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ARCA biopharma Announces US FDA Acceptance of Gencaro Companion Diagnostic Test IDE
Phase 2B/3 GENETIC-AF Trial on Track to Begin Patient Enrollment in Q1 2014
Gencaro Potentially the First Genetically-Targeted Cardiovascular Treatment
Business Wire ARCA biopharma, Inc.
7 minutes ago
WESTMINSTER, Colo.--(BUSINESS WIRE)--
ARCA biopharma, Inc. (ABIO), a biopharmaceutical company developing genetically-targeted therapies for cardiovascular diseases, today announced that Laboratory Corporation of America (LabCorp®) (LH) has informed ARCA that the U.S. Food and Drug Administration (FDA) has accepted LabCorp’s Investigational Device Exemption (IDE) application for the planned companion diagnostic test for GencaroTM (bucindolol hydrochloride), a pharmacologically unique beta-blocker and mild vasodilator being developed for atrial fibrillation (AF). The IDE allows the companion diagnostic test to be used in the planned GENETIC-AF clinical trial. ARCA’s Gencaro Investigational New Drug (IND) application for AF has been accepted by the U.S. Food and Drug Administration (FDA) and is active.
ARCA has identified common genetic variations that it believes predict individual patient response to Gencaro, giving it the potential to be the first genetically-targeted AF prevention treatment. LabCorp and ARCA have developed the companion diagnostic test for Gencaro to identify patient genotypes based on these genetic variations of the beta-1 cardiac receptor. LabCorp will provide the patient genetic testing for ARCA’s GENETIC-AF clinical trial of Gencaro, which is expected to begin patient enrollment in the first quarter of 2014.
GENETIC-AF Clinical Trial
GENETIC-AF is planned as a Phase 2B/3, multi-center, randomized, double-blind clinical trial comparing Gencaro to Toprol-XL for prevention of AF in patients with heart failure and reduced left ventricular ejection fraction (HFREF). ARCA plans to enroll only patients with the genetic variant of the beta-1 cardiac receptor which the Company believes responds most favorably to Gencaro. GENETIC-AF has an adaptive design, under which the Company plans to initiate it as a Phase 2B study in approximately 200 patients and then, depending on the results of an interim analysis by the trial Data Safety Monitoring Board (DSMB), expand the trial to a Phase 3 study by enrolling an estimated additional 420 patients. Medtronic, Inc. is collaborating with ARCA on the GENETIC-AF trial. The Company anticipates that patient enrollment in GENETIC-AF will begin in the first quarter of 2014.
AVEO Pharmaceuticals, Inc. (AVEO) was a big mover last session, as the company saw its shares rise by 8% on the day. This gain can be attributable to solid volume too with far more shares changing hands than in a normal session. This reverses the recent trend of the company as the stock is now down 17.8% in the past one-month time frame.
In the last 30 days, the company did not witness any estimate revision and the Zacks Consensus Estimate has remained static. However, yesterday’s price action is encouraging, so make sure to keep a close watch on this firm in the near future.
AVEO Pharmaceuticals currently has a Zacks Rank #4 (Sell) while its Earnings ESP is 0.00%.
However, some better-ranked stocks in the healthcare industry include Heska Corporation (HSKA), Forest Laboratories Inc. (FRX) and Jazz Pharmaceuticals plc (JAZZ), all with a Zacks Rank #1 (Strong Buy).
4:26 pm AVEO Pharma: Great Point Partners discloses 5.69% passive stake in 13G filing (AVEO)
9:01 am Rosetta Genomics collaborative study profiling micrornas published in Clinical & Translational Oncology; demonstrates microRNA Regulation of epithelial mesenchymal transition (ROSG) : Co announces that data from a collaborative study between Rosetta and a leading research team in the field of Cancer of Unknown Primary at the University of Ioannina, were published online in Clinical & Translational Oncology in an article titled, "Insights into the epithelial mesenchymal transition phenotype in cancer of unknown primary from a global microRNA profiling study."
