GSK to go hostile with $2.6 bln Human Genome (Nasdaq: HGSI) tender

Orlando, FL 5/9/12 (StreetBeat) -- GlaxoSmithKline (NYSE: GSK) will take its $2.6 billion bid for Human Genome Sciences (Nasdsaq: HGSI) direct to shareholders this week, after its takeover offer was rejected last month by the U.S. biotech group's board.

The decision to go hostile with the $13 a share cash tender offersets GSK up for a potentially lengthy battle with those Human Genome investors who believe it is not offering enough.

"They will do fantastically well out of this - at $13 it is a steal," said Mark Evans, a fund manager at Taube Hodson Stonex, the sixth largest investor in Human Genome with a 5.6 percent stake.

"I still think it is very likely that they will have to pay more."

The top 10 investors in Human Genome together own 78 percent of the shares, putting them in the driving seat in deciding the fate of the company.

Human Genome's board spurned the approach from Britain's biggest drugmaker on April 19, saying it did not reflect the company's inherent value. GSK insists its bid, at an 81 percent premium to the price on April 18, is full and fair.

Human Genome shares were at $14.35 in pre-market trading on Nasdaq by 1220 GMT after closing at $14.62 on Tuesday - above GSK's offer price but still only half the peak touched in April last year, when investors' hopes were higher for its new drug for the autoimmune condition lupus, Benlysta.

GSK and the U.S. pioneer of gene-based drug discovery sell Benlysta together and the companies are collaborating on two other experimental drugs in late-stage trials for diabetes and heart disease that could become significant sellers.

Buying Human Genome would give GSK full rights to these partnered drugs, underscoring the appetite among big drugmakers for biotech products to refill their medicine chests.

A spokeswoman for GSK declined to say exactly when this week the tender, which will stay open for 20 business days, would be launched. The standard practice is for tender offers to proceed only if the buyer gets a majority of the shares, but there is scope to extend or amend the offer.

GSK stock was down 1.9 percent, underperforming a 1.3 percent fall in the London FTSE 100 index, after it announced the planned tender offer on Wednesday.

NO NEED TO JOIN REVIEW PROCESS

Human Genome has hired Goldman Sachs and Credit Suisse to explore strategic alternatives, including a possible sale of the company, and has invited GSK to join the process.

But GSK, which is being advised by Lazard and Morgan Stanley, said it would not participate in that strategic review.

"GSK's participation in the process is unnecessary as its offer is not conditioned on due diligence or financing and can be completed expeditiously," it said in a statement.

"It is important for HGS shareholders to understand that GSK is committed to proceeding with its offer."

GSK's partnership with the Rockville, Maryland-based company goes back two decades, and even though the deals between the two companies have no tricky change-of-control clauses, analysts doubt another company will emerge as a "white knight" bidder.

Any non-GSK acquirer would only get partial control of the key drugs, which could make it an unappetizing target.

GSK and Human Genome share rights to Benlysta, but GSK is in charge of developing both the new heart drug darapladib and albiglutide for diabetes. As a result, the British-based company already has a dominant economic interest in these two drugs.

HOLDING THE CARDS

"Glaxo holds a lot of the cards in this story," said Navid Malik, an analyst at Cenkos Securities.

"I think Glaxo will have to raise its offer but probably not significantly ... the right price for shareholders in Human Genome would be in the mid to high-teens (dollars per share)."

Many shareholders bought into Human Genome when the shares surged from some $3 in July 2009 after impressive clinical trials results with Benlysta, when they may have paid around $15-18 a share.

Drugmakers around the world are seeking deals to get new drugs into the pipeline as older products lose patent protection, and GSK's bid for Human Genome is the latest in a recent wave of takeover activity in the biotechnology sector.

AstraZeneca (NYSE: AZN) last month agreed to buy Ardea Biosciences (Nasdaq: RDEA) for $1.26 billion to access a promising gout drug, while Roche made an ultimately unsuccessful bid for gene sequencing firm Illumina in January.

