Buy out to PFIZER. Sweet...

ENCY halted. Whats up?

http://www.nasdaqtrader.com/Trader.aspx?id=TradeHalts

I am waiting to see if it matches the 52 week low.

February 19, 2008

�� Upgrading ENCY to BUY
We recently attended the 4th World Symposium on Pulmonary
Hypertension where we were, admittedly, surprised by the seeming
positivity of European physician sentiment on Thelin. As a result, we are
upgrading ENCY’s shares to BUY and instituting a price target of $3.
�� Positive Feedback on EU Sales Force
By and large, physicians viewed Thelin and Tracleer as interchangeable –
with some slight edge going to Thelin when patients are receiving
concomitant PDE-5 therapy (recall the symbiotic relationship between
Thelin and sildenafil). While Tracleer sales certainly seem “sticky,” in our
view, the increased usage of Thelin coupled with an impressively strong
and well regarded European sales force (reminiscent of TKT’s vaunted 5S
group), may well result in Encysive finding the wanting gaze of lovelorn
third party (belated Valentine’s Day wishes), particularly a company
lacking a strong European infrastructure in the PAH space itself.
�� A Spot for Thelin in the US
Moreover, while US physician sentiment remains split, and the sour taste
of the FDA debacle has yet to dissipate, it is important to note that the
widespread view (ours included) is if one properly executed trial is run,
Thelin will eventually garner US approval. Moreover, if it is priced at a
discount to the other ETRAs, there is, in fact, a spot for it on the US
market. Even if it is not, there are sufficient new patient diagnoses, and
the ETRAs are so difficult to differentiate, that physicians will have
“favorites,” and clever marketing by whoever owns Thelin at the time can
result in the drug finding its niche.
�� Risks and Valuation
Encysive’s current Enterprise Value (using fully diluted shares including
converts) is approximately $84MM, fully supported, we believe, by Thelin’s
current European sales trajectory alone. If one assumes $100MM in sales
are achievable in 4 years time, and applies a 4x multiple, discounting back
at 20% per annum, Thelin sales are currently worth $192MM. This
excludes the value of the company’s European infrastructure as well as
the fact that Encysive is, in our opinion, only one successful trial away from
garnering Thelin approval in the US. When taken in its entirely, a take out
at 1.5x EV, or $1.30, seems entirely justifiable. We believe the Enterprise
Value plus the inherent value of the European sales force therefore yields
our price target of $3. Risks include continued delays in Thelin’s approval
process. Refer to the company’s SEC filings for greater detail of risks.


Contact
Andrew S. Fein
(212) 389-8045
afein@collinsstewartLLC.com

Logical post from another board:

The next earnings report out will be for Q4 2007. Projected Thelin sales are less than $5 million.

There is much more potential for a higher level of operational expenses, as the sales force is ramped up, than a positive surprise to the bottom line. I am bullish on the stock, and think the long-term sales picture for Thelin is available for an exceptional value right now (buy the stock!), but I would not predict any positive earnings report from current sales.

I will look carefully at the operational expenses in the next report. I expect the sales force expenses to rise. I hope the R&D is significantly lower, as well as administartive costs. There could still be some charges, against employee severances.

It is a difficult time for ENCY. They can make it as a stand alone pharmaceutical company, but the next year will be so lean that it will not support the R&D budget that they have gotten accustomed to. But they have only 2 choices: extreme belt-tightening and organic growth of Thelin revenues, or merger/acquisition. I would think the poster who suggested dilution, is sugggesting something impossible. ENCY is already a sub-$1 stock, low market cap, NASDAQ delisting candidate. Possibly some combination of dilution/reverse split, MIGHT allow a temporary cash flow that wouild be welcome, but it more likely would lead to delisting and failure.

I fully expect to check Yahoo one morning and see a white knight takeover proposal. This company does not want to cut the R&D (and they do have several promising drug candidates in advanced studies). They have brought in Morgan Stanley, as a selling agent, and they have pursued the Thelin ramp-up with a vengeance. But they are unlikely to surprise with earnings upside, as they are most likely lagging in the expense cutting (waiting a little longer, hoping on a white knight), and spending on the sales roll-out of Thelin.

Absolute bottom on this stock is mid 60's.

IMHO, low risk, high reward at these prices.

I am sure we shall see retrace Monday.