The study examined the microRNA regulation of epithelial mesenchymal transition and the acquisition of migratory, mesenchymal-like properties of epithelial cells in CUP. In the study, the global expression profile of 982 microRNAs were evaluated by means of microarray technology in 68 CUP cases that were immunohistochemically characterized as EMT-positive or EMT-negative. According to the study's lead author, "The study results showed the EMT-suppressive miR-203 and miR-200 family were consistently but non-significantly down regulated in CUP samples with the EMT phenotype."
PRINCETON, NJ and REHOVOT, ISRAEL--(Marketwired - Dec 9, 2013) - Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and provider of microRNA-based molecular diagnostics, announced that the New York State Department of Health ("NYSDOH") has given the Company conditional approval for the Rosetta Kidney Cancer Test™ for testing on patient samples from the State. New York is the only U.S. state that requires an independent regulatory review process for laboratory-developed tests. With this approval, Rosetta Genomics can offer the Rosetta Kidney Cancer Test in all 50 U.S. states. In making the assay available pending final approval, the NYSDOH requires the Company to provide any additional information they request within 60 business days. The Kidney Cancer Test is the Company's proprietary microRNA-based assay that accurately classifies the four most common kidney tumors: clear cell renal cell carcinoma (RCC), papillary RCC, chromophobe RCC and the benign oncocytoma. It is one of four assays Rosetta is currently selling through its CLIA-lab in Philadelphia, Pennsylvania.
Kidney cancer is one of the ten most common cancers in both men and women, accounting for over 65,000 new cases and approximately 14,000 deaths in the U.S. in 2013.1
"The incidence of primary kidney tumors is rising, and differential diagnosis between various types of kidney tumors remains challenging at times," said E. Robert Wassman, MD, FAAP, FACMG, Rosetta Genomics' Chief Medical Officer. "One diagnostic challenge, often underestimated, is clearly differentiating between oncocytomas, now considered benign and appropriate to watch without intervention, and subtypes of RCC, particularly chromophobe RCC, where their malignant nature dictates prompt intervention. Recent studies have shown that as many as 20-25% of kidney tumors following nephrectomy turn out to be benign oncocytomas. Improved diagnoses of oncocytomas might avoid unnecessary surgeries, which would represent an opportunity to reduce costs and avoid nephrectomy related complications. In addition, new therapeutics are beginning to impact survival for patients with malignant RCCs and there appears to be emerging evidence that response is driven, in part, by the subtype of RCC. Consequently, the correct identification of these subtypes is becoming increasingly important to aid in treatment choice."
"The Rosetta Kidney Cancer Test, with its high level of accuracy, can be an important aid to physicians to ensure that the right medical intervention is given to the right patient at the right time, which is what personalized medicine is all about," stated Kenneth A. Berlin, President and Chief Executive Officer of Rosetta Genomics, "With sensitivity and specificity in excess of 95%, we believe this assay is a useful tool for physicians and we are very pleased to have approval to market this important cancer diagnostic for the benefit of patients in New York."
"In order to increase awareness of and demand for the Kidney Cancer Test we have recently provided training to our sales team and will be launching key supporting marketing initiatives, including new promotional materials, web-based programs and telemarketing campaigns," added Mr. Berlin.
PRINCETON, NJ and REHOVOT, ISRAEL--(Marketwired - Dec 2, 2013) - Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and provider of microRNA-based molecular diagnostics, announces the posting of the following Letter to Shareholders to the Investors section of the Company's website at www.rosettagenomics.com.
Dear Fellow Shareholders:
The past months have been a productive and exciting time for Rosetta Genomics as we advanced the development of our microRNA-based platform technologies and the commercialization of our molecular diagnostic assays. Owing to our position at the forefront of microRNA-based diagnostics, Rosetta is well positioned for leadership in personalized medicine with an array of products to predict, diagnose and treat diseases.
We continued to make progress in the three areas critical to the successful commercialization of our lead product, the Rosetta Cancer Origin Test™: Demand generation, demand fulfillment and payer management.