GSK said it would prefer to complete the deal on "a friendly basis in a timely fashion" and it remained willing to discuss its offer with Human Genome at any time.

Please contact www.thestreetbeat.com for interest in our latest investor relations platform the “CEO Interview Series” with its host Steve Kanaval. The package includes a one-on-one interview with a seasoned industry professional; published segment to our web site with embedded audio/video file; and a compressed file that can be easily e-mailed out to your current and/or potential investors. Please e-mail bflautt@gmail.com or call (662) 392-0740 for pricing and scheduling.

StreetBeat Disclaimer

Distributed by Viestly

LargeCap Stocks to Watch Today

Tomahawk, WI 3/30/2012 (StreetBeat) -- Research In Motion (RIMM), the troubled BlackBerry maker, missed fourth-quarter analysts' expectations, said it would no longer provide quarterly forecasts, and announced former co-CEO Jim Balsillie is resigning from the board.

RIM posted fiscal fourth-quarter non-GAAP earnings of 80 cents a share on revenue of $4.2 billion. Analysts were expecting profit of 81 cents a share on revenue of $4.5 billion.

CEO Thorsten Heins on Thursday stressed RIM needs "substantial change" and said that "no stone will be left unturned." A sale of the company isn't out of the question but he said it's not the primary focus right now.

Dunkin' Brands (DNKN), the owner of Dukin' Donuts and Baskin-Robbins, announced a public offering of 26.4 million common shares at $29.50 a share.

A labor advocacy group released the findings of an audit of working conditions at Foxconn, a major Apple (AAPL) supplier in China.

Apple CEO Tim Cook visited a Foxconn facility in China on Thursday, and Foxconn reportedly has promised to make improvements, but it's not clear how this may or may not impact the company's relationship with Apple, which is part of the Fair Labor Association that conducted the audit.

Best Buy (BBY) shares fell 7% to $24.77 on Thursday after the electronics retailer posted a quarterly loss and said a cost-cutting program would include the shuttering of 50 big-box stores in the U.S.

Cache (CACH), the women's apparel retailer, missed fourth-quarter profit estimates and disappointed in its earnings projections.

The retailer reported net income of $1.9 million, or 15 cents a share; analysts were looking for 18 cents a share.

For the first quarter, the company said it expects to report a loss of 9 cents a share. The consensus forecast is for a loss of 1 cent.

AstraZeneca (AZN) was up 0.6% in premarket trading after winning a U.S. patent lawsuit.

The U.S. district court said that the company's Seroquel product is patent protected. Seroquel is AstraZeneca's second largest product, used for patients suffering schizophrenia, depression and bipolar disorder.

Williams Cos. (WMB) said a public offering of 26 million shares was priced at at $30.59 a share.

The offering is expected to close on April 4.

StreetBeat Disclaimer

Distributed by Viestly

MAP Pharma (Nasdaq: MAPP) shares dive after FDA rejects migraine treatment

Shawshank, VA 3/27/12 (StreetBeat) -- Shares of MAP Pharmaceuticals Inc (Nasdaq:MAPP) fell by a third in premarket trade on Tuesday, after health regulators rejected its orally inhaled treatment for migraine, but analysts remain optimistic of its potential to eventually win approval.

The U.S. Food and Drug Administration, which raised issues related to the chemistry, manufacturing and controls (CMC) of the treatment, Levadex, did not ask for additional trials and did not cite any safety or efficacy issues.

"We anticipate MAP should be able to complete requirements associated with CMC and correcting observations ... within three months and resubmit the (New Drug Application) in the third quarter," Wedbush Securities analysts Liana Moussatos and Richard Lau wrote in a note to clients.

"With a rapid review, approval could occur by year-end."

Levadex, which is a formulation of a drug currently available in other dosage forms to treat migraine, is self-administered using the company's inhaler -- Tempo.

