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"There were scavengers willing to take Ariad for $10-$11, and now they are gone."
Right BR! And I'd bet that NVS was one of them. Now that they see they can't steal the company they may want to enter Denner's war games (bidding war, that is). As I have posted before, Ariad makes a lot of business sense for NVS.
HB's two best strategic moves:
1. Merck partnership
2. Board seat for activist hedge-fund manager Denner
HB spoke in a very matter-of-fact manner about the approaching Japanese partnership.
My guess is that all the terms of this partnership are already worked out and its completion is just contingent on further refinement of some on-going issue.... labeling? dosing? etc.
The new financing would enable Ariad to take less up-front from the Japanese partnership, but to enjoy a better profit division.
Ocean of cash may be on its way.
If you followed the PFE failed attempt to buy AstraZeneca you realize that PFE's primary motivation was to relocate to England and use its accumulated European cash. Repatriation of that cash is impractical because of a 35% US tax.
Now Rand Paul and his soulmate, Harry Reid, are hammering out a three year tax holiday that would enable companies like PFE to repatriate the money for just a 10% tax. US companies have $2.1 trillion idle funds overseas.
http://www.cnbc.com/id/101747414
So PFE and other big US pharmas may soon be wallowing in cash that could stimulate a buyout mania.... a sweet-spot for companies like Ariad.
Does NVS need ARIA?
Here's a list of NVS 2013 income by drugs..
http://www.novartis.com/investors/financial-results/product-sales.shtml
Note that Glivec is their largest seller, $4.7B (about 15% of total). Their second largest, Diovan at $3.5B was down 20% last year. Gilenya at $1.9B is now being challenged by RCPT. See,
http://www.fool.com/investing/general/2014/06/10/up-37-can-receptos-compete-with-novartis.aspx
I'm sure they have other challenges as well.
They could buy Ariad for perhaps 20% of one year's income. They could capture Iclusig (preserving their leukemia franchise and add all its additional uses); get a foot in lung cancer with 113 as well as the mystery molecule; plus absorb one of the great oncology labs.
Duh! If NVS is not talking to Berger, Denner et al, their shareholders should be screaming. Imagine how they would look if a BP competitor (that could easily finance multiple trials) swooped in.
Just wondering. If a director of Ariad, who also runs an investment fund, uses inside information to have his fund buy shares in Ariad... say, just prior to a sale or partnership, is that legal?
Denner of course understands that the IDIX windfall for his investment group was a result of a bidding war (in which I assume he played a role).
"Biotech this morning is doing well due to Merck's (NYSE:MRK) bid for Idenix Pharmaceuticals (NASDAQ:IDIX) for a hefty premium in a competitive bidding war against (apparently) Johnson & Johnson (NYSE:JNJ) and AbbVie (NYSE:ABBV). Idenix closed at $7.23 on Friday and was bought for $24."
http://www.minyanville.com/special-features/from-the-buzz-banter/articles/Negative-Sentiment-Nearly-Unanimous-Among/6/9/2014/id/55241
A 350% premium for a stock with no product on the market, no revenues and really bad reviews. For example, just look at this very critical argument that encouraged the shorts..
http://www.fool.com/investing/general/2014/05/30/why-wall-street-hates-idenix-pharmaceuticals-inc.aspx
My opinion -- this simply reflects the desperation of BP for pipeline. You know Denner is taking note as are the shareholders.
Agree with BR, we should see a bounce today.
This discussion about how to vote our shares is absurd.
There are 186 million shares outstanding. As a group we probably represent less than one-half of one percent. Even if we voted as a bloc the outcome would be unaffected.
It is good corporate citizenship to vote. But practically, corporate democracy is for the insiders and institutional holders.
That FDA action closing down Iclusig was irresponsible. The possible corrections (lower dose, possible patient screening, statins etc) could have been made without destroying Iclusig's reputation.
Now Ariad has to use its assets to defend the SE arguments instead of furthering trials that could be helping desperate patients. It cost Ariad probably two full years of drug development and the opportunity to fund them.
I hate to dwell on the thought that some sinister plot was behind all this, but it does stick in my craw.
That said, go HB, Denner, Blackrock !!
Pre-market -- Up 20%. modest volume. Its early.
http://www.nasdaq.com/symbol/aria/premarket
Ariad is doing a full-court press a week after ASCO.
finance.yahoo.com/news/ariad-present-upcoming-investor-conferences-113500873.html
I think this bodes well for their ASCO news.
"I do hope that Ariad is putting something together around ASCO"
Yes, I hate to admit that hoping is part of my investment strategy, but I'm hoping also. I like to hope big... how about a Japanese partner for Asia with enough up front to fund the waiting trials.
