Abraxis seeks partner, soars 7%; Somaxon higher; Dynavax slips; Exact Sciences, Immunicon slide

By Ronda Fears

Memphis, Sept. 28 - Abraxis BioScience, Inc. soared in trade Thursday after announcing that it had filed for approval of its breast cancer drug Abraxane in Europe and it was actively seeking a promotional partner outside of North America.

Los Angeles-based Abraxis said that European Medicines Agency has accepted its application for Abraxane and said the typical review period is around 12 months. In conjunction with the filing, the company also said it will be seeking a global commercialization partner for Abraxane.

"Finally!" remarked a sellside trader, saying that the market had been waiting for almost a year for the Abraxane program to expand beyond the United States.

Abraxane was approved in 2005 in the United States and Canada for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. It was launched in the United States in January with AstraZeneca plc as the marketing partner and generated $133.7 million in revenues.

Presently, Abraxis is attempting to get a broader label for Abraxane as adjuvant chemotherapy for breast cancer, which is given to prevent a recurrence after surgery, and is discussing that with the Food and Drug Administration. At issue is whether further trials would be required. Two weeks ago, an FDA panel voted to require a clinical trial.

Abraxis shares (Nasdaq: ABBI) zoomed up by $1.91, or 7.41%, to $27.68.

Somaxon gains on study update

Somaxon Pharmaceuticals, Inc. got a modest rise out of news that it has completed the genotoxicity studies requested by the FDA for its lead candidate, the sleeping pill Silenor, moving a step closer to getting the drug approved.

"There has been a drag on this story because of the trials," said a buyside market source in Boston. "It has seemed very slow. Another bummer is that they have not had any luck finding a partner."

In April, San Diego-based Somaxon said it was looking for a partner on Silenor.

Somaxon shares (Nasdaq: SOMX) gained 11 cents on the day, or 0.925, to close at $12.11.

The company said Thursday it plans to submit the genotoxicity studies to the FDA and, based on its assessment, request to submit the data from the requested carcinogenicity studies of Silenor as a post-New Drug Application approval commitment. The FDA has previously indicated to Somaxon that depending on the outcome of the genotoxicity studies, it may be flexible on the timing of the other studies.

Somaxon also is conducting reproductive toxicology studies of Silenor requested by the FDA and plans to complete those studies in the first half of 2007. If the FDA agrees with the company's assessment of the genotoxicity results, and assuming that the ongoing phase 3 clinical trials and planned reproductive toxicology studies are successful, Somaxon plans to file the NDA for Silenor in third quarter of 2007.

Immunicon bounces after hours

Immunicon Corp. fell victim to trading ploys, one trader said, showing a loss in the regular session after announcing that it has entered into two separate agreements with MolMed SpA, an Italian pharmaceutical concern, to fund work to develop a biomarker for tumor cells, only to bounce back after the close.

"It's your typical cat-and-mouse game. Market guys love to snap stocks, and clear all the stop-loss orders," said a sellside trader. "You gotta love that drop to 4.40 and the trip back up. They did the same thing yesterday."

Immunicon shares (Nasdaq: IMMC) traded in a band of $4.40 to $4.80 in the regular session with 248,816 shares changing hands versus the norm of 65,643 shares, settling the day off by 28 cents, or 5.93%, at $4.52. But in after-hours activity, on a single trade, the stock moved up 9 cents, or 1.99%, to $4.61, the trader said.

"For the long haul, the news today is good, I suppose, but this [biomarker] is a long way from being anything solid," the trader said. "It's just that sometimes you have to tweak your average price to get to a more comfortable place with it."

"This is a challenging and interesting project," said Leon Terstappen, chief scientific officer of Huntingdon Valley, Pa.-based Immunicon, in a statement. "If successful, this biomarker may be valuable to a number of drug development programs that focus on anti-angiogenesis."

In a second agreement, Immunicon will perform analysis of circulating tumor cells and circulating endothelial cells in a phase 1 dose-escalation trial designed to assess safety of a MolMed agent. Planning is underway for the phase 2 extension of this trial.

Dynavax slides on shelf filing

Berkeley, Calif.-based Dynavax Technologies Corp. slumped Thursday, a day after news hit the wires that it has filed a $75 million equity shelf.

"Sell the news," said a biotech stock trader on the sellside. "We're seeing a lot of that today. People will start to pick it up again once it breaks below $4."

Dynavax shares (Nasdaq: DVAX) lost 6 cents, or 1.38%, to settle at $4.29.

Regardless of whether Dynavax launches a follow-on deal, which is not a certainty related to the shelf filing, the trader said there will be "some ongoing plays on any volatility in this name."

He noted that in late August, the biotech procured a $30 million equity line from Azimuth Opportunity Ltd. Under the 18-month line, Azimuth may buy shares of Dynavax at discounts ranging from 5.2% to 7% to the volume weighted average price of the stock for the 10 trading days before a draw. The stock was at $3.99 at the time of that deal.

Dynavax's lead programs are Tolamba for allergic rhinitis and Heplisav for hepatitis B.

Earlier this month, the company announced a research collaboration and license agreement with AstraZeneca plc related to Dynavax's TLR-9 agonist-based therapies for asthma and chronic obstructive pulmonary disease. AstraZeneca will be responsible for the development and worldwide commercialization of products arising out of the research program. Dynavax got an upfront fee of $10 million and will get research funding and preclinical milestones that could bring the total committed funding to $27 million, resulting in a total potential deal value of roughly $136 million.

Exact burn rate worrisome

Elsewhere, Exact Sciences, Inc. took a dive on concerns about its cash outlays, one buyside source remarked Thursday.

Exact Sciences shares (Nasdaq: EXAS) fell 15 cents, or 6.82%, to $2.05 on Thursday. The Marlborough, Mass.-based company, which makes DNA tests to screen for colorectal cancer, presented at the UBS Global Life Sciences Conference on Wednesday

"At the UBS conference they said the company holds 37 patents on their DNA stool-based test technology. That's great, but they also said they spent an unheard-of $12 million on the study that was presented in Los Angeles this past spring at the digestive disease conference," the buysider said.

"There is some concern about the cash burn rate and their funding."

On Thursday, Exact Sciences chief executive Don Hardison also was scheduled to present at the Wall Street Analyst Forum in New York.

Exact Sciences develops proprietary DNA-based technologies for use in the detection of cancer with its PreGen-Plus technology, a noninvasive stool-based DNA testing service for the detection of colorectal cancer in the average-risk population.

Nabi rises 7% as expected

As expected, Boca Raton, Fla.- based Nabi Biopharmaceuticals shot up Thursday on the previous day's late announcement that it has retained Banc of America Securities LLC to explore strategic alternatives - a market euphemism for putting the company on the auction block.

Nabi shares (Nasdaq: NABI) gained 38 cents on Thursday, or 6.79%, to close Thursday at $5.98, mirroring after-hours activity in the stock Wednesday on the news.

Since November 2005, when Nabi halted development of StaphVAX after it failed to meet the primary endpoint of a phase 3 clinical trial, the company has come under fire by stockholders, particularly Third Point LLC in New York. On such pressure, the board decided Wednesday to retain Banc of America Securities to publicly explore whether there are strategic alternatives.

Also as expected, Nabi's 2.875% convertible due 2025 gained in tandem with the stock Thursday, adding about 4.5 points to end Thursday at 90.5 bid, according to a sellsider source in the convertible market.

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