"We believe that there would not be any need for changes in the device," Chief Executive Timothy Nelson said, adding that the company will send a request on Tuesday for a meeting with the FDA.

The FDA also raised issues related to a facility of a third party manufacturer, MAP Pharma said in a statement late on Monday.

However, on a conference call CEO Nelson said the third party has already provided responses related to these issues.

Analysts at J.P. Morgan said that while they expect the shares to trade lower as the key positive catalyst for the stock has now been delayed, they continue to view Levadex as a $500 million peak sales product.

Both J.P. Morgan and Wedbush analysts said that issues related to manufacturing appear manageable and can be easily corrected.

"We believe the core issue was the inability of the FDA to complete the review of a last minute request for information on inhaler usability," Wedbush analysts said.

Other migraine therapies currently available in market include Pozen Inc's (Nasdaq:POZN) Trexmet, AstraZeneca's (NYSE:AZN) Zomig and Zogenix Inc's (Nasdaq:ZGNX) SUMAVEL DosePro.

European and American studies have shown that 6 percent to 8 percent of men and 15 percent to 18 percent of women experience migraine each year, according to the World Health Organization.

MAP Pharma, which had cash and cash equivalents of $112 million as of September 30, 2011, is also testing Levadex for pediatric migraine and cluster headache.

Shares of the Mountain View, California-based company, which have gained 20 percent of their value in the last one year, were down 17 percent at $14.12 in premarket trading. They had closed at $17.14 on Monday on the Nasdaq.

Please contact www.thestreetbeat.com for interest in our latest investor relations platform the “CEO Interview Series” with its host Steve Kanaval. The package includes a one-on-one interview with a seasoned industry professional; published segment to our web site with embedded audio/video file; and a compressed file that can be easily e-mailed out to your current and/or potential investors. Please e-mail bflautt@gmail.com or call (662) 392-0740 for pricing and scheduling.

StreetBeat Disclaimer

Distributed by Viestly

Targacept (Nasdaq: TRGT), AstraZeneca (NYSE: AZN) pull failed depression drug candidate

Orlando, FL 3/20/12 (StreetBeat) -- A drug called TC-5214 being developed by Winston-Salem biotech firm Targacept (Nasdaq: TRGT) and pharmaceutical giant AstraZeneca (NYSE: AZN), has failed to show enough positive effect as a treatment for major depressive disorder and will be shelved for now, according to an announcement from Targacept.

The failure in two newly completed Phase 3 clinical trials is disappointing but not entirely unexpected, since the same drug had also come up short in two previous Phase 3 studies in November and December. TC-5214 had shown much more promise as a adjunct treatment for depression in earlier Phase 2 trials.

The latest trials gave patients either TC-5214 or a placebo. The announcement said both groups showed about 40 percent improvement on a scale that measures depression severity, meaning the new drug didn’t have any measurable clinical effect.

That being the case, Targacept and AstraZeneca won’t be pursuing a New Drug Application with the FDA for TC-5214 related to major depressive disorder, said Targacept CEO Don deBethizy. He said the earlier Phase 3 results prompted Targacept to carefully evaluate its business, and he said the company will announce further plans by the end of April.

“Targacept has built a deep and mechanistically diverse clinical pipeline, and, with multiple [drug candidates] in Phase 2 development in areas of large medical need and commercial opportunity and over $225 million in cash, we are well positioned for future success,” he said.

Targacept shares took a big price hit when the earlier Phase 3 failures were announced, falling from near $20 per share last fall to a recent low of $5.31 in January. They closed at $7.41 on Monday, prior to the announcement of the latest trial failures.

StreetBeat Disclaimer

Distributed by Viestly

Theravance (Nasdaq: THRX) Shares Slide on Lung Drug Deaths

Tallahassee, FL 1/912 (StreetBeat) – Theravance (Nasdaq: THRX) shares slumped Monday after pneumonia-related deaths were reported in patients taking the company's experimental lung drug Relovair.