We have recently expanded our dedicated sales force from five to 11 territory managers. While it takes a few months for each such representative to achieve momentum in his or her territory, we have already begun to see encouraging results. In addition to their increasing selling efforts, these sales representatives, in conjunction with Dr. Robert Wassman, Rosetta's Chief Medical Officer, and Steve Miller, Rosetta's Director of Marketing and Reimbursement, are making great strides in enhancing awareness of Cancer of Unknown Primary (CUP) and the need for better diagnostics to identify the tumor of origin. Through a variety of educational seminars, and webinars and through outreach to patient advocacy groups, our team is bringing CUP and our Cancer Origin Test to the attention of pathologists, oncologists and patients in order to drive demand. Toward that end we are growing our customer base, and increasing the number of samples we receive for processing.
Both October and November marked successive record-breaking months for Rosetta in terms of sample volume. Compared to October and November of 2012, we have experienced growth of approximately 2.5-fold and 5-fold, respectively, in terms of samples received in our CLIA lab in Philadelphia. Compared to the average of the first nine months in 2013, these past two months have seen sample volume almost double, a testament to the hard work of our expanded sales force as well as our marketing efforts.
In terms of processed samples, November was by far the strongest month for our Cancer Origin Test, as we processed nearly 50% more samples in November than we had processed during our previous record month. Our year-to-date gross billings have grown by 100% compared to same period last year. We estimate our gross billings will pass the $1 million dollar mark by year-end.
We are enhancing awareness and increasing demand with the continued publication and presentation of data in support of our microRNA-based diagnostics. In October, we presented data from a study of the Cancer Origin Test at the American Society of Human Genetics Annual Meeting. The data showed that our Cancer Origin Test may be of utility in clarifying the cancer risk in pedigrees of families with a history of unknown or uncertain cancers. The findings showed a high frequency of breast, ovarian and colon cancers, including significant numbers of male breast cancers in the CUP population, as well as relatively high frequencies of rare cancers with high familial risk. This demonstrates that pedigrees with unresolved diagnoses from CUP cases could be highly informative if the Cancer Origin Test is applied. The unique stability of microRNA in FFPE preserved tissues makes these analyses possible where they would not be with other analytes such as mRNA, and we believe familial risk assessment could expand the market opportunity for our Cancer Origin Test over time.
We are strengthening global initiatives to enhance patient access to our microRNA-based testing services. For example, we recently expanded our distribution agreement with GeneKor Medical S.A for the sales and marketing of our entire suite of microRNA-based cancer testing services in Romania and Turkey, in addition to our original agreement covering Greece. This new agreement underscores our commitment to expand personalized medicine across the globe, and to help improve patient outcomes. We expect to continue to pursue international distribution agreements and look forward to reporting progress throughout 2014.
We significantly increased Rosetta's demand fulfillment capabilities by doubling the capacity of our laboratory operations in Philadelphia. We have trained additional staff and have room for further expansion down the line if and when needed. In addition, we have established a world-class customer service offering, which continues to be an important component for our ongoing success.
Reimbursement and payor management are critical to the success of any therapeutic or diagnostic product. At Rosetta we are committed to providing the continued support and investment needed for the widespread adoption and commercial success of our products. In August 2013, we were pleased to report the final revised Local Coverage Determination from the designated Medicare Administrative Contractor for our Cancer Origin Test and we continue to receive approximately $3,500 for each test processed for eligible patients covered under the Medicare program.
As Medicare accounts for only a portion of the CUP tests processed, we are working to obtain favorable reimbursement from commercial payors as well. Here we are investing our resources -- both human and financial -- to establish a variety of credentialing agreements and otherwise to seek more frequent and robust payment from commercial payors. One example is our ongoing prospective study in Israel to evaluate outcomes of CUP patients with therapy directed by the results of our Cancer Origin Test compared with standard treatment. Through this study we are assessing the real-world clinical impact and cost-effectiveness of our Cancer Origin Test to demonstrate that use of the test early in the diagnostic workup improves the pharmacoeconomics for the treatment of CUP patients. We look forward to having some data from this study available in the first half of 2014.
