity Partners, told Prospect News.

"People are squaring positions for the weekend and plan on coming back Monday and taking a fresh look at things."

CV Therapeutics

Foster City, Calif.-based Gilead and Palo Alto, Calif.-based CV Therapeutics said Thursday the two companies had agreed to a $1.4 billion, or $20-a-share, deal.

Astellas previously went hostile and filed litigation after CV Therapeutics' board rejected the Japanese drug maker's $16-a-share offer.

"Although we believe that there is a relatively high chance of a counter bid by Astellas, a bidding war between Gilead and Astellas is unlikely," an analyst said Friday.

The offer with Gilead is contingent on antitrust clearance and is expected to close in the second quarter of 2009.

Shares of CV Therapeutics fell 37 cents, or 1.76%, to $20.67 in trading on Friday.

Gilead's stock gained $1.00, or 2.25%, to close at $45.43.

Genentech set to go

Genentech shares gained 28 cents, or 0.30%, to close Friday at $94.20.

Clinical trial results from Genentech's drug Avastin, which are due in April, have been excluded from the material adverse effect for Roche's acquisition, an analyst said Friday.

Under deal terms reached Thursday, South San Francisco, Calif.-based Genentech agreed to the revised bid of $46.8 billion, or $95.00 a share, in cash for the remaining 44% of shares that Roche did not hold.

The new offer from the Swiss drug maker expires March 25.

Spike in Sun Microsystems

On Tuesday, International Securities Exchange traders bought to open 2,304 calls on Sun Microsystems, compared to 19 puts.

Analysts told Prospect News they were curious as to what was behind the uptick as there was some speculation a potential takeover bid was in the works.

The company's competitors include Microsoft Corp., International Business Machines Corp. and Hewlett-Packard Co.

Sun Microsystems spokeswoman Dana Lengkeek told Prospect News that the company continues to "align resources" to place the company in the best position for performance.

"We don't comment on different stock buys," she said. "There's no real-time intelligence on what's moving a stock on a particular day."

Shares of Sun Microsystems closed up 11 cents, or 2.36%, to $4.78 on Friday. The stock has traded from $2.60 to $17.05 over the past year.

Mentioned in this article:

CV Therapeutics, Inc. Nasdaq: CVTX

Genentech Inc. NYSE: DNA

Gilead Sciences, Inc. Nasdaq: GILD

Sun Microsystems, Inc. Nasdaq: JAVA

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