Agree about their value.
My comment is more directed at the forces that may be generating these pieces. Grassy knoll and all that.
Curious that we are getting a series of positive comments just before ASCO. Here's the latest..
http://finance.yahoo.com/news/why-earnings-streak-continue-ariad-105358800.html
Groundwork?
Pfizer is looking for cancer pipeline. Their bid for Astra continues to have huge problems.
I'm sure we don't need to remind Dr. Denner of their phone number. And don't forget the Pfizer rumor a few months ago; albeit from a ridiculously unreliable source.
The major attraction for PFE was the tax advantages of moving to England after the buyout. The feds are hip to this and making noises about neutralizing that tax move. While not comparable in size, Ariad does come with a substantial tax loss carry forward. Just sayin'.
2da -- My guess is they have identified the molecular characteristic that has caused the side effect problems and have selected it out of the next molecule.
Truthfully, I think all this pessimism on the board is a form of post traumatic stress syndrome.
The company still has most everything in play that it had before the collapse except that Iclusig is now understood to be started at a lower dose.
I'm as antsy as the next guy, but the reality is that the income stream will take additional time to reconstitute.
Medinol progress (apologies if this was already posted) --
http://investor.ariad.com/phoenix.zhtml?c=118422&p=irol-newsArticle&ID=1890517&highlight=
Up and active in pre-market. $7.55
http://www.nasdaq.com/symbol/aria/premarket
Fool runs a semi-positive article giving three reasons why Ariad could run up.
http://www.fool.com/investing/general/2014/04/29/3-ways-ariad-pharmaceuticals-could-mount-a-comebac.aspx
It is curious that all three reasons involve iclusig. No consideration give to 113, new molecule, possible partnership etc. etc. Amazing how shallow these financial web sites can be with their analysis.
M&A Fever.
http://finance.yahoo.com/blogs/breakout/m-a-mania-a-bullish-sign-for-stocks--baker-193403167.html
Hey, Drs. B and D, once the May news is out maybe it is time to strike?
So that would be about $350MM.
Actually my point is more that there are plenty of BPs out there that are flush with cash (and probably earning less than 5%) and ready to jump into this current buying spree. A seller's market for pipeline.
Will Mr. Denner compare this deal ($710MM upfront) with what may be possible for asian rights to iclusig?
----------
Celgene Acquires Late-Stage Product for Crohn’s Disease and Other Gastrointestinal Disorders
Celgene Acquires Late-Stage Product for Crohn’s Disease and Other Gastrointestinal Disorders
- GED-0301 is a First-in-Class, Oral Antisense Drug Targeting Smad7 mRNA
- Phase III Program for Crohn’s Disease Targeted to Begin by Year-End 2014
Celgene Corporation (NASDAQ:CELG) entered into a global license agreement with Nogra Pharma Limited, a private pharmaceutical company based in Dublin, Ireland, to develop and commercialize GED-0301, an oral antisense DNA oligonucleotide targeting Smad7 mRNA for the treatment of moderate-to-severe Crohn’s disease and other indications.
A double-blind, placebo-controlled, multicenter phase II trial of three doses of GED-0301 in 166 patients with active Crohn’s disease has been completed. The data have been submitted to a major medical journal and will be presented at an upcoming medical congress. Based upon these results, Celgene plans to initiate a phase III registration program by year-end 2014.
“GED-0301 is a potentially transformative therapy that demonstrated striking clinical activity in a phase II trial for Crohn’s disease,” said Scott Smith, Senior Vice President and Global Head of Inflammation and Immunology. “It strengthens our expanding pipeline of novel therapies intended to address significant unmet medical need in immune-mediated diseases.”
Under the terms of the license agreement, Nogra Pharma Limited will receive an upfront payment of $710 million, regulatory, development and net sales milestone payments and tiered royalties. Aggregate payments for regulatory and development milestones could potentially be $815 million for multiple indications. Starting from global annual net sales levels of $500 million, aggregate tiered sales milestones could total a maximum of $1,050 million if annual net sales reach $4,000 million.
The license agreement will become effective upon the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Pfizer sought AZN because "A deal with AstraZeneca would add early-stage drugs in a field of cancer treatments".
No deal with AZN, now GSK is gone. There are still a few pretty faces left at the oncology ball.
Wasn't PFE one of the early rumors?
Pfizer rumored to have offered $101 Billion for Astra Zeneca.
http://www.cnbc.com/id/101597019?__source=yahoo%257cfinance%257cheadline%257cheadline%257cstory&par=yahoo&doc=101597019%257cPfizer+considers+%24100B+bi
How foolish. They could have Ariad for half that amount.
