Yet another choppy week for investors, and we’re going into another weekend in which decisions overseas will impact U.S. markets first thing on Monday. Greece submitted its latest package of reforms to creditors late in the week, which will be reviewed over the weekend as the deadline for a bailout deal looms.
Optimism about a beneficial deal getting done spurred a rally on Friday, and even Asian markets participated, with the Shanghai Composite index ending the week up 5% for the first time in a month.
Lets review the numerous factors weighing on investors. The possibility of a Grexit, China’s lagging stock market (and the government’s attempts to prop it up), Puerto Rico’s debt, and now – earnings season, which kicks off next week. Most of the impactful biopharma reports don’t begin until the week after, but keep an eye on the early reports as the dollar was at its highest when many companies were issuing guidance just a few months back. That may actually create a tailwind for names with meaningful revenues overseas.
Specialty pharma M&A – or attempted M&A – grabbed headlines this Tuesday. Horizon Pharma (HZNP) made pubic a bid to buy Depomed (DEPO) for $3 billion after being rebuffed privately by the smaller company. Horizon offered $29.25 in stock to acquire Depomed, the exact same offer that Horizon’s board refused just last month. Our view – Depomed might get bought, but not at that price.
Cempra (CEMP) said this week that enrollment in the phase III SOLITAIRE-IV trial, testing an IV-to-oral regimen of the antibiotic solithromycin against CABP, was complete, and that data would be out in the fourth quarter. Handicapping those timelines, we outlined for PropThink readers this week when WE think the data are likely – and we narrowed it down to just a few weeks. That’s critical for anyone putting together an options strategy for the binary event.
We’ve followed Sage Therapeutics (SAGE) and Marinus Pharmaceuticals (MRNS) all year because of their similar drugs for epilepsy, both dubbed neurosteroids. Sage has been richly rewarded for SAGE-547’s profound impact in patients with a severe, debilitating form of epilepsy called SLE; the stock is up almost 3-fold YTD. Marinus has pushed back data events repeatedly this year, and up until recently it wasn’t clear what the small company had going for it in 2015. On Thursday, we explained what’s going on and when, and briefly touched on PCDH19, a genetically defined female epilepsy in which Marinus is currently testing ganaxolone.
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