GlaxoSmithKline (NYSE: GSK), Theravance's Relovair development partner, sad it plans to seek U.S. and European regulatory approvals in the middle of the year based on the just-completed phase III program in chronic obstructive pulmonary disease (COPD) and asthma.

But questions about mixed results from these Relovair studies, safety concerns and perhaps a recognition that Theravance's chances of being acquired by Glaxo have now dimmed, all conspired to drop the value of Theravance shares by $6.72, or 33%, to $13.46 in early Monday trading.

Glaxo has been working with Theravance to develop Relovair as a follow-on drug to Advair, which brings in about $8 billion in revenue for the Big Pharma giant. Relovair is important because Advair has been gradually losing market share to AstraZeneca's (NYSE: AZN) more convenient asthma and COPD medicine Symbicort.

As reported Monday, Relovair beat Advair at all tested doses in one large phase III study of COPD patients. But in a second COPD phase III study, Relovair at its highest dose failed to beat Advair.

Glaxo said it was investigating reports of "fatal pneumonia" in patients treated with Relovair, primarily at the highest dose tested.

Likewise, a large phase III trial program in asthma didn't produce pristine results. A 12-week study of Relovair versus placebo failed to demonstrate a statistically significant difference in lung function. Likewise, a 24-week study of Relovair compared to another asthma medicine failed a predefined superiority test of lung function.

"Having undertaken an initial assessment of these data we believe they support our plan to seek global approvals of this once-daily medicine for the treatment of patients with COPD and asthma," said Glaxo's Darrell Baker, in a statement.

StreetBeat Disclaimer

Distributed by Viestly

Targacept Depression Drug Fails Late-Stage Study, Shares Plunge 57%

Palm Beach, FL 11/8/11 (StreetBeat) -- Targacept Inc. (Nasdaq: TRGT), developer of an experimental depression treatment with AstraZeneca Plc (NYSE: AZN), had a record drop after the companies said the drug failed to meet the main goal of a clinical trial.

Targacept fell 57 percent to $8.14 at 10:37 a.m. New York time, after earlier sinking to $8.46 for the biggest intra-day decline since the company sold stock to the public in April 2006. The shares had fallen 28 percent this year before today.

The drug, TC-5214, was tested as an add-on treatment in the trial in patients with major depressive disorder for whom antidepressants alone didn’t work, London-based AstraZeneca and Targacept said in a statement today. The medicine didn’t meet its primary goal of change on the Montgomery-Asberg Depression Rating Scale (MADRS) after eight weeks of treatment with TC-5214 as compared with placebo, the companies said. The MADRS scale measures depressive symptoms and is commonly used in clinical studies.

TC-5214 is Targacept's lead pipeline product so Tuesday's clinical trial failure is a major setback. Targacept and AstraZeneca provided few details in Tuesday's media announcement so its unclear what actually happened in the trial and what it means for the remaining three phase III studies still underway. Data from those studies are expected next year.

The main phase II study of TC-5214 conducted in 2009 produced spectacular results. TC-5214's efficacy was so strong that some investors thought the data were too good to be true, especially because the study was conducted largely in India. AstraZeneca believed in TC-5214 enough to license the drug from Targacept in late 2009 for blockbuster terms.

StreetBeat Disclaimer

Distributed by Viestly

Planned Clinical Trials at Dana-Farber/Harvard University Cancer Center a Big Deal for Little Cellceutix (OTCQB:CTIX)

Cellceutix Corporation (OTCQB:CTIX) disclosed that it has signed a laboratory agreement with Dana-Farber Cancer Institute, Harvard University’s cancer hospital, for its planned Phase I clinical trial for Kevetrin™, Cellceutix’s novel cancer compound for the treatment of drug-resistant cancers. While entering clinical trials is a milestone event for any biotechnology firm, having the trial at the world’s number one cancer research center speaks volumes for the potential of Cellceutix and Kevetrin™. DF/HCC, is afforded the ability to be extremely selective as to which drugs in development it will devote its resources and they do not seem to pick a small drug maker very often.

