In depth article--notice part where analyst recommend buying PTE on the dips
January 29, 1999
Dow Jones Newswires
Peptide Therapeutic Shares Fall 6.5% On
Rights-Issue
By MICHAEL REID
Dow Jones Newswires
LONDON -- Having carved out a hefty 40%-plus rally earlier this week,
shares of Peptide Therapeutics PLC (U.PTG) eased back Friday after the
vaccines developer unveiled a four-for-five rights issue to raise GBP20.6
million.
Peptide will issue about 29.3 million shares at 78 pence a share.
Peptide shares, which closed Thursday at 116 pence after beginning the week
at 81 pence, were down 7.5 pence, or 6.5%, to 108.5 pence on the news at
1000 GMT Friday. They had peaked at 125 pence at Tuesday's close before
softening on profit-taking Wednesday and Thursday.
Despite that, some analysts are still advising investors to buy on the dip, as
some see the stock's long-term valuation way above current levels. Peptide's
healthy rally this week was fueled by press tips last week and consolidation
rumors.
Fulfilling that prophecy in part, Peptide also unveiled Friday a strategic
alliance with France's Pasteur Merieux Connaught SA (F.PMC), the world's
largest vaccine company. The licensing and development pact will focus on
research vaccines using OraVax's ChimeriVax platform technology.
OraVax is the American company Peptide bought in November, a deal
Peptide expects to provide product candidates, research projects, a greater
reach into the U.S. vaccine research field and improved access to in-licensing
and product acquisitions in the U.S.
All that is apart from the potential long-term income from U.S. sales of
Arilvax - a yellow-fever vaccine which will undergo a registration trial in
1999. It's being developed in conjunction with Medeva PLC (MDV).
As part of the deal, Pasteur has agreed to subscribe to $3 million of the new
Peptide shares.
- - 29/01/99 10-05G
Pasteur will get a worldwide exclusive license to use the ChimeriVax
technology to develop vaccines against Japanese encephalitis and tick-borne
encephalitis. It will fund all future research and development costs.
There will also be a second license to develop a vaccine against Hepatitis C.
The joint venture partnerships formed between Pasteur and OraVax will get a
worldwide exclusive license to use ChimeriVax to develop that vaccine.
Pasteur and Peptide will contribute equally to those costs and share the sales
benefits.
Peptide said that under the new deal, and an existing license agreement
covering the Dengue Fever vaccine, it could receive milestone and license fees
of up to $60 million and royalties on sales of licensed products that use the
ChimeriVax technology.
"We are bringing together complementary vaccine product portfolios and
considerable expertise in the development of therapeutic and preventative
vaccines which are aimed, in particular, at the travelers' market and the
treatment of infectious diseases," said Peptide Chief Executive John Brown.
The ChimeriVax technology was developed by OraVax for the construction
of vaccines against a number of viral infections which include Dengue Fever,
Japanese encephalitis, Tick-borne encephalitis and Hepatitis C.
The underlying technology was developed jointly by OraVax and St. Louis
University, and licensed to OraVax.
Japanese encephalitis is an untreatable viral disease transmitted by
mosquitoes, which occurs in major epidemics in parts of Asia and the Pacific
region. Rapid economic development in the Pacific Rim countries has greatly
increased exposure to the virus. The number of cases can vary from 10,000
to 50,000 a year and the mortality rate is between 10% and 40%. Up to one
third of survivors suffer severe neurological damage.
Tick-borne encephalitis causes severe illness and deaths in eastern Europe
and the former USSR. Existing vaccines are expensive and require multiple
doses for primary immunization and booster doses.
-By Michael Reid; 44-171-832-8163; mreid@ap.org |
