Gruntal Report;
Millennium Pharmaceuticals, Inc.# (MLNM - $21.47 a/o 8:00 AM EST, 2/13/02)
1-1(Outperform-Outperform)
Intermediate Target Price: $49
Long Term Target Price: $57
Suitability: Aggressive Risk
Millennium Pharmaceuticals Closes Merger With COR Therapeutics; Reiterate 1-1
"Yesterday, Millennium announced the closure of the company’s merger with COR Therapeutics (CORR-NASDAQ, $20.75, not rated), which became effective following the approval of the companies’ respective shareholders. Millennium will issue 0.9873 shares for each CORR share outstanding and the combined company will retain the name Millennium Pharmaceuticals, Inc., with worldwide headquarters in Cambridge, Massachusetts.
As a result of the merger, Millennium now has a total of approximately 1,200 scientists in R&D, and has added a new
therapeutic area in cardiovascular research to the company’s discovery effort, which had previously consisted of oncology,
metabolic, and inflammatory diseases. Millennium’s cardiovascular franchise is led by Integrilin (eptifibatide), the leading GP IIb-IIIa platelet inhibitor for acute coronary syndromes, with 2002 revenue expectations of approximately $300 million.
On February 6th, COR announced the publication of positive follow-up data from the company’s ESPRIT trial, which was
designed to assess the efficacy and safety of Integrilin in patients undergoing non-urgent percutaneous coronary intervention (PCI) with various intracoronary stents currently used in clinical practice. The results, which were published in the current issue of the Journal of the American Medical Association (JAMA) illustrated that one year following intracoronary stenting, Integrilin led to a significant reduction in the incidence of death or heart attack from 12.4 percent with placebo to 8.0 percent (P=0.0010).
We expect Millennium’s track record of successfully integrating previous acquisitions to continue with the successful integration of COR’s assets. Millennium will assume approximately $600 million in convertible debt that was issued by COR through two offerings. We expect Millennium to propose extending the life of the convertible debt under more favorable terms to current holders in order to avoid using cash to buy the notes at face value and issuing stock at these currently depressed levels.
Millennium currently has 10 drug candidates in clinical trials and we expect a significant amount of clinical news flow in 2002. In the near-term we expect investor interest to be driven by a clinical update from the CRUSADE trial for Integrilin at the ACC meeting in March and results from the phase II trial for MLN341 in relapsed refractory multiple myeloma as well as updates from various combination studies for MLN-341 at ASCO in May.
We continue to believe that Millennium Pharmaceuticals is one of the best-positioned companies to translate gene discovery into drug compounds. We continue to rate Millennium shares a 1-1 outperform, and expect investor interest to increase as the company broadens the development of its three current franchise areas: oncology, inflammation and metabolic disease over the next 12 to 18 months and successfully integrates the assets of recent acquisition, COR Therapeutics, which will add a fourth franchise area, cardiovascular disease." |