Of course, there are a whole host of big pharma that have conducted, or are conducting, clinical trials at DF/HCC including the likes of Pfizer, Inc. (NYSE:PFE), Astrazeneca PLC (NYSE:AZN) and Eli Lilly & Co. (NYSE:LLY), but small caps are few and far between. Although they may exist, no Over the Counter or OTCQB-listed companies were found, further showcasing the extreme rarity of Dana-Farber/Harvard Cancer Center agreeing to host a clinical trial of a small, pre-clinical company.

While a trial at DF/HCC, by no means implies impending achievements or drug approval by the Food and Drug Administration, some major drugs have come through the cancer center and have led to great successes for companies. Millenium Pharmaceuticals researched bortezomib (Velcade®) at Dana-Farber as an indication for multiple myeloma. Velcade® received FDA clearance in only seven years after initial synthesis even with early-stage trials moving notably slow as the drug moved through three different companies at first. Millenium was bought by Takeda Pharmaceutical Company (TSE:4502) in April 2008 for nearly $9 billion with Velcade® as its flagship product which is still undergoing research at Dana-Farber for different indications.

It is an arduous endeavor to seek approval for clinical trials at the world’s elite cancer center as each and every component of the initial review process can be painstakingly slow as a result of required procedural assessments. One can only imagine the number of committees that review the application. Unlike other hospitals which may provide a more expeditious service, the recognition and expertise that accompanies an outfit like Dana-Farber/Harvard Cancer Center showing a desire to research a particular drug is well worth the patience.

Having clinical trials hosted at DF/HCC should place Cellceutix at the forefront of developmental biotechs of all sizes, regardless of exchange listing; especially those in Phase I and a good portion of those in Phase II at lesser-known cancer centers. While no hospital ensures a positive outcome to clinicals, it could be discerned that odds are increased due to the selective nature of compounds that are permitted to enter trials at DF/HCC. Moreover, due to Kevetrin™ targeting drug-resistant cancers, Cellceutix will be researching their drug on terminal cancer patients (their ideal candidate) which raises the bar during Phase I as not only will the primary endpoint of safety be evaluated, but the possibility of efficacy being shown is a reality of the trials. Any sign of efficacy for a completely novel compound significantly increases the odds of expeditious development designations from the FDA.

Novel drugs are a hot commodity for any indication at the moment. Pharmasset, Inc. (NASDAQ:VRUS) is developing PSI-7977 as a treatment for Hepatitis C and posting strong results. The data has helped drive shares of VRUS northward by more than 250 percent so far this year to the $80 range (which would actually be $160 per share except for a 2 for 1 forward split in August). Split-adjusted shares were as low as $3.81 for VRUS just 2-1/2 years ago. Only in Phase II with its drug, Pharmasset boasts a nearly $6 billion market cap and serves as a solid reminder to followers of Cellceutix (with its current $32 million market cap and $0.37 per share price tag) as to what can happen in the mid-term with a potent drug candidate.

Cellceutix and Kevetrin™ have apparently impressed Dana-Farber/Harvard Cancer Center and its associates. Moreover, Cellceutix has Dr. Krishna Menon at the research helm as Chief Scientific Officer. Dr. Menon knows a bit about developing successful drugs from his time as a lead researcher at Eli Lilly where he won a President’s Award for his work in the development of multi-billion dollar cancer drugs Gemzar and Alimta. In June of this year, commenting on the robust pre-clinical research the has been generated studying Kevetrin™ on many different strains of cancer including breast, colon, lung, pancreatic and leukemia, Dr. Menon stated in a Cellceutix press release, “In all my years as a researcher, I have never seen anything like Kevetrin™.” That’s a strong statement and certainly food for thought about where Cellceutix could be in the near future.

Distributed by Viestly