In addition we have made significant progress executing credentialing agreements for our Cancer Origin Test with four U.S. national healthcare network providers, increasing coverage for this test to more than 100 million Americans. We expect to announce additional agreements in the near term, which should significantly expand coverage of our Cancer Origin Test to millions more.
Recently we were pleased to report our first payment from the U.K.'s National Health Service (NHS) for our Cancer Origin Test. While this does not signify a universal policy decision, it does represent a pathway for individual patients in the U.K. to gain access to this important test and shows that the NHS recognizes the clinical value of our Cancer Origin Test, in conjunction with the treating oncologist's assessment. It also advances our goal to enhance awareness of and access to our Cancer Origin Test in overseas markets.
As microRNA technology is garnering attention from the scientific, medical and commercial drug-development communities, we believe the time is right to invest in reinvigorating our R&D efforts. Toward that end we were pleased to announce our sponsored research agreement with Ramot at Tel Aviv University for the joint development of a nano-carrier delivery system miR mimetic technology to treat a variety of cancers. This is a potentially breakthrough program, which will allow us to harness the power of microRNA to potentially develop effective new cancer treatments. As this research is being partially funded by Israel's Office of the Chief Scientist, it is a cost-effective way for us to leverage our intellectual property and expand our footprint in cancer therapeutics.
In addition we are advancing development work on a tissue-based initiative underway for a diagnostic assay that rules out a particular cancer, thereby avoiding unnecessary surgeries and saving the healthcare system significant expense while sparing the patient the morbidities associated with surgery. We have several other R&D programs underway or soon to begin that we will be discussing in the near future.
We continue to pursue patent protection for our intellectual property and are pleased to have added six U.S. patents to our growing portfolio during 2013. As a result we have 33 issued patents, including 30 in the U.S. In addition we have 43 patent applications pending, of which 23 are in the U.S. These applications protect the specific microRNAs used in our products and cover composition of matter, diagnostic applications, therapeutic applications and discovery process applications for microRNAs in humans.
This leading patent position provides access to hundreds of potential microRNA biomarkers while our proprietary discovery, extraction and quantification technologies enable the rapid expansion of our pipeline. Importantly we maintain an extensive network of collaborations with leading research centers that provide input from the forefront of medical research as well as access to hundreds of sample types. This solid intellectual property position allows us to protect current products, provides the backbone for new product development and offers the potential for multiple opportunities for research, development and commercial partnerships.
In addition to driving growth through our currently marketed products and from new products derived from our development engine, we are looking at other ways to grow our revenue base. We are in discussions with a number of diagnostics and therapeutics companies, which if successful, would allow us to leverage our cutting-edge microRNA platforms and capabilities for these companies' biomarker and other needs. We believe this has the potential to become another important source of revenues for us in the near term. We also are looking at bringing other products into Rosetta to leverage the investments we are making in our commercial infrastructure and to potentially accelerate our revenue growth.
Moving forward we will continue to make investments in commercial operations and in the further clinical development of our microRNA technology. We expect that our cash position at the end of 2013 of more than $20 million along with the projected revenue from our testing services will be sufficient to fund our operations well into 2015.
We are very pleased with the progress we have made to date and expect 2014 to be an exciting year of growth and accomplishments as we advance our strategic plan in pursuit of our mission to be the pioneering force in microRNA-based personalized medicine to the benefit of patients worldwide.
On behalf of my colleagues and our Board of Directors, thank you for your interest in Rosetta Genomics.
