Johnson & Johnson (JNJ) is shelling out $1.75 billion to acquire Alios Biopharma, a private developer of therapeutics for viral diseases. Alios’ lead drug asset is AL-8176, an orally administered antiviral currently in phase 2 trials for respiratory syncytial virus (RSV). The smaller company’s pipeline also includes early-stage treatments for hepatitis C, like the nucleotide analog AL-335. “Nucs” are hot ticket items: Idenix (IDIX) was acquired by Merck (MRK) for $3.9 billion in June, primarily for the company’s mid-stage program. Since then, fellow nuc developer Achillion Pharmaceuticals (ACHN) has rallied nearly 300% as investors realized the scarcity value in novel nucleotides.
On Friday we published, in collaboration with Alpha Biopharma Advisers, Dr. Paul De Santis’ latest ongoing coverage of the hepatits C landscape: a close look at Achillion Pharma. More importantly, we’ve outlined in detail Dr. De Santis’ strategy for the ACHN acquisition thesis, a trade that captures tremendous upside with minimal initial capital outlay.
Read “Achillion Pharmaceuticals: A Low-Cost, High-Reward Trade on this Buyout Candidate”
After the close on Tuesday the United States’ Centers for Disease Control and Prevention confirmed the first domestic infection of Ebola Zaire, in a patient currently held in isolation at a hospital in Texas.
With that, the Ebola trade continues. Tekmira Pharmaceuticals (TKMR), Hemispherx Biopharma (HEB), and Sarepta Therapeutics (SRPT) all continued to get attention this week for early-stage Ebola therapeutics. Even Lakeland Industries (LAKE), a maker of hazmat suits, ended the week 10% higher. There’s tremendous hype around Ebola stocks, many buoyed by bandwagon press releases touting new and promising approaches: worst offenders include Nanoviricides (NNVC), Inovio (INO), and even Lakeland above. Warranted or not, our suspicion is that the demand for Ebola stocks isn’t going away soon. On Wednesday, we offered further background on the first U.S. case and explained our view on why Tekmira is a leading contender for a government stockpiling contract. Read the full article and read more of PropThink’s prior Tekmira coverage.
Also exclusive to PropThink, we outlined this week another unique way to be involved in Alcobra (ADHD), a mid-stage developer of ADHD treatments. The company has an incredibly important data event approaching: a phase 3 readout for metadoxine in adult ADHD. That event should hit NEXT WEEK. Here, we’ve outlined how traders can potentially profit from a phase three fail or success. We believe it’s a almost directionless – and you get paid to put it on. Keep reading “An Alternative Alcobra Trade.”
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Salix Pharmaceuticals (SLXP) this week announced the end of a $2.7 billion merger agreement with Cosmo Pharmaceuticals, citing tougher U.S rules for overseas inversions. Salix will make a $25 million payment to Cosmos and the two parties will separate amicably. A statement issued by Carolyn Logan, President and CEO of Salix noted that, “the changed political environment has created more uncertainty regarding the potential benefits we expected to achieve.’’ With Salix on the market again and a new takeout plausible, the courting with potential acquirers has resumed. Two main contesters, Allergan (AGN) and Actavis (ACT), have reportedly been in talks to buy Salix, though the conversation with Actavis seems to be heating up in the past few weeks as the Allergan deal fades. It’s one messy situation, with Valeant (VRX) still after Allergan and Pfizer (PFE) reportedly after Actavis as of this September. Read more.
One or more of PropThink’s contributors are long TKMR, ACHN, SRPT, PFE, or ACHN.
