Endo Pharmaceuticals prices $417.75 million secondary stock sale; Procyon to merge with Cellpep

By Sheri Kasprzak and Rebecca Melvin

New York, Jan. 19 - Endo Pharmaceuticals Holdings Inc. set the pricing terms for a $417.75 million secondary public offering of its stock on Thursday.

The offering sent Endo's stock down 3.33% with the company's shares losing 97 cents to end at $28.15 (Nasdaq: ENDP). In after-hours trading, Endo's stock gained 20 cents, or 0.71%.

In the secondary deal, some of the company's shareholders will sell 15 million shares at $27.85 each, said Bill Newbould, a spokesman for Endo.

Citigroup Global Markets Inc. is the underwriter for the offering and has an over-allotment option for up to 2.25 million shares.

A total of 40,000 shares represent outstanding stock options. The rest of the shares are issued and outstanding shares.

The shares will be sold under Endo's shelf registration.

Kelso & Co. will sell the majority of the shares.

Based in Chaddsford, Pa., Endo is a biopharmaceutical company focused on treatments for pain.

In the broader biotech market, activity in private placements and convertibles remained light.

In convertibles, activity remained muted with the exception of some strength in the 2.25% convertibles of Human Genome Sciences Inc. - both the new and the old issues - sparked by a Wachovia analyst upgrade on the equity side.

But the convertibles of MGI Pharma Inc. remained weak despite its underlying shares adding nearly 1% after a Thomas Weisel analyst based in San Francisco initiated coverage of MGI at "outperform."

Other biotech names getting a look this week despite the focus on techs included CV Therapeutics Inc. and Nektar Therapeutics because of Food and Drug Administration decision dates seen next week, a biotech analyst said.

Human Genome jumps

The two issues of 2.25% convertibles of Human Genome due 2011 and 2012 gained more than 3 points on Thursday after a Wachovia upgrade, traders said.

The upgrade was prompted ahead of the potential release of phase 2 Albuferon data for hepatitis C trials, according to a New York-based buyside biotech analyst. Human Genome Sciences, based in Rockville, Md., develops protein and antibody drugs. In November, Human Genome said interim results of the phase 2 clinical trial showed that the drug was safe, well tolerated and showed robust antiviral activity.

The trial was to evaluate the safety, tolerability and efficacy of Albuferon (albumin-interferon alpha) in combination with ribavirin in patients with chronic hepatitis C.

The 2.25% convertibles due 2011 ended the day around 91 bid, 91.50 offered, up 3.7 points on the day; while the newer 2.25% convertibles due 2012 finished at 83.875 bid, 84.375 offered, up about 3.4 points. Shares of Human Genome (Nasdaq: HGSI) added 66 cents, or 6.6%, to $10.7201.

MGI Pharma weaker

The convertibles of MGI Pharma Inc. didn't respond to a nearly 1% gain in the company's shares after a Thomas Weisel analyst based in San Francisco initiated coverage of MGI at "outperform."

Earlier this month MGI Pharma disappointed investors with its pre-reported 2005 financials and 2006 guidance.

Its 1.682% convertibles traded at 60, while its shares (Nasdaq: MOGN) added 15 cents, or 1%, to $16.10.

In addition, names in the sector getting a look this week despite the focus on techs included CV Therapeutics Inc. and Nektar Therapeutics because of FDA decision dates seen next week, a biotech analyst said.

CV Therapeutics is expecting FDA approval on its drug Ranexa for chronic stable angina on Jan. 27.

Also, after the bell, Nektar said it has named Louis Drapeau as senior vice president, finance and chief financial officer. Drapeau was previously at BioMarin Pharmaceutical Inc. in the same post. He succeeds Ajay Bansal, who resigned as CFO effective immediately.

Procyon completes merger with Cellpep

Procyon Biopharma Inc. said Thursday it intends to acquire Cellpep SA, a French biopharmaceutical company, and form a new company called Ambrilia Biopharma.

The merger is expected to cost C$39.1 million in stock.

On Thursday, Procyon also completed an C$18.1 million private placement. The full terms of that offering could not be determined by press time Thursday evening.

"We are very excited about this major strategic move to bring both companies together," said Procyon CEO Hans Mader in a statement. "Combining an early stage with a late-stage oncology and infectious diseases products company will, we believe, create value for all our stakeholders."

Procyon's stock lost 4 cents Thursday to end at C$0.325 (Toronto: PBP).

The newly formed Ambrilia will focus on treatments for cancer and infectious diseases.

Based in Montreal, Procyon is a biopharmaceutical company focused on treatments for infectious diseases. Cellpep is focused on oncology.

Pfizer stock up on 4Q earnings

Pfizer Inc. released its fourth-quarter earnings report Thursday, sending the company's stock up slightly.

Pfizer's stock gained 88 cents to end the day at $24.97 (NYSE: PFE). In after-hours trading, the stock gained another 2 cents.

For the fourth quarter of 2005, Pfizer reported a net income of $2.732 billion compared with a net income of $2.825 billion for the same quarter of 2004.

"We are supporting our key in-line and newly launched medicines, driving important new medicines through the pipeline and taking a series of specific actions to build Pfizer's value," said Hank McKinnell, the company's chief executive officer, in a statement. "We completed the year with positive news on many fronts - including double-digit full-year worldwide growth of Lipitor, an exceptional Lyrica launch in the U.S., priority-review status for two potential breakthrough medicines Sutent for cancer and Champix for smoking cessation, favorable decisions in Lipitor patient cases and a 26% dividend increase for the first quarter of 2006."

"Given the strength of our operations, in December 2005 we increased our dividend for the first quarter of 2006 by 26% to $0.24 per share, while continuing to invest for long-term growth," said David Shedlarz, Pfizer's vice chairman, in a statement. "With this increase, Pfizer will have increased dividends every year for 39 consecutive years."

New York-based Pfizer is a pharmaceutical company focused on a wide range of medications, including treatments for inflammation and high cholesterol.

Novartis stock down on earnings

Novartis AG released its fourth-quarter earnings report Thursday, reporting a net income of $1,352,000 for the quarter, down slightly from the net income of $1,354,000 reported for the same quarter in 2004.

For the year-end 2005, Novartis reported a net income of $6,141,000, compared with a net income of $5,601,000 for the same quarter of 2004.

The company's stock lost $1.02, or 1.81%, to close at $55.23 on Thursday (NYSE: NVS).

"It gives me great pleasure to present once again a strong performance and record results in 2005," said Daniel Vasella, Novartis's CEO, in a statement. "We gained market share and concluded strategic acquisitions to strengthen our leadership position in areas with high growth potential and unmet patient needs. Our strong performance has allowed us to increase our access-to-medicines programs to reach 6.5 million people in 2005 with $696 million of products donated or sold at cost. We are confident of delivering in 2006 another year of dynamic growth with record sales and earnings."

Based in Basel, Switzerland, Novartis develops therapies for cancer, infectious diseases and other conditions.

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