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PropThink’s Biotech and Healthcare Recap

Happy Holidays from the team at PropThink!

  • Our report on Trius Therapeutics tackled the short thesis, repudiating the focal points of the bear argument. Shares are, in fact, flat since we first wrote on Trius in early November.
  • Orexigen will be, we believe, the best bet of the obesity treatments in 2013. The stock trades at a sharp disparity to its peers, and a number of events in the new year should drive value for shareholders.
  • Media sources said on Thursday that Roche may have finally inked a deal to purchase Illumina for $66 per share. Roche has a tendency to let news slip early, which could be telling. In October, we noted that Illumina could trade towards $60 based on ongoing buyout speculation.
  • Business prospects are looking good for Affymax following Omontys’ launch earlier this year. A sell-off on Wednesday was an overreaction to Omontys script data, presenting an entrance opportunity for long-term investors. Nevertheless, shares remained under pressure at the end of the week.
  • QCOR generated quality returns for investors who bought just after the sell-off in September. The company’s fundamentals and technicals suggest that QCOR isn’t done climbing.
  • Oncothyreon’s lead candidate Stimuvax proved a failure in a late-stage trial. The stock sold off sharply, but bounced back slightly in the same session, offering a quick trade opportunity.
  • CADX has climbed 14% since its Analyst Day, which highlighted growth trajectory for Ofirmev. A study published this week supports the use of non-opioid analgesics in post-operative settings, a benefit for drugs like Ofirmev.
  • Major changes at Geron, detrimental in the short-term, may have created a value opportunity based on Imetelstat’s potential. Restructuring lowered the company’s cost structure, and Geron, notably, has enough capital for two years of development.
  • An amendment to its previous distribution agreement will improve margins for Cornerstone Therapeutics. In addition, partner and majority shareholder Chiesi continues to grow its stake in the company, which may indicate an eventual purchase.
  • Halozyme Therapeutics and Pfizer entered a deal for the use of HALO’s Enhanze platform. It’s a big deal for HALO, and the stock gained 23% on Friday.
  • While shares of REGN are up more than 200% in 2012, Eylea sales should continue to grow as the company expands its label. Here’s the report.

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