Sincerely,
Kenneth A. Berlin
President and Chief Executive Officer
About Rosetta Cancer Testing Services
Rosetta Cancer Tests are a series of microRNA-based diagnostic testing services offered by Rosetta Genomics. The Rosetta Cancer Origin Test™ can accurately identify the primary tumor type in primary and metastatic cancer including cancer of unknown or uncertain primary (CUP). Rosetta Mesothelioma Test™ diagnoses mesothelioma, a cancer connected to asbestos exposure. The Rosetta Lung Cancer Test™ accurately identifies the four main subtypes of lung cancer using small amounts of tumor cells. The Rosetta Kidney Cancer Test™ accurately classifies the four most common kidney tumors: clear cell renal cell carcinoma (RCC), papillary RCC, chromophobe RCC and oncocytoma. Rosetta's assays are designed to provide objective diagnostic data; it is the treating physician's responsibility to diagnose and administer the appropriate treatment. In the U.S. alone, Rosetta Genomics estimates that 200,000 patients a year may benefit from the Rosetta Cancer Origin Test™, 60,000 from the Rosetta Mesothelioma Test™, 65,000 from the Rosetta Kidney Cancer Test™ and 226,000 patients from the Rosetta Lung Cancer Test™. The Company's assays are offered directly by Rosetta Genomics in the U.S., and through distributors around the world. For more information, please visit www.rosettagenomics.com. Parties interested in ordering the test can contact Rosetta Genomics at (215) 382-9000 ext. 309.
About Rosetta Genomics
Rosetta develops and commercializes a full range of microRNA-based molecular diagnostics. Founded in 2000, Rosetta's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. Rosetta's cancer testing services are commercially available through its Philadelphia-based CAP-accredited, CLIA-certified lab. Frost & Sullivan recognized Rosetta Genomics with the 2012 North American Next Generation Diagnostics Entrepreneurial Company of the Year Award.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's future expectations, plans and prospects, including without limitation: that Rosetta's expanded sales force will be successful in increasing demand generation for Rosetta's tests; that gross billings will exceed $1 million by year-end; that familial risk assessment could expand the market opportunity for Rosetta's Cancer Origin Test over time; that Rosetta will enter into additional international distribution agreements in 2014; the timing of results of the CUP study in Israel; that Rosetta expects to announce additional credentialing agreements in the near term, which should significantly expand coverage of our Cancer Origin Test to millions more; that the sponsored research agreement with Ramot at Tel Aviv University has the potential to result in effective new cancer treatments; that Rosetta will generate revenues in the near-term by leveraging its platforms and capabilities for third-party biomarker and other needs; and that Rosetta's expected cash position at the end of 2013 along with the projected revenue from testing services will be sufficient to fund our operations well into 2015, constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those risks more fully discussed in the "Risk Factors" section of Rosetta's Annual Report on Form 20-F for the year ended December 31, 2012 as filed with the SEC. In addition, any forward-looking statements represent Rosetta's views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. Rosetta does not assume any obligation to update any forward-looking statements unless required by l
PRINCETON, NJ and REHOVOT, ISRAEL--(Marketwired - Nov 27, 2013) - Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and provider of microRNA-based molecular diagnostics, announces that Company management will participate in the LD Micro Conference being held December 3-5, 2013 at the Luxe Sunset Bel Air Hotel in Los Angeles.
Kenneth A. Berlin, President and CEO, will present a corporate overview at 12:00 p.m. Pacific time. A live and archived webcast of the presentation will be available in the Investors section of the Company's website at www.rosettagenomics.com.
After eleven years of researching companies, writing reports, and putting its own capital on the line, LD MICRO launched its first annual conference six years ago to showcase small and microcap companies before an audience of investment professionals who specialize in this market sector. This year over 200 small and microcap companies will highlight their promising growth stories before an audience of over 1000 professional investors.
