PropThink’s Healthcare Week-in-Review

  • The highlight of our week was Allergan’s ~$1B buyout of MAP Pharmaceuticals, a company that we recommended in early January. The acquisition came at a 60% premium to MAPP’s closing price, but all-in-all for AGN, the deal was a bargain if Levadex lives up to its potential.
  • Mr. Napodano sat down with management from Zalicus to discuss the company’s lead candidate Z160, an N-type calcium channel blocker being developed as a treatment for chronic pain. Partners are already knocking on the door, and sales are estimated at $500-750M on quality data from current trials.
  • Cadence announced guidance for 2013 Ofirmev sales, and estimations for 4Q12. The company has been demonstrating consistent sales growth of its lead product and expects the ramp to continue. CADX is up 26% since we began following it.
  • Baxter International’s earnings call revealed some interesting news for Halozyme. The two companies’ collaborative product, HyQvia, should go before the EMA in the first half of 2013. That could mean surprise upside for the stock as most analysts had taken it out of their models. PropThink has been on top of Halozyme since the stock took a dive in early August. Holding HALO since then has returned 100%.
  • Keryx’s Phase III data delay has been frustrating, but management indicated that it’s little more than a timing miscalculation. Early this month, we suggested options for a risk-mitigated strategy to play the binary event, but we remain bullish overall on the Zerenex data release. Although we’ve been following the story since perifosine’s failure in mid-2012, our readers could have taken advantage of price action just this week for a 35% gain.
  • Affymax remains flat from where PropThink took interest, but lead product Omontys holds considerable value for its convenience, cost-savings, and comparable efficacy to Epogen (affirmed by two NEJM articles this week). It doesn’t take much of the ESA market to make this a lucrative product.
  • UNIS could be in for a squeeze higher as the company delivers on a number of commercialization/development partnerships in 2013. The company has an interesting capital structure, and while inconspicuous to the casual observer, its low float could facilitate a short squeeze.
  • SGMO has been on a robust run in January. PropThink wrote on the drug developer in the middle of the month, and the stock has since returned 20%.
  • PropThink noted Telik’s astronomical rise and suggested that the gains wouldn’t last in the short-term, and that the company needs cash in the net few months. Shares have lost 40%.