CV Therapeutics falls 10%; Dendreon rises; Biomira up; Neurochem higher by 23.5%

By Ronda Fears

Memphis, Aug. 14 - It was a rather flat day for biotechs en masse, but traders said it was a buying-driven session although the news-makers were heading south. The biggest decliner in the sector was CV Therapeutics, Inc. after it announcing a stock deal.

"I would not say folks are deal-happy by any means, but there were more buyers out today and that was probably encouraging to anyone looking to raise capital," said a biotech stock trader at a bulge bracket firm.

"As always, this is a judgment call because oversold sectors can become even more oversold, but, in any case, the chart of the NBI [Nasdaq Biotechnology Index] has the look of a solid bottom, with a nascent uptrend developing. It is fragile, but if it develops, we can look forward with a glimmer of hope."

As for the CV Therapeutics deal, he said it seemed The Street thinks it was ill-timed.

"They should have had a little more foresight," the trader said. "Bringing a deal right now is a signal that the [CV Therapeutics] management doesn't think there is going to be any significant price appreciation anytime soon."

Indeed, the stock took a beating on the development, hitting a new 52-week low on a follow-on equity offering of 7.5 million shares, but came off the intraday low of $9.60. CV Therapeutics shares (Nasdaq: CVTX) settled the session with a loss of $1.09, or 10.05%, at $9.76.

CV timing seen ill-fated

A buyside market source said it was unclear in the market why the company would bring this deal when in April it announced a $200 million three-year equity line commitment from Azimuth Opportunity Ltd.

"This can't be good," he said. "Why didn't these clowns offer the 7.5 million shares when the stock was at $23, the time when the Azimuth Opportunity deal was announced?"

The stock made a string of new lows - $10.68 on Aug. 7 - after announcing second-quarter results Aug. 3 in which the company posted a net loss for the June quarter was $73.1 million, or $1.59 per share, compared with $51.6 million, or $1.43 per share, a year earlier while revenues climbed 19% to $6.85 million from $5.75 million. The 52-week high for the stock was hit Sept. 5.

Palo Alto, Calif.-based CV Therapeutics plans to use proceeds to fund commercialization of products and clinical trials, among other general corporate purposes.

The company has Ranexa and Aceon approved as cardiovascular drugs but is in studies to expand the label indication for Ranexa. It also has regadenoson in phase 3 trials as a pharmacological agent in myocardial perfusion imaging in anticipation of filing a New Drug Application in 2007.

Dendreon up ahead of filing

Meanwhile, Dendreon Corp. was higher in advance of an anticipated Biologics License Application filing at the Food and Drug Administration for its cancer drug Provenge in a couple of weeks.

"The first part of the BLA filing, the clinical part, is supposed to be filed at end of this month, and I expect some press to go with that," said a buyside market source.

"This is a definite buy zone here."

Dendreon shares (Nasdaq: DNDN) gained 15 cents on Monday, or 3.64%, to close at $4.27.

Biomira gains by 8%

With the 2006 market downdraft sparking speculation about takeovers and buyouts, on the other side of the fence - potential buyers - there was a sharp run-up in Biomira, Inc. shares Monday. A sellside trader added that development news also propped the stock up.

"I don't know that there was necessarily any specific noise on that [potential buy] front," said a trader. "I think Merck is about to start a study on Stimuvax, but really I don't know what was going on other that the stock was up today."

Biomira shares (Nasdaq: BIOM) added 7 cents on the day, or 7.78%, to close at 97 cents.

In June, Edmonton, Alta.-based Biomira hired Janney Montgomery Scott to identify in-licensing and acquisition opportunities, noting that in January it had inked a deal with Merck & Co. Inc.'s German unit to take full control of the phase 3 study program for its lead cancer vaccine product, Stimuvax for lung cancer, on March 1.

Biomira said it is seeking mid-stage products with good safety and efficacy data, and option rights to or license earlier-stage product candidates. The immediate focus is on oncology products.

The company has a collaboration agreement with Chiron Corp. for the co-development of Theratope for breast cancer and a license and development agreement with Prima BioMed, Ltd. for the development and commercialization of a Mannan-MUC1 fusion protein therapeutic vaccine.

Neurochem sees big buying

On news that has sent other biotechs reeling, another Canadian concern, Neurochem Inc., jumped Monday despite a FDA approvable letter with a request for more information on Kiacta - a drug candidate to treat Amyloid amyloidosis, a group of diseases in which organs accumulate deposits of abnormal proteins.

Late Friday, the Canadian company said it received an approvable letter asking for more efficacy information. The FDA said the additional information could come from one or more clinical trials, or more data from a complete follow up of patients in the existing study. Neurochem said it plans to collect the additional data.

"I was expecting an outright approval, subject to a commitment to supply additional safety data from the continuation of the 85 patient post-trial extension," said a buyside player in Neurochem. But he was not disappointed with the approvable letter.

"My reading of the company's press release is that we are almost there, since [it states] 'the FDA also stated that significant findings obtained from a complete follow-up of patients in the existing study could be persuasive.' I believe we are talking about the same data which Neurochem plans to submit next month in support of its European application for Kiacta.

"I fully expect the stock to close sharply higher. The FDA's willingness to accept more data from the existing study rather than require additional trials should trigger a rush to cover."

Indeed, Neurochem shares (Nasdaq: NRMX) shot up by $2.23, or 23.5%, to close at $11.72.

Neurochem also has Alzhemed for Alzheimer's in phase 3 trials with data expected in the spring of 2007.

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