Endo, Biogen lead drug stocks north
BOSTON (MarketWatch) — Endo Pharmaceuticals Holdings Inc. and Biogen Idec Inc. helped lead drug stocks north Monday, as the broader market also moved into positive territory.
Shares of Endo (ENDP 41.34, +0.49, +1.20%) jumped 5% to $42.99 after the company
announced it was buying medical device maker American Medical Systems Holdings Inc. (AMMD 29.48, +7.15, +32.02%) for $30 a share in cash, or about $2.9 billion. Endo will
also assume $312 million in debt.
Endo said the deal will help it diversify into the medical devices and treatment services markets. American Medical specializes in urology and gynecology products. Read more on Endo bid.
American Medical shares soared 32% to $29.50. The stock closed at $22.33 on Friday.
Biogen Idec (BIIB 78.37, +5.08, +6.93%)
shares were up almost 6% at $77.35.
The biotech group released positive Phase III clinical data for its multiple sclerosis drug candidate BG-12 that showed it helped lower the rate of relapse in certain MS patients. Biogen is expected to release data from a second Phase III trial for the drug during the second half of the year.
Biogen already markets two of the most popular MS drugs, Avonex and Tysabri, which are both injected medications. BG-12 has been seen as an improvement on those two drugs in part because it is taken orally.
Biogen’s good news dinged shares of Israel’s Teva Pharmaceutical Industries (TEVA 49.09, -1.37, -2.72%) , which is also working on an oral MS drug. Teva markets
one of the leading MS drugs, Copaxone.
Teva shares were down 3% at $49.
Switzerland’s Novartis AG (NVS 55.24, -0.06, -0.11%) already markets an oral MS drug,
called Gilenya, which also had study results released Monday.
Shares of Idenix Pharmaceuticals (IDIX 3.23, +0.33, +11.21%) were on the rebound, up
9% after analysts at Bank of America-Merrill Lynch upgraded the stock to buy from neutral. Read more on Idenix stock offering.
Idenix shares slid 10% last Friday after the company priced a stock offering substantially below the previous day’s close.
The drug sector’s two leading indexes were also higher. The NYSE Arca Pharmaceutical Index (DRG 315.08, +1.39, +0.44%) climbed 0.5% to 315 and the NYSE Arca
Biotechnology Index (BTK 1,388, +4.38, +0.32%) rose 0.4% to 1,389.
Sun Pharma, Merck’s India Unit Form Joint Venture
India’s Sun Pharmaceutical Industries Ltd. and U.S.-based Merck & Co. said Monday they have formed a joint venture focused on emerging markets, the latest in a series of deals through which Western drug makers are looking at opportunities outside their traditional markets.
“This joint venture will focus on developing, manufacturing and commercializing innovative branded generic medicines,” Sun Pharma Chairman Dilip Shanghvi said at a news conference.
Alembic’s real estate arm gets listed
The real estate arm of city-based Alembic Limited has got listed while its pharmaceutical arm is expected to get listed after the third week of May. Brokerage firm – Angel Broking – said this on Monday.
It was in June last year that Alembic Limited, country’s oldest pharmaceutical company, had announced demerger of its core pharmaceutical business into a 100 per cent subsidiary company called Alembic Pharma Limited (APL).
Under the scheme, pharma business comprising the domestic formulation, international generic and active pharmaceuticals ingredients (API) businesses along with the manufacturing facility at Baddi, Panelav and Karakhadi will be transferred to APL.
Alembic Limited will retain its Vadodara manufacturing facility including the loss making Penicillin G business along with the power infrastructure used for internal consumption and 115 acres of land assets at Vadodara including 45 acres currently used for the Pen-G facility.
Under the arrangement, shareholders of Alembic would receive one equity share of APL in the ratio of 1:1.
The brokerage firm on a conservative basis has valued the real estate arm at Rs 33 per share while APL is valued at Rs 71 per share.
Company officials however declined to comment on this valuation.
“The demerger process is complete and the shares are trading ex-scheme from Monday,” Alembic’s CFO R K Baheti told TOI, adding that the company will now make allotments to all the shareholders of Alembic Limited]
GW Pharma signs Sativex deal with Novartis
Cannabis-based medicines group GW Pharmaceuticals (GW) could receive over $30m under a new licence agreement with pharmaceutical giant Novartis Pharma to commercialise GW’s spasticity treatment product.
Novartis will commercialise ‘Sativex’ in Australia, New Zealand, Asia (excluding Japan, China and Hong Kong), the Middle East (excluding Israel/Palestine) and Africa.
GW will collect an upfront payment of $5m and could receive additional payments totalling $28.75m if it hits certain approval and commercial milestones. It will also receive royalties on sales of the product.
“As one of the world’s leading pharmaceutical companies with a strategic focus in both MS and oncology, Novartis represents an excellent commercial partner for Sativex in these important and growing international markets,” said GW’s managing director Justin Gover.
After factoring in the payments to its forecasts, Peel Hunt has upped its target price for the group from 160p to 178p, and kept its ‘buy’ rating, seeing an “excellent buying opportunity given the recent share price weakness.”