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Pfizer, Glaxo, J&J Grab ASCO Spotlight

Wed, 16 May 2012 18:01:00 EDT

BOSTON (TheStreet) -- New drugs from Pfizer and GlaxoSmithKline that precisely target genetic weaknesses in cancer were given spotlight treatment Wednesday night by the American Society of Clinical Oncology (ASCO) in a preview of its upcoming and closely followed annual meeting.

ASCO officials also highlighted a mid-stage study of Johnson & Johnson's Zytiga in early-stage (pre-surgical) prostate cancer patients. Later during the ASCO meeting, which starts in two weeks, J&J will present new Zytiga results from a phase III study in more advanced prostate cancer patients.

In all, ASCO released more than 4,500 research abstracts, or clinical summaries, of new cancer drug data Wednesday night in advance of its annual meeting. ...

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ASCO '12 Abstract Dump: Cancer Stocks in Focus

Wed, 16 May 2012 18:00:00 EDT

BOSTON (TheStreet) -- Investors got their first look at thousands of cancer drug research abstracts released Wednesday night by the American Society of Clinical Oncology (ASCO) in advance of its closely watched annual meeting.

Among the most significant cancer drug data unveiled for the first time Wednesday night came from phase III studies conducted by Aveo Pharmaceuticals and Exelixis, and randomized phase II studies of drugs discovered by Array BioPharma.

New disclosures of cancer drug data were also made available from Arqule, Ariad Pharmaceuticals, Pharmacyclics, Onyx Pharmaceuticals and Seattle Genetics, among many others. ...

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Hot Biotech Stocks Traded by Hedge Funds in First Quarter

Wed, 16 May 2012 07:10:39 EDT

BOSTON (TheStreet) -- Noteworthy hedge fund trading in biotech and drug stocks, culled from the 13F filings for the first quarter: Hedge funds and mutual funds that manage more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed SEC within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines. Since we're already midway through the second quarter, these positions in biotech and drug stocks may already have changed. Things that make you go "Hmmmm…." SAC Capital picks up a new, 1.2 million-share position in Ardea Biosciences during the first quarter. On April 23, AstraZeneca announces the acquisition of Ardea for $1.3 billion. RA Capital, savvy Boston investors who are particularly fluent in the hepatitis C drug market, established a new position in Biocryst Pharmaceuticals with a 3 million-share pickup. Biocryst's experimental BCX5191 won't be entered into human studies until later this year, but the drug belongs to the same "nuc" class as Gilead Sciences' GS-7977. Amylin Pharmaceuticals was a popular stock to buy in the first quarter with rumors swirling around a sale of the diabetes drug company to a Big Pharma suitor. Hedge funds Healthcor Asset Management, Calamos Advisors and Tang Capital and RedMile Group were just some of Wall Street's investor pros establishing new positions.

Not all investors are waiting around to see if Amylin is sold. Millennium Management and SAC Capital both disposed of sizeable stakes in the company during the quarter. The two funds likely took profits from the run-up in Amylin's stock price since the takeout rumors first surfaced on March 28. Human Genome Sciences, locked in a takeover fight with partner GlaxoSmithKline, showed similar pattern of opportunistic hedge fund buying and selling. Perhaps most notable is Adage Capital's liquidation of its entire 3.85 million-share position in Human Genome during the January quarter. Orbimed Advisors, with a healthcare portfolio valued at more than $3 billion, initiated new positions in Onyx Pharmaceuticals, ImmunoGen, Neurocrine BioSciences and Array Biopharma during the January quarter. Orbimed also bought new shares of Chemocentryx, which went public in February.

Biotech stock positions exited by Orbimed, as of March 31, include Pharmacyclics, Grifols, Intermune and United Therapeutics. Amarin expects an FDA approval decision on its prescription-grade fish-oil drug AMR101 on July 26. Ahead of that all-important catalyst, Millennium Management, SAC Capital and Sectoral Asset Management added significantly to their existing stakes in Amarin. New positions were established by Brookside Capital and Apex Capital. YM BioSciences received some Boston hedge-fund love in the first quarter. RA Capital and Adage Capital each bought 2.3 million and 2 million shares respectively. The same cannot be said for Balyasny Asset Management, which dumped 2.7 million shares of YM Bio during the quarter. The fund still retained a small 350,000-share stake as of March 31. Mutual fund giant bought 4.15 million shares of Arena Pharmaceuticals during the first quarter, a new position in the obesity drug company. Mutual funds still greatly outnumber hedge funds on Arena's holders list, as of the end of the first quarter. More hedge funds may have been short Arena heading into last week's FDA advisory panel. ...

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Mulling Arena Pharma's Future With Obesity Drug on Approval Path

Mon, 14 May 2012 15:09:56 EDT

SAN DIEGO (TheStreet) -- Thoughts, questions and reflections on Arena Pharmaceuticals following Thursday's FDA advisory panel, which voted 18-4 (with one abstention) to recommend the approval of lorcaserin for weight loss.

Congratulations, Arena. Well done. The company and its outside advisors did an excellent job presenting lorcaserin data to the panel. Not every argument the company made was necessarily persuasive, but it had data to back up its side. Most importantly, Arena was able to respond well to the questions and concerns raised by the experts on the panel about lorcaserin's safety -- rat tumors and cardiovascular risk, in particular.

Thinking back through the live blog of Thursday's panel, I can't recall any instance where Arena was dumbstruck or intimidated by the panelists' questions. Being well prepared is a big part of emerging from the FDA panel meat grinder with a positive outcome. ...

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A Health Care Fortnight for the Record Books

Mon, 14 May 2012 07:00:00 EDT

NEW YORK (TheStreet) -- I've been a professional investor for 15 years, and over that time I've listened to generalist investors gripe about the health care sector with mind-numbing cyclicality. Predictably, interest in health care investing often hits a nadir at the time of greatest opportunity. The complaints, which typically arise after major biotech blowups or government policy-fueled anxiety, range from absurdly broad-based assertions of disinterest (health care is "un-investable" is a common refrain) to specific anxiety about the sector's dependence on government as a payor.

Investors who dismiss the health care stocks often do so because they lack the expertise required to understand the sector. They're missing a lot. For those who think -- or have ever thought -- health care isn't a great sector for alpha generation, I present the first half of May in the year 2012, one of the busiest and most exciting two weeks for health care in recent memory. This week's column reviews -- in the first of two parts -- key events and the implications for relevant companies.

The Bapi Time Bomb Approaches ...

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Stocks to Watch: JPMorgan, Arena (Update 1)

Fri, 11 May 2012 07:35:19 EDT

NEW YORK -- JPMorgan Chase recorded a $2 billion mark-to-market loss in its synthetic credit portfolio since the end of the first quarter, the bank said Thursday.

CEO Jamie Dimon called the trade "flawed, poorly reviewed, poorly executed" and said it reflected "sloppiness" and " bad judgment."

In a conference call Thursday, Dimon said the bank's Chief Investment Office suffered a trading loss of $2 billion in its synthetic credit portfolio, offset by a $1 billion securities gain, as a strategy to re-hedge its portfolio backfired. ...

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3 Stocks Sink to 52-Week Lows

Thu, 10 May 2012 13:55:04 EDT

NEW YORK (TheStreet) -- Digital Generation, MannKind and Windstream sank to 52-week lows on Thursday.

Digital Generation

The digital technology services company reported Wednesday first-quarter net income of $988,000, or 4 cents a share, down from year-earlier net income of $12.7 million, or 45 cents. ...

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Arena Pharma: FDA Panel Live Blog

Thu, 10 May 2012 07:43:41 EDT

Arena Pharma FDA Panel Live Blog

WASHINGTON, D.C. (TheStreet) -- Arena Pharmaceuticals, the weight-loss drug lorcaserin and an FDA advisory panel: The Sequel.

For those that missed Part One, a quick recap: In September 2010, an FDA panel of experts voted 9-5 to recommend against the approval of Arena's lorcaserin. Panel members were unimpressed with the drug's mediocre efficacy and concerned about several potential safety problems, most notably a risk that a high prevalence of rat tumors could raised the cancer risk in humans. FDA followed the panel's negative recommendation and rejected lorcaserin. ...