About Rosetta Cancer Testing Services
Rosetta Cancer Tests are a series of microRNA-based diagnostic testing services offered by Rosetta Genomics. The Rosetta Cancer Origin Test™ can accurately identify the primary tumor type in primary and metastatic cancer including cancer of unknown or uncertain primary (CUP). Rosetta Mesothelioma Test™ diagnoses mesothelioma, a cancer connected to asbestos exposure. The Rosetta Lung Cancer Test™ accurately identifies the four main subtypes of lung cancer using small amounts of tumor cells. The Rosetta Kidney Cancer Test™ accurately classifies the four most common kidney tumors: clear cell renal cell carcinoma (RCC), papillary RCC, chromophobe RCC and oncocytoma. Rosetta's assays are designed to provide objective diagnostic data; it is the treating physician's responsibility to diagnose and administer the appropriate treatment. In the U.S. alone, Rosetta Genomics estimates that 200,000 patients a year may benefit from the Rosetta Cancer Origin Test™, 60,000 from the Rosetta Mesothelioma Test™, 65,000 from the Rosetta Kidney Cancer Test™ and 226,000 patients from the Rosetta Lung Cancer Test™. The Company's assays are offered directly by Rosetta Genomics in the U.S., and through distributors around the world. For more information, please visit www.rosettagenomics.com. Parties interested in ordering the test can contact Rosetta Genomics at (215) 382-9000 ext. 309.
About Rosetta Genomics
Rosetta develops and commercializes a full range of microRNA-based molecular diagnostics. Founded in 2000, Rosetta's integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. Rosetta's cancer testing services are commercially available through its Philadelphia-based CAP-accredited, CLIA-certified lab. Frost & Sullivan recognized Rosetta Genomics with the 2012 North American Next Generation Diagnostics Entrepreneurial Company of the Year Award.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's future expectations, plans and prospects, including without limitation, Rosetta's Cancer Origin Test™, Rosetta's development or commercialization of molecular diagnostics, the market acceptance of Rosetta's cancer testing services, particularly the Rosetta Cancer Origin Test™, Rosetta's development of personalized medicine products and services, Rosetta deriving value from microRNA technology for use in a variety of diagnostics, the reproducibility, robustness and accuracy of Rosetta's microRNA technology and its ability to help optimize treatment, constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those risks more fully discussed in the "Risk Factors" section of Rosetta's Annual Report on Form 20-F for the year ended December 31, 2012 as filed with the SEC. In addition, any forward-looking statements represent Rosetta's views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. Rosetta does not assume any obligation to update any forward-looking statements unless required by law.
ipci 1,865 +7,8%
Update on Aeterna Zentaris' Cetrotide
ZacksBy Zacks Equity Research | Zacks – 19 hours ago
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Aeterna Zentaris Inc.’s (AEZS) source of revenue includes sales, royalties and license fees. Sales are derived from Cetrotide and royalties are derived indirectly from Merck KGaA’s (MKGAF) net sales of Cetrotide.
License fees include periodic milestone payments, research and development contract fees and the amortization of upfront payments received from licensing partners. Merck KGaA’s subsidiary Merck Serono markets Cetrotide globally (excluding Japan).
Cetrotide is a luteinizing hormone-releasing hormone (:LHRH) antagonist treatment approved for in vitro fertilization. Sales and royalties for the quarter ended Jun 2013 were $29.8 million.
In Apr 2013, Aeterna Zentaris had entered into an agreement with Merck KGaA to grant the latter manufacturing license and transfer manufacturing rights of Cetrotide. This agreement was completed in Oct 2013. As per the deal, Merck KGaA will pay a one-time payment of €2.5 million/ $3.3 million to Aeterna Zentaris.
In Nov 2008, Aeterna Zentaris had monetized the royalty stream related to Cetrotide in a transaction with HealthCare Royalty Partners.
We note that Cetrotide is marketed in 3 mg and 0.25 mg dosages by Merck Serono in the U.S. and Europe. It was launched in Japan in Sep 2006. It is marketed in Japan by its partner Shionogi.
Aeterna Zentaris has its focus on developing AEZS-108, AEZS-130 and AEZS-120. AEZS-108 is in a phase III ZoptEC study for the treatment of endometrial cancer and in phase II studies for the treatment of breast, prostate and bladder cancer. The company intends to seek U.S. approval for AEZS-130 for growth hormone deficiency. Aeterna Zentaris will commence a phase I study on AEZS-120 for treating prostate cancer.
