Sorry, doesn't clean up too well. Now you'll tell me what to buy, right? ;-) Lots of reading and thinking to do on just this alone.
[BRIEFING.COM -- Robert J. Reid] Based on the number of biotech deals coming to market this year, one would surmise that the group is experiencing strong demand. A few deals have done well, but the vast majority have floundered. Biotech offerings continue to face downwardly revised price ranges; and, despite a number of these deals breaking their offering prices, underwriters continue to bring biotechs public. However, where there is misery, investors/traders often find opportunity. Today we look at some of the biotech deals that have come to market this year. The goal is to provide a hit list of broken deals for traders to refer to should the biotech market heat up later this year.
Email Us: If you have any questions, stock ideas or comments, email rreid@briefing.com.
Recent Biotech IPOs
Stock (Began Trading) Ticker Underwriter Current Price Offering Price Description
Acadia Pharma (5/27) (ACAD) BofA and Piper 6.66 7.00 Acadia focuses on small molecule drugs for the treatment of central nervous system disorders. It has five drug programs in clinical and preclinical development. The co has 3 clinical programs for treatment-induced dysfunction in Parkinson's disease currently in Phase II clinical trials.
Alnylam Pharma (5/28) (ALNY) BofA 6.81 6.00 Alnylam Pharma priced its IPO at $6, at the low end of an already drastically reduced range of $6-$8. Its initial range had been $10-$12. The co seeks to develop drugs based on a recently discovered biological pathway known as RNA interference, or RNAi. The co believes that RNAi therapeutics have the potential to become a major class of drugs. Its current Direct RNAi programs are focused on age-related macular degeneration and Parkinson's disease. The co expects to initiate a clinical trial for its lead AMD product candidate in 2005.
Anadys Pharma (3/26) (ANDS) SG Cowen 7.20 7.00 Co's IPO priced at $7, at the low end of the expected $7-$8 range. Co is committed to the treatment of hepatitis C virus, or HCV, and bacterial infections... On May 11, Anadys Pharma started with a Hold at Legg Mason; tgt $9.... On June 15, Anadys Pharma started with a Buy at Needham; tgt $11 for 3 main reasons: 1) addresses major mkts in hepatitis B and C, developing two potential first line oral therapeutics that are also additive to currently available medications; 2) centers around a strong mgmt team that has demonstrated the ability to identify and deliver infectious disease products and build a global product development program; and, 3) includes a robust medicinal chemistry/development platform that led to the oral form of its lead isatoribine compound, ANA975, and the potential to generate one new IND filing each year.
Barrier Therapeutics (4/29) (BTRX) Morgan Stanley 14.00 15.00 Co's IPO priced at $15, in the middle of the expected $14-$16 range. Co is focused in the field of dermatology. It has eight product candidates in various stages of clinical development. The four most advanced are in or entering Phase III clinical trials. The co believes there is a significant commercial opportunity for a co focused specifically on the treatment of dermatological diseases, given the fragmented nature of the dermatology market and the clinical limitations of currently approved treatments
Cogentech (2/12) (CGTK) CSFB and Lehman 16.28 16.00 Corgentech priced its IPO at $16, at the high end of its expected $14-$16 range. Co focuses on a gene-related therapy called transcription factor decoys for the treatment of cardiovascular and inflammatory diseases such as arthritis and cancer. ... On May 25, CIBC initiated with an Outperform and $27 target as its lead product, E2F Decoy, is currently in two Phase 3 trials that have completed enrollment for the prevention of vein graft failure. This market has $2 bln potential. The co has a strong validating partnership with BMY. Corgentech has received $45M in upfront payments and has co-marketing rights; profits will be shared 50/50.
Corcept Therapeutics (4/14) (CORT) Thomas Weisel and Piper 10.00 12.00 Priced its IPO at $12, below the expected $15-$17 range. The co makes drugs to treat severe psychiatric and neurological diseases. Its lead product candidate, Corlux, is currently in Phase III clinical trials and has been granted fast track status by the FDA for the treatment of the psychotic features of psychotic major depression... On May 25, stock was initiated with Outperform and $20 tgt at Thomas Weisel based on fully taxed FY07 EPS estimate of $1.15 (discounted 30% annually). Corlux, the co's first pipeline product, is about to enter phase III trials to treat psychotic major depression. PMD patients suffer from hallucinations, delusions and severe depression and are 70x more likely to commit suicide than the general population. There is currently no FDA-approved drug for PMD. The firm expects pivotal Phase III trials will begin in 3Q04 and will be completed in 1H06. As the drug has been granted fast track status, the firm expects a 1Q07 launch, then to rapidly gain market share upon launch.