Aparently, after doing some research, not getting approved for re-embursement is not that big of a deal in Canada:

The agency recommends not listing for alot of drugs including Lyrica [Pfizer - great drug here in the US and EU], Nexavar [Bayer - renal cell carcinoma], etc. Canada Public reimbursement is less concerned about patients and more about costs...they go with cheap when alternatives [even inferior ones] are available which is why private health care [which does cover Thelin] is catching on like fire.

http://cadth.ca/index.php/en/cdr/search

Hoop

Thelin already on Quebec's List of Reimbursed Drugs

https://www.prod.ramq.gouv.qc.ca/DPI/PO/Commun/PDF/Liste_Med/Liste_Med/liste_med_cor1_2008_02_01_en.pdf

page 395 at the bottom

https://www.prod.ramq.gouv.qc.ca/DPI/PO/Commun/PDF/Liste_Med/Liste_Med/liste_med_cor1_2008_02_01_en.pdf

Look's like Quebec put Thelin on their list already

Quebec's population in about 7.5 million out of 32 million Canada population. Other critical province is Ontario with 12.5 million.

Another set back. Management sucks...

Link to CEDAC Recommendation - recommended to not list

http://cadth.ca/media/cdr/complete/cdr_complete_Thelin_January-30-2008.pdf

I have decided I am in for the long hall. Waiting for the partnership/buyout. Market has them priced as if they are going to go broke in my opinion. They are located here in Houston and I went by their headquarters and lab (could not get all the way in) and they are not packing their belongings. Thats good enough for me. I just wish Morgan Stanley would find some suiters...

Hoop

Another EU knocked out...

Encysive Pharmaceuticals Launches THELIN (Sitaxentan Sodium) In Sweden

Sitting on shares bought at .73 for a while now. Waiting for buyout/partnership to launch...

Hoop

In at 1.16. Seems to be a small float here...

Hoop

I picked up more earlier this week. Im at a avg buy 1.67. Bottomed out, imo...

From another board:

1) FDA Cardio-Renal head Norman Stockbridge refused to sign the Letairis approval letter and his Divisional Memo shold be xeroxed and given to all PAH doctors and patients, with the following memo points highlighted:

A) The FDA was more lenient in treating 6-minute walk subject withdrawals with Letairis, but unfairly penalized Thelin.

B) Thelin data was unbelievably used in support of equivocal Letairis 6MWT data, quote "One can take comfort from replication of results from other endothelian receptor antagonists." Dr Stockbridge used the plural form, and there are only two other endothelian receptor antagonists reviewed by the FDA: Tracleer and you guessed it, THELIN!
Encysive does the work and Gilead gets the credit.

2) Encysive was once one of the most praised biotechs. It's failure to get FDA approval burned many(UBS, Motley Fool, Standard & Poors-4 star rating, etc.). They are now punishing the stock price.

3) Partnership launch in Spain caused the stock to slip-why?
UTHR, maker of PAH rival Remodulin, almost exclusively uses an outside salesforce and their stock is in the 60's.
Bruce Given wanted to use the Actelion model whereby all salespeople are inhouse. Remember, Actelion's Tracleer got to market in 2002, and had the only PAH pill until Letairis was approved.

I was surprised when Spain launched before France and Italy, but Cole was right in wanting immediate sales, rather than building out a Spanish salesforce(any sales managers on this board will confirm how expensive this is).

3) Analysts are ignoring how the reimbursement process in Europe is different from the US. Case in point: when Thelin launched in UK in November 2006, I thought it immediately covered the whole country. Wrong. Then Scottish Medicines Authority had to review and recommend that Thelin be added to the formulary, April 2007. End of story? Not quite. Now, other Scottish sub-units like the Lothian formulary committee reviews the Scottish Medicines Authority recommendation! Cole said in the 2d qtr CC that there were approx. 150 PAH centers in UK that independently review Thelin before adding to their respective formularies. Whew!

From another board:

Factoring in the debt, and fully diluting the new financing (including the unissued warrants), the stock is selling for 4X sales. That's historical sales, not forward. And it assumes there's $1.75 per share of debt.

That's a valuation that assumes Thelin sales aren't going to grow, and that the pipeline is worth nothing.

Another way to state it is that the stock is valued as if it's likely to go bankrupt, and it retains a small value (under $1.50) as a long-term, out-of-the-money call. It's priced for disaster.

I don't care what the stock price is, the value of the company far exceeds the price.

The debt is not as big of a deal as people think. Strip it out and value company. Then deduct it from the buyout price. If the stock is worth $10.00 w/o debt, subtract $1.75, and the buyout price becomes $8.25.