A lot (almost all) biotech daily charts are shaped like a hammock today. Perhaps the worm has turned.
"Partnerships at this stage of the drugs just won't get us enough, IMO."
2da... you may be surprised. Mid-May just a month away. Should be news, the kind that keeps Denner around. Watch for Japanese pharma. Asians have much lower incidence of stroke and heart disease and Iclusig apps expanding. all, jmo of course.
A blood test to replace difficult biopsy.
Posted by Biomaven at SI... apologies if this was already noted here.
Stanford group develops a potential blood test for ALK/ROS/EGFR:
nature.com
What they are doing is pretty complex, but basically they use deep sequencing of circulating tumor DNA looking for known mutations using hybrid targeting. Potentially could be used as a screening test or to follow mutations under treatment.
Probably a few years out yet, but very important in the long run. Getting tumor material for a lung biopsy is sometimes quite hard and can have significant morbidity.
I doubt Denner pushed his way onto the Board in order to become a yes-man.
Thanks BR. "Commercial partnership in Japan" sounds good. I would guess that this possibility would not have been floated if discussions were not already underway.
Hope there is enough up-front cash to prevent further dilution.
Underlying all of Ariad's value is their talented lab. I'm certainly no insider but I assume Dr. Berger played and continues to play a key role in maintaining Ariad's scientific edge.
BIC drugs that prevent all known mutations do not appear by accident. I'll stick with Dr. B.
New Era from FDA?
---------------------------
CAMBRIDGE — The head of the US agency that approves medicines Friday called for more regulatory flexibility and “a new era of partnership” with the biopharmaceutical industry in bringing new treatments to patients.
“We see this model emerging where we don’t just wait for an application to come to us,” Food and Drug Administration commissioner Margaret Hamburg told more than 300 drugmaking executives at the annual meeting of the Massachusetts Biotechnology Council trade group. “We engage with you early and work with you throughout the development process.”
Hamburg said the partnership promised “swifter, more efficient product development and product review” after years of criticism from industry that the drug approval process was too long and cumbersome. FDA officials last year added a “breakthrough therapy” designation to its arsenal of programs meant to accelerate the review of drugs that address pressing unmet medical needs and improve the communications between drug companies and regulators.
Together, the programs can help three to five years off the research and development cycle and months off approval times for new drugs, she said.
“We are working hard to find ways to decrease the time between discovery, research, and approval,” Hamburg told her audience at the Royal Sonesta Hotel. “It matters to all of you, but it especially matters to patients.”
US Senator Elizabeth Warren, Democrat of Massachusetts, who introduced Hamburg, repeated a call she made at a Greater Boston Chamber of Commerce forum last fall to double the National Institutes of Health budget, which basic funds scientific and biomedical research at Massachusetts teaching hospitals. Many state biotechnology companies piggyback on that research to develop therapies to treat a range of diseases and chronic conditions.
http://betaboston.com/news/2014/04/04/fda-chief-calls-for-a-new-era-of-partnership-with-biotech-firms-at-conference/
BR - I agree that the market is reading this as a "not for sale" sign.
However, my guess is that there are a lot of short term and momentum players in ARIA these days. They read this pr and see no quick sale and out they go.
But, the BPs that may have an interest are perhaps thinking..
"maybe we need to make a better offer".
We are all getting older, including Harvey.
One of the tactics if you are selling something is to show the potential buyers that you are not interested in selling.
Rumors --
Think of Ariad as a free agent in the sports world. The athlete's agent builds a market by suggesting to the major players that their competition is interested. The next thing you know some man-child Neanderthal is getting $20MM/yr for six years.
The uncertainty is what makes the strategy work. Perhaps all this rumor is just Denner doing his thing.
If LDK378 can obtain the "breakthrough therapy" designation, would not 113 (which uniquely addresses brain mets) also be a candidate?
If 113 were to achieve this, what would the timetable be like?
This posting from SGMO board... that biotech is not overvalued is worth reading. And there is mention of ARIA as a significant value here.
http://www.investorvillage.com/smbd.asp?mb=1933&mn=63024&pt=msg&mid=13673768
Just my opinion... This is Denner's big play. He wants to establish his rep and has a very large percent of his fund invested.
He isn't here for a double. He is looking for 10x to 20x.
Two years ago there was buyout speculation regarding Ariad.
Two Japanese companies... Astellas and Takeda... were mentioned.
http://www.istockanalyst.com/finance/story/5672488/ariad-aria-could-be-potential-takeover-candidate-for-pharma-giants