Critical Therapeutics (5/27) (CRTX) SG Cowen 7.00 7.00 CRTX focuses on products designed to treat asthma and critical care diseases through the regulation of the body's inflammatory response. Its most advanced product is Zyflo, a tablet formulation of zileuton, which the FDA approved in 1996 for the prevention and chronic treatment of asthma. The co licensed from Abbott Labs exclusive worldwide rights to Zyflo. The co is in the process of changing manufacturing sites for Zyflo, and subject to FDA approval of these sites, it expects to begin selling Zyflo in the first half of 2005
Cytokinetics (4/29) (CYTK) Goldman 15.89 13.00 Cytokinetics priced its IPO at $13, at the high end of its expected $11-$13 range. Co focuses on the cytoskeleton, a complex biological infrastructure that plays a fundamental role within every human cell. A growing body of research validates the role that the cytoskeleton plays in a wide array of human diseases. Its focus on the cytoskeleton enables it to develop novel and potentially safer and more effective classes of drugs directed at cancer, cardiovascular disease, fungal diseases etc... On June 15, Lazard initiated with a Buy and $20 target; firm expects the co to have 3 drug candidates in clinic by year-end 2004, and notes that lead drug candidate SB-715992 is currently in broad Phase II development, and they expect data from a Phase II NSCLC trial evaluating SB-715992 by year-end 2004; also, firm notes that initial signals of efficacy for SB-715992 in Phase I testing and co-development agreement with GlaxoSmithKline offers validation to CYTK's drug-discovery platform.
Dynavax (2/19) (DVAX) Deutsche and Bear Stearns 8.96 7.50 Dynavax Technologies priced its IPO at $7.50 per share, well below the expected $12-$14 range. Its programs are based primarily on proprietary immunostimulatory sequences, or ISS, which are short DNA sequences that reprogram the immune system's response to infectious pathogens and enhance its ability to fight disease and control chronic inflammation. Based on results from Phase II trials, the co plans to initiate Phase III trials for two ISS-based product candidates in 2004. The co also has a third product candidate in early Phase II trials and a number of earlier stage clinical and preclinical programs...... On Mar 31, Deutsche Bank started with a Buy and $16 tgt. The firm believes that Dynavax's flagship product, AIC for allergic rhinitis resulting from hay fever, represents a potential advance over conventional allergy immunotherapy (AIT), offering sustained efficacy with significantly fewer injections. They expect DVAX to have first fully profitable year in 2008 and call current risk/reward profile favourable as the co is set to become a major player in the allergy immunotherapy market. The 12-month price target of $16 implies a forward P/E-to-growth rate (PEG) ratio of 1.5 with current technology value of $118 mln representing a 60% discount to peer group of companies.
GTx, Inc. (2/3) (GTXI) Goldman 12.24 14.50 GTx, a men's health biotech co, priced its IPO at $14.50, towards the high end of the expected $13-$15 range. The co's most advanced product candidate is Acapodene, a prostate cancer drug. A second product candidate, Andarine, is being developed to treat a muscle-wasting condition from various types of cancer... On Mar 17, inked a licensing pact with Ortho Biotech; to receive upfront licensing fee, milestones.... On June 2, co announced positive positive Phase IIb data for Acapodene for the prevention of prostate cancer in high risk men.
Immunicon (4/16) (IMMC) UBS 8.01 8.00 Immunicon priced its IPO at $8, well below its expected $12-$14 range. The co develops cell-based research and diagnostic products with an initial focus on cancer. Its CellTracks line, can identify, count and characterize a small number of tumor cells present in a blood sample from a patient. The co's collaborator, Veridex, a Johnson & Johnson company, received 510(k) clearance from the FDA in January for use of the CellSearch Epithelial Cell Kit in the management of metastatic breast cancer. In addition, the firm believes its technologies may have applications in other fields of medicine, such as cardiovascular and infectious diseases.... On May 12, Immunicon spiked 10% after stock was written up in nanotech newsletter.
Inhibitex (6/4) (INHX) Thomas Weisel 7.05 7.00 Inhibitex priced its IPO at $7, well below the expected $10-$12 range. It has two product candidates in late-stage clinical development and three product candidates in preclinical development. Veronate, its lead candidate, is being developed for the prevention of hospital-associated infections in premature, very low birth weight infants. There were 60,000 such infants born in the US in 2001 and 30%-50% will develop at least one hospital-associated infection.Its second product candidate, Aurexis, is currently being evaluated in a Phase II clinical trial as a first-line therapy to treat serious, life-threatening Staphylococcus aureus bloodstream infections in hospitalized patients.
Metabasis Thera (6/16) (MBRX) SG Cowen 6.51 7.00 Co priced its offering at $7, at the low end of an already lowered range of $7-$8. The co focuses on drugs principally to treat metabolic diseases linked to pathways in the liver and to treat liver diseases. Examples include diabetes, hyperlipidemia, a disease involving elevated levels of lipids such as cholesterol, and obesity. The co has three product candidates in clinical trials indicated for the treatment of type 2 diabetes, hepatitis B and primary liver cancer.
Memory Pharma (4/5) (MEMY) SG Cowen 7.10 7.00 Co is focused on developing drugs for the treatment of debilitating central nervous system disorders such as Alzheimer's disease, depression, schizophrenia, vascular dementia, Mild Cognitive Impairment, and memory impairments associated with aging.
Renovis (2/5) (RNVS) Goldman 11.55 12.00 Renovis, a biotech firm specializing in neurological diseases, priced its IPO at $12, below the expected $13-$15 range. The co is pursuing eight distinct programs, including three product candidates in clinical development. The co's most advanced candidate is Cerovive, an intravenous drug for acute ischemic stroke. Cerovive is being evaluated in a Phase III clinical trial program. The co's goal is to file one investigational new drug application in 2004 and another in 2005.
Santarus (SNTS) SG Cowen 14.78 9.00 Santarus priced its IPO at $9, in-line with its expected range, but the original range had been $11-$13. The co is a specialty pharmaceutical co focused on the treatment of gastrointestinal diseases. Its primary focus is next generation proton pump inhibitor, or PPI, products - the most frequently prescribed drugs for the treatment of many upper gastrointestinal diseases. The PPI market, including five delayed-release PPI brands, had U.S. sales of $12.9 bln in 2003. The company has completed Phase 3 studies and has applied to the FDA to approve its drug Rapinex. The drug is a reformulation of a key ingredient in approved heartburn medications. Pill versions of those drugs are available only in delayed-release formulations, while Santarus is seeking approval for a fast-acting version. ... On Jun 15, co won FDA approval for Rapinex Powder for Oral Suspension 20mg.
Tercica (TRCA) Lehman 8.42 9.00 Co priced its IPO at $9, below the downwardly revised range of $11-$13. This was revised lower from an initial range of $14-$16. The co is focused on the development of recombinant human insulin-like growth factor-1, or rhIGF-1, for the treatment of short stature, diabetes and other endocrine system disorders.... On April 26, Tercica started with an Outperform at Baird, tgt $20.... On June 2, Harris Nesbitt started with an Outperform and $17 target.... On June 3, Tercica started with an Overweight at Lehman; tgt $24.
Xcyte Therapies (XCYT) Piper 4.11 8.00 Co is developing novel therapies that harness the power of the immune system to treat cancer and other serious illnesses. Xcyte derives its therapeutic products from a patient's own T cells. Xcyte uses its patented and proprietary Xcellerate Technology to generate activated T cells, called Xcellerated T Cells, from blood that is collected from the patient. Activated T cells are T cells that have been stimulated to carry out immune functions. The Xcellerate Technology is designed to rapidly activate and expand the number of the patient's T cells outside of the body. These Xcellerated T Cells are then administered to the patient.... On May 4, Xcyte Therapies started with an Outperform at JMP; tgt $10. |