Aeterna Zentaris currently carries a Zacks Rank #3 (Hold). Currently, companies like Roche Holding (RHHBY) and Actelion Ltd. (ALIOF) look more attractive with a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on AEZSRead the Full Research Report on RHHBYRead the Full Research Report on MKGAFRead the Full Research Report on ALIOFZacks Investment Research
Netflix Insiders Take the Money and Run
By Adam Levine-Weinberg | More Articles | Save For Later
August 29, 2013 | Comments (4)
As Netflix (NASDAQ: NFLX ) stock has soared in 2013, company insiders have been cashing in on their stock options and heading for the exits at an alarming rate. There are many reasons that a public company's officers and directors might sell immediately after exercising stock options: They could be looking to supplement their cash earnings. They might need the money to offset tax liabilities. Or they may want to diversify their risks.
However, this behavior could also be a sign that insiders think their company's stock has become overvalued. This year's flood of insider selling at Netflix has been extreme enough that it is hard to attribute everything to "benign" motives. A more plausible explanation is that Netflix insiders haven't bought in to the enthusiasm that has caused the stock to triple this year.
NFLX Chart
Netflix YTD Stock Chart, data by YCharts.
If Netflix insiders are skeptical of the stock's recent run, other investors could run into trouble soon. If the company's future growth falls short of Mr. Market's expectations, the stock could easily drop by 50% or more as it did in 2011.
Steady selling
Netflix insiders have been exercising their stock options to cash in on Netflix's rapid rise since early this year. For Q1, Netflix insiders exercised options for 556,819 shares of stock at a weighted-average price of $70.30 . By contrast, fewer than 200,000 options were exercised in all of 2012 due to the stock's massive drop from its 2011 peak to the 2012 trough. Option exercises continued at a rapid pace last quarter, bringing the total for 2013 to just more than 1 million options exercised at an average price of $67.70.
Bailing out has been an equal-opportunity sport for Netflix insiders. Netflix CEO Reed Hastings stated early this year that he had options expiring every month beginning this summer, and that he planned to sell as the options hit their expiration dates . Sure enough, beginning in late June, Hastings has exercised options to buy 15,238 shares each month and immediately sold the stock, booking millions of dollars in capital gains each time.
Despite this selling, Hastings remains a major shareholder in Netflix, with more than 1 million shares held in trust. Thus, Hastings' actions do not suggest that he expects Netflix to crash anytime soon. (That said, Hastings pointedly declined to comment about whether he was "comfortable" with the valuation of Netflix stock during the company's Q2 earnings interview.)
Other company insiders have shown less faith in Netflix's potential. Just in the past two months, two of the six independent directors on Netflix's board have made major sales. In July, George Battle sold more than 23,000 shares of Netflix stock, while Timothy Haley sold nearly 20,000 shares in August. Director Leslie Kilgore (who was Netflix's chief marketing officer until early 2012 ) has been selling at a steadier pace over the course of the year, dumping nearly 40,000 shares in total.
Among prominent Netflix executives, Chief Content Officer Ted Sarandos sold more than 83,000 shares shortly after Netflix popped above $200 in May. General Counsel David Hyman began selling around the same time, and has unloaded more than 26,000 shares since May. CFO David Wells also joined the party in May, and has sold more than 30,000 shares since then.
Foolish bottom line
Netflix executives may seem confident in the company's future when they appear on conference calls or talk to the media. However, a look at what they are doing casts doubt on this facade. Numerous Netflix officers and directors are selling millions of dollars worth of stock acquired through options. Aside from Reed Hastings, most of these insiders do not have significant long-term holdings of Netflix stock.
Of course, insider selling does not guarantee that a stock is going to fall. However, the behavior of many Netflix insiders suggests that their incentives may not be fully aligned with those of long-term shareholders. By exercising stock options and selling immediately, these officers and directors are banking millions of dollars of profits based on Netflix's current stock price. If this year's Netflix stock rally turns out to be yet another bubble, these insiders will not suffer nearly as much as shareholders who are still holding their positions.
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Aeterna Zentaris Inc. