Amylin shares up ahead of deal; Idenix off despite Novartis aid; Antigenics, cancer names higher

By Ronda Fears

Memphis, March 29 - Amylin Pharmaceuticals, Inc. was on deck Wednesday to price its follow-on stock offering, and the stock made an unusual spike ahead of the deal as players "fall over themselves" trying to get in before it, in anticipation that it will be upsized on heavy demand and surge afterward.

"It's safe to say this [Amylin deal] looks great," said a sellside biotech stock trader.

The San Diego-based company is selling 8.5 million shares off the shelf. Amylin has two diabetes products on the market - Symlin since April 2005 and Byetta since June 2005. The company shares revenue on Byetta sales in the United States with Eli Lilly & Co.; Byetta sales revenues outside the United States are split 80% to Lilly and 20% to Amylin. Amylin is working with Lilly and Alkermes, Inc. to develop a long-acting release, or LAR, version of Byetta that would reduce dosing from twice daily to once weekly.

Amylin shares (Nasdaq: AMLN) gained $1.58, or 3.59%, to settle Wednesday at $46.86.

Meanwhile, Seattle Genetics Inc., which also has a deal on the table, took a sharp dive. The Bothell, Wash.-based biotech, which develops monoclonal antibody-based therapies for the treatment of cancer and immunologic diseases, plans to sell 7.3 million shares of common stock off the shelf and has agreed to sell 1,129,015 shares to investment funds affiliated with Baker Brothers Investments at a price equal to offering price.

"I didn't think this would occur so early since it seems they have money available to fund operations until late next year," the sellside trader said. "But it's tougher to get that cash if you wait too long and you're really running out, so this is pre-emptive. They know they're going need it. That means they don't expect to be profitable for a while."

Seattle Genetics shares (Nasdaq: SGEN) dropped 56 cents, or 9.76%, to close Wednesday at $5.18.

Idenix settles off by nearly 4%

Idenix Pharmaceuticals, Inc. took another dive Wednesday despite nailing down further support from Swiss pharmaceutical giant Novartis AG for its lead hepatitis C drug candidate that could add up to $525 million for the Cambridge, Mass.-based biotech.

A buyside market source blamed the persistent drop in Idenix shares on hedge fund players short selling.

"Hedgies are figuring the stock will keep going down," said the buysider, who is based in Boston. "I think on this one it's a big mistake, as Novartis has the markets locked up."

Idenix shares (Nasdaq: IDIX) ended off by 53 cents, or 3.76%, at $13.56 after seesawing throughout the session in a trading range of $13.17 to $14.50.

Novartis - a majority shareholder of Idenix - exercised an option to co-develop the biotech firm's lead drug candidate NM283, or valopicitabine, an antiviral drug for the treatment of hepatitis C. Under the agreement, Idenix will receive up front $25 million plus another $45 million upon the advancement of valopicitabine into phase 3 clinical trials. In addition, Idenix may receive up to $455 million in milestone payments and up to $300 million for development costs.

Idenix shares fell 28% last Friday after the company delayed a phase 2b trial for valopicitabine after a handful of patients exhibited gastrointestinal toxicity and said it would modify the design of the trial.

Novartis deal a yes-vote

"The fact that Novartis opted in after seeing all the phase 2 data available to date, and seeing the data on the competitive landscape, strongly suggests that Novartis believes NM283 can be a billion-dollar drug," said the buysider involved in Idenix.

Idenix and a number of other companies such as Vertex Pharmaceuticals, Inc., Schering-Plough Corp. and Anadys Pharmaceuticals, Inc. are racing for approval of new treatments for hepatitis C, a market estimated by some to bring in sales of $4 billion to $5 billion by 2013.

"This is a very significant event for Idenix given the development program planned for valopicitabine," said Jean-Pierre Sommadossi, chief executive of Idenix, in a news release. "Our collaboration with Novartis contributes additional clinical, regulatory and marketing expertise to these efforts, as well as funding for this development program."