If Thelin sales are a mere $250 million annually and the price/sales ratio is only 2, the stock is worth over $3 per share even after you factor in the debt and fully dilute the shares. If Thelin takes off in ROW, it's very easy to get to a double digit stock price; again, that includes the debt calculation and fully dilutes the shares.

Is the stock price being manipulated? I don't know. I suspect that some people who do simple math know full well that $15 per share is a more reasonable stock price than $1.50, and they're doing whatever they can to keep the price low while they build their stake. No, I'm not predicting $15 per share, but the stock is not going to stay at $1.50 either.

I stated it before and I'll repeat it: the recent $1.95 per share private financing was a bargain price. Lord only knows why the stock is at $1.50 per share - manipulation, stupidity, panic selling, short selling, or all of the above? I could see us popping up over $2 per share with no news whatsoever. Even $3 is a gift price.

The bulls posting here can't be the only people who have figured this out. There have to be some bigger fish who are playing this. And it is in their interest to keep quiet and to keep the price low until they are fully positioned.

I assume the mgt. is negotiating on a buyout with the idea to get a price per share that reflects our long-term value. I expect a good buyout offer. If not, I suggest mgt. take the time to build Thelin sales and reduce the debt until the share price reflects the value here.

Thelin European Ad and Paper
Quite a difference from the FDA position:

http://www.touchbriefings.com/pdf/2297/Kabunga.pdf

Thelin European Ad and Paper
Quite a difference from the FDA position:

http://www.touchbriefings.com/pdf/2297/Kabunga.pdf

Thelin European Ad and Paper
Quite a difference from the FDA position:

http://www.touchbriefings.com/pdf/2297/Kabunga.pdf

Also picked up some more NUVO...

Locked and loaded...

Hoop

Loaded up a couple of weeks ago at $1.71. Waiting for anouncmenhts for:

Buyout
Earnings
Results of FDA dispute.

One of the 3 go good, combined with this low price, and this will fly...

Anyone have any predictions on ENCY's financial report on Monday?

Dropping like lead weight...

I have no idea. I wish I was back in it though.

ENCY, will be bought out...

Do your DD...

Hoop

Just wondering if anyone has ENCY on their radar?

Hoop

Encysive Pharmaceuticals To Review Options To Boost Hldr Value

DOW JONES NEWSWIRES Encysive Pharmaceuticals Inc. (ENCY) said Tuesday it hired Morgan Stanley (MS) to evaluate its strategic alternatives to maximize stockholder value. The Houston biopharmaceutical company said it doesn't expect to publicly disclose further information about the status of the review until a definitive transaction is entered into or the process is completed.

I smell buyout...

Hoop

Encysive Pharmaceuticals To Review Options To Boost Hldr Value

DOW JONES NEWSWIRES Encysive Pharmaceuticals Inc. (ENCY) said Tuesday it hired Morgan Stanley (MS) to evaluate its strategic alternatives to maximize stockholder value. The Houston biopharmaceutical company said it doesn't expect to publicly disclose further information about the status of the review until a definitive transaction is entered into or the process is completed.

I smell buyout...

Hoop

Encysive Pharmaceuticals Provides Update for Thelin (Sitaxsentan Sodium)

HOUSTON, July 13, 2007 (PRIME NEWSWIRE) -- Encysive Pharmaceuticals Inc. (Nasdaq:ENCY) today announced that the Company and officials from the U.S. Food and Drug Administration (FDA) held a formal Class A preliminary dispute resolution meeting regarding the June 15th approvable letter and the status of our New Drug Application (NDA) for Thelin(tm) (sitaxsentan sodium). Several members of Encysive's internal and external regulatory team attended the meeting with the FDA. In addition, Robyn J. Barst, M.D., Professor of Pediatrics at Columbia University College of Physicians and Surgeons, and Director, New York Presbyterian Hospital Pulmonary Hypertension Center and a principal investigator in the STRIDE-2 trial, attended the meeting.
The Company originally submitted an NDA for Thelin to treat pulmonary arterial hypertension (PAH) in February 2005. In the June 15th approvable letter, the FDA concluded that Encysive's clinical development program for Thelin did not demonstrate significant evidence of efficacy needed for approval.
This meeting complies with the FDA's guidance on dispute resolution requiring that a sponsor meet with the division reviewing its NDA prior to requesting formal dispute resolution. The Company expects to file a request for formal dispute resolution with the FDA in the near term.

This is looking very stongly as if the CFO was pushed out before a buy out takes place Surf, IMO...

