Feuerstein took that from the current Barron's:
Genta is a biotech company in Berkeley Heights, N.J., that has one interesting cancer drug in development and one interesting shareholder. Genesense is the drug, and the company hopes to report results this summer from pivotal Phase III trials against three types of cancer.
Dr. Lindsey A. Rosenwald is Genta's controlling shareholder. Hedge funds managed by his Manhattan-based Paramount Capital have held the biggest block of Genta since 1997. Before founding Paramount in 1991, he was a top investment banker at the now-disgraced and defunct underwriting firm D.H. Blair. He left that firm before the period covered by Blair's subsequent guilty pleas to fraud charges last year.
June Earnings are Coming: The Nasdaq Composite Index gained 4.2%, to close Friday at 1734. Although Yahoo sold off after meeting, but not beating, second-quarter estimates, analysts foresee decent numbers when other techs report June-quarter results.
The May 2003 proxy filing for Genta shows the Paramount funds, and Rosenwald himself, with various securities equivalent to about 41% of Genta's common stock. At Wednesday's high of 15.10, those shares would be worth nearly half a billion dollars.
Wednesday was also the date of a filing with the U.S. Securities and Exchange Commission, in which Paramount said it was distributing almost 5.5 million Genta shares to Paramount investors. Those investors lack Paramount's affiliation with Genta, so they're free to sell the stock.
Does Paramount know something about how Genta's pivotal trials are turning out? "We have no information about the trial data at all," said Paramount spokesman Jonathan Gasthalter, on Friday. "This distribution does not reflect in any way at all the funds' view with regard to the prospects of Genta." Paramount's distribution to its shareholders fulfills a pre-existing obligation, he said.
Moments later, I got a call out of the blue from Genta's spokeswoman Tara Spiess. The company is still on track to announce results from the Genesense trials this summer, she assured me, but even Genta hasn't yet seen the results.
"We're all very excited here," said the Genta spokeswoman. Let's hope the holders of those 5.5 million shares will remain excited, too.
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