The spate of good news from a handful of companies last week generated plenty steam for the sector as a whole. The BioCentury 100 Price Level rose was up 4 percent on the week, while the aggregate market cap of the 11 companies in The Carson Life Sciences Indexes gained $1.3 billion (4 percent) and the total market value of the 190 companies in the Carson Small Cap index gained almost $1 billion (5 percent).
With one trading day left in the quarter, the BioCentury 100 is up five of the last seven weeks, or 7 percent. The index, which closed the week at 1711.59, has bounced twice in the quarter when it bottomed in the 1125 range.
Technology questions at both Protein Design Labs (PDLI) and Magainin (MAGN) were vindicated by solid results of their flagship products. PDLI was the big winner, closing at $24, up 51 percent on the week (see graph, A3). MAGN, which gained $1 on Wednesday's news to $12.875, pulled back slightly over the remainder of the week, closing at $11.625, up 4 percent (See BioCentury Extra, Sept. 26).
Diacrin was up 31 percent, gaining $2.375 to $10.125, after announcing a joint venture in Parkinson's and Huntington's diseases with Genzyme Tissue Repair. GENZL received an even bigger boost, climbing $3.375 (47 percent) to $10.625.
On the rumor side, Cephalon (CEPH) surged on Friday, closing up $2.25 to $22.875 on 3.2 million shares. The stock gained $5.25 (30 percent) on the week. Scuttlebutt was that the company was "in-play" and that partner Chiron was considering buying the company. A second rumor claimed that Fidelity was buying a large stake in the open market. "The stock is up three-and-a-half and no one knows anything," said Mitch Silber, a partner at The Carson Group, at mid-day. CEPH, which had been as high as $24.625 on the day, closed at $18 on Wednesday.
CEPH spokesperson Jason Rubin said the company does not comment on rumors, but acknowledged that he'd heard them over the course of the day.
The bounce apparently has created an opportunity for some companies to raise public money. Seven companies raised a total of $133 million last week. Perhaps noteworthy is that Ligand (LGND), with $57 million in cash as of June 30, filed a 2.75 million share follow on. The stock wasn't heavily discounted on the news, closing the week at $14.125, down $0.375.
NEW TO MARKET: Algos Pharmaceuticals Corp. (ALGO) raised $49 million through the sale of 3.5 million at $14. The offering gives the Neptune, N.J., pain management company a $217 million market cap. ALGO's strategy is to combine existing analgesic or anesthetic drugs with N-methyl-D-aspartate (NMDA) antagonist drugs that are already approved. The company has completed pivotal trials with MorphiDex, a narcotic analgesic, in moderate to severe pain (primary cancer pain). . . . NeoTherapeutics Inc. (NEOT) raised $19 million through the sale of 2.5 million units at $7.60. The Newport Beach, Calif. company, which is developing treatments for neurodegenerative diseases, has 5.2 million shares outstanding. President and chairman Alvin Glasky owns a quarter of the company after the deal.
MARKET HOPEFULS: Phytogen Life Sciences Inc. filed a preliminary prospectus for an IPO in Canada. The company (Delta, B.C.) hopes to raise between C$25-C$30 million (US$18.25-US$21.9 million). At C$10 market price would give the company a C$84 million (US$61 million) market cap. Phytogen, which develops drugs from natural sources, has an agreement under which Mylan Pharmaceutical is using Phytogen's bulk pharmaceutical paclitaxel to formulate a generic version of paclitaxel. . . . CV Therapeutics filed silently for an IPO in hopes of raising up to $34.5 million. In May, the cardiovascular company (Palo Alto, Calif.) raised $13 million in private financing. It has raised $52 million since its inception in 1992.
PRIVATE COMPANY/PUBLIC STRATEGY: Cell Therapeutics raised $15 million in private financing, which is the first of a two-part strategy before the Seattle-based cell signaling company tests the IPO waters again. "The company still plans to file for an IPO sometime during this calendar year," according to spokesperson Lee Parker, "The first piece of the puzzle is in place." Now the company (Seattle, Wash.) needs to complete a corporate deal. In June the company postponed a 3.5 million share IPO at a maximum price of $11, citing unfavorable market conditions. "The IPO market has not recovered yet," said Parker, "but there are always some deals that get done in any IPO market."
A LITTLE AROUND THE EDGES, PLEASE: BioCryst (BCRX) got a haircut on its follow-on that raised $20 million through the sale of 2 million shares at $10. Over the 64-day road show, the drug discovery company's stock dropped $6.75, or 40 percent.
DON'T SHOW UP EARLY: Interneuron (IPIC) will meet with a FDA panel on Nov. 22 to discuss its post-marketing trial of its Redux obesity treatment, not on Nov. 8, as reported by the Wall Street Journal. "I'm not sure how that got floated out there," said IPIC spokesperson Bill Boni.
UNRUFFLED: The markets didn't pay much attention to the announcement that British Biotech partner Glaxo Wellcome had passed on its option to negotiate a licensing agreement for Lexipafant in asthma. BBIOY said Glaxo's Phase II trial of the drug showed no significant improvement in respiratory function in asthma patients compared to placebo. Investors may be focusing on the bigger picture for the drug. BBIOY recently completed recruitment in a European Phase III trial of Lexipafant in acute pancreatitis. BBIOY also continues to work with Glaxo with the drug oral in multiple sclerosis, and with BB-2983 in arthritis. BBIOY ADSs closed the week at $34.125, up 4 percent.
MANAGEMENT TRACKS: Chiron Therapeutics named Magnus Lundberg president of the CHIR business unit. Lundberg spent the last 15 years at Pharmacia, most recently as head of its metabolic diseases. . . . Anika Research (ANIK) named J. Melville Engle as president and CEO. He held the same positions at US Medical Products (USMD), a distributor of orthopedic implants. . . . Biological Detection Inc., a screening company in Pittsburgh, Penn., appointed D. Lansing Taylor as president and CEO. Taylor has been director of the National Science Foundation Center for Light Microscope Imaging and Biotechnology, and the vice-dean for molecular sciences at Carnegie Mellon University.
Ebb & Flow: Guilford (GLFD) gained $1.625 to close at $29.25 on Tuesday after the FDA approved the company's brain cancer product (see BioCentury Extra, Sept. 25). But it closed Friday at $28, down 5 percent on the week. . . . Shaman (SHMN), long out of the limelight, gained 15 percent, closing the week at $6.875, on the news of a diabetes deal with Lipha S.A. of France.