Antigenics recoups over 13%

Antigenics, Inc. rebounded sharply Wednesday after a plug on Good Morning America in which a brain cancer patient reported progress since participating in a trial for its drug Oncophage, traders said. Since last week, Antigenics shares have lost more than 50% after the company put a phase 3 trial of Oncophage for kidney cancer on hold.

Antigenics shares (Nasdaq: AGEN) on Wednesday added 35 cents, or 13.21%, to close at $3.

"This morning on Good Morning America, a brain cancer patient (former policewoman from San Francisco) was profiled who is doing much better after receiving Oncophage. They talked in-depth about this personalized approach and how the vaccine is made," said a sellside market source on the West Coast.

The GMA item featured Barbara Hammerman, 46, who is being treated by neurosurgeon Andrew Parsa at the University of California in San Francisco, who is running a clinical trial with 60 patients with other surgeons in which they send brain tumors to Antigenics, which in turn develops vaccines from a tumor's healthy protein that is then injected back into the patient.

Antigenics' dramatic drop was precipitated when the New York-based company said an independent panel reviewing trial data found a trend toward recurrence-free survival using Oncophage but against overall survival.

The company said it would suspend the second part of the phase 3 trial until the data from the first part is fully analyzed, anticipated in four to six weeks. Antigenics said it will implement a restructuring plan that will mean temporarily discontinuing all late-stage clinical programs and concentrating on early stage clinical and preclinical programs.

Antigenics seller laments move

Oncophage is Antigenics' lead drug candidate, so the blow was severe and caused many holders to jump ship. On Wednesday, however, at least one was regretting such a move.

"I sold on Friday and took my loss. I was a bit surprised at my emotional reaction. I felt like I got what I deserved. In general I'm a fairly rational investor. Antigenics was a form of recreational gambling. My holding was about 1% of my total, but it consumed a disproportionate share of my attention. I realized all along it was a long shot. Long shots usually don't win," said the buysider.

"Gamblers always remember their winners better than their losers, so I forced myself to sit down and figure out my other losers and winners. Life isn't fair and sometimes the unfairness works in one's favor. If it weren't for short-sellers I would have lost more. They kept prices down during the periods of euphoria and that probably saved me real money in the end. That comment definitely applies in the case of Antigenics."

Dendreon, Cell Genesys bought

Other companies with cancer vaccines were finding more buyers in the wake of Antigenics' news, traders said, including Dendreon Corp. and Cell Genesys Inc., even though they have different cancer treatments with different approaches in trials and both gained in the face of Antigenics' renewed interest.

"Guys who want to be involved in early stage cancer development names were picking Dendreon and Cell Genesys," said a sellside market source. "We are still seeing that today, but I think there are some who regret making a hasty decision to jump ship on Antigenics."

Dendreon shares (Nasdaq: DNDN) added 23 cents Wednesday, or 5.13%, to end at $4.71.

Seattle-based Dendreon uses antigen identification, antigen engineering and antigen-presenting cell processing to produce active immunotherapy product candidates to potentially stimulate a cell-mediated immune response. Provenge is Dendreon's lead active cellular immunotherapy in phase 3 development for prostate cancer. The company also discovered Trp-p8, a cold receptor and transmembrane ion channel in preclinical development, which is over-expressed in breast, prostate, lung and colon cancers.

"At least Dendreon has a chance, and a lot more cash on hand to weather any storm that comes its way," said the sellsider. "Dendreon has roughly $134 million in cash and very little debt. It looks like the better play at this time."

Cell Genesys shares (Nasdaq: CEGE) gained 35 cents, or 4.67%, to $7.84 on Wednesday.

South San Francisco-based Cell Genesys is pursuing two clinical stage product platforms - GVAX cancer immunotherapies and oncolytic virus therapies. Ongoing clinical trials include phase 3 trials of GVAX immunotherapy for prostate cancer, phase 2 trials of GVAX immunotherapy for pancreatic cancer and leukemia, and a phase 1 trial of CG0070 oncolytic virus therapy for bladder cancer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.