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

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