Interesting verbage in 8K

C. Change in Control of the Company . If, during the Retention Period, the Company is acquired and the Employee’s employment with the Company is terminated other than for Cause, Employee will receive his or her current annual base salary through the date of termination, the Initial Retention Bonus or any Extra Retention Bonus, as applicable, accrued and unpaid vacation and any severance payments to which Employee is eligible, as determined by the Company, to be paid in a cash lump sum payment on the last day worked by the Employee. In addition, if the Employee and the Company have entered into an Employment Agreement, the Employee shall be entitled to all rights afforded to the Employee under such Employment Agreement.

http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001299933%2D07%2D004088%2Etxt&FilePath...

Company may be in the process of buyout...

Hoop

ENCY enters retention pacts with 65 employees

From the 8K:

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 2, 2007, Encysive Pharmaceuticals Inc. (the "Company" or "Encysive") entered into retention agreements with the approximately 65 members of its U.S. workforce who will remain with the Company following the restructuring, including its named executive officers. The costs related to these retention bonuses were included in the estimated restructuring costs for 2007 of approximately $15 million previously disclosed by the Company.

These agreements provide for the payment of retention bonuses to the selected employees that remain employed with by the Company for the applicable retention periods. Subject to certain conditions, including the continued employment of the selected employees by the Company through December 31, 2007 (the "Initial Retention Period"), an initial retention bonus, which will be equal to six months of the employee’s annual base salary, will be payable to the selected employees in two equal installments on each of September 30, 2007 and December 31, 2007. Following the Initial Retention Period, unless the Company provides the selected employees with written notice at least 30 days prior to the end of the Initial Retention Period or any Extension Period (as defined below), the agreements will automatically renew for additional successive two-month periods (each an "Extension Period"). Subject to certain conditions, including continued employment of the selected employees by the Company through the end of each Extension Period, an extra retention bonus, which will be equal to two months of the employee’s annual base salary, will be payable to the selected employees on the next business day immediately following the last day of the each Extension Period. The foregoing description of the retention agreements is qualified in its entirety by reference to the form of Retention Agreement for selected employees, including the named executive officers, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

On July 9, 2007, the Company announced the resignation of Gordon H. Busenbark, the Company’s Chief Financial Officer, effective July 13, 2007. The Company expects to announce its plans regarding the CFO position over the next several weeks.

As a result of Mr. Busenbark’s departure, Richard A. Goeggel, age 55, the Company’s Treasurer will become the Company’s principal accounting officer effective upon Mr. Busenbark’s termination. Mr. Goeggel joined the Company in 2001 as Controller and was appointed the Corporate Treasurer in 2006. In March 2007, Mr. Goeggel accepted the additional duties as the Company’s European Finance Director. Mr. Goeggel holds an A.B. in Economics as well as an M.B.A. in Accounting and Finance from Cornell University. He is also a certified public accountant

What do you think Surf? Might be a buyout soon? Or is ENCY dead in the water?

Hoop

Hopefully this will free up some cash until next year without management needing to delute...

The Westaim Corporation sells Fort Saskatchewan real estate holdings for $13.5M 5/8/2007
Download this Press Release


CALGARY, May 8 /PRNewswire-FirstCall/ - The Westaim Corporation announced today it has sold its real estate holdings in Fort Saskatchewan, Alberta, for net proceeds of $13.5 million. The company will record a book gain of approximately $7.5 million on the transaction.

"As part of our review of the company's business strategy, we determined that our Fort Saskatchewan real estate assets are no longer key to our future plans," said Barry M. Heck, President & CEO, The Westaim Corporation. "We believe it is in the best interest of Westaim's shareholders to realize the value of this non-core asset to strengthen our balance sheet. The facility is partially occupied by NUCRYST Pharmaceuticals which will continue as a tenant under existing long-term leases."

On April 23, 2007, Westaim announced it was conducting a strategic review of its business strategy to determine the optimal use of existing resources and assets to maximize value for shareholders. At March 31, 2007, Westaim had $51.7 million in consolidated cash and short-term investments, which includes $21.2 million of NUCRYST Pharmaceuticals Corp. cash and short-term investments. The gain on the sale will be recorded in the second quarter of 2007.

Hoop

Back in at 4.20

Got back in at 4.45. Going to see if anything comes out of this CC this weekend. Rumors are abundant here...

Well, there goes that. Hoop is not allowed to play in the games because Ameritrade wants me to pay almost twice the ask...