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Pass on These IPOs

Thu, 10 May 2012 05:30:00 EDT

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Glaxo's Bid for Human Genome Turns Hostile: Hot Trends

Wed, 09 May 2012 08:48:43 EDT

NEW YORK (TheStreet) -- Popular searches on the Internet include GlaxoSmithKline as the company will go hostile with its $13-a-share cash tender offer for Human Genome Sciences, taking its bid straight to shareholders this week.

The decision comes after Human Genome's board rejected Glaxo's $2.6 billion bid last month, saying it did not reflect the inherent value of the company. Glaxo stands by its bid, which represents an 81% premium. Glaxo has not indicated when the tender would be launched this week. When it is, it will remain open for 20 business days.

The two companies sell Benlysta together and currently are working on two other experimental drugs, which Glaxo would receive full rights to if it purchases Human Genome. ...

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FDA's Review of Arena Pharma's Obesity Drug Sunnier Than Expected

Tue, 08 May 2012 12:10:23 EDT

Updated with correction to accurately describe the 6% mean weight-loss observed in the lorcaserin phase III trials.

SAN DIEGO (TheStreet) -- The FDA's review of Arena Pharmaceuticals' weight-loss drug lorcaserin is... and it's more positive than I expected.

The outcome of Thursday's FDA advisory panel is still unknown, of course, but Arena bulls (the "Areniacs") should feel more confident in a positive vote recommending lorcaserin's approval. ...

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Vertex Is the Next Gilead Sciences or Alexion

Mon, 07 May 2012 16:06:11 EDT

CAMBRIDGE, Mass. (TheStreet) -- Vertex Pharmaceuticals is the next Gilead Sciences. You think I'm reaching? Okay, then Vertex is the next Alexion Pharmaceuticals.

Either way, the big move higher in Vertex's stock price Monday, spurred by the release of strong cystic fibrosis data, is totally justified and likely undervalues the company going forward.

Vertex shares rose $20.71, or 55%, to $58.12 Monday following the announcement that two drugs -- the experimental VX-809 and currently marketed Kalydeco -- significantly improved lung function in patients with the most common genetic mutation causing cystic fibrosis. ...

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As Hostile Takeover Bids Recede, Investors Bet on Earnings

Mon, 07 May 2012 13:24:32 EDT

NEW YORK (TheStreet) -- Just a few months ago, hostile bids for Georgia Gulf , Vulcan Materials and Illumina seemed to be a savior for faltering shares. Takeovers now seem less likely to work, but investor reaction to stalled premium share bids has been muted.

For many C-suites looking at the prospect of a European meltdown, the U.S. "fiscal cliff" caused by a divided Congress, and a still lukewarm economic recovery, it's been a difficult nine months, but few companies had it harder than those that became the target of activist funds and hostile corporate bidders as their shares tumbled.

Now analyst forecasts and the investor reaction signal that as those bids recede, the prospect of earnings recoveries in coming years may outweigh the share jolt of an immediate deal. ...

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Top 5 Small-Cap Stocks to Consider Buying

Mon, 07 May 2012 11:31:44 EDT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Sterman

NEW YORK (StreetAuthority) -- It's crucial to avoid the trap of focusing on the same types of investments for your portfolio. ...

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Bristol-Myers Missing Hep C Data Raises Red Flags, May Boost Gilead, Idenix

Mon, 07 May 2012 07:00:00 EDT

NEW YORK (TheStreet) -- Since my return from the European Association for the Study of the Liver (EASL) conference two weeks ago, I have been unable to get over the strange behavior of executives at Bristol-Myers Squibb. As I discussed in my EASL wrap-up, investors should view with suspicion Bristol-Myers' complaints about Gilead Sciences' refusing to collaborate on a late-stage study of the hepatitis C drugs GS-7977 and daclatasvir partnership. Then there's Bristol-Myers' odd and prolonged silence about INX-189 -- the nucleoside polymerase inhibitor, or "nuc," acquired in the $2.5 billion Inhibitex deal.

I suspect something is wrong with Bristol-Myers' INX-189, which has since been renamed by the company as BMS-094. The red flags are popping up everywhere. If I'm right about Bristol-Myers being in trouble, Gilead's lead in the race to develop all-oral therapies for hepatitis C will expand and Idenix Pharmaceuticals' hepatitis C drugs become more attractive.

Let's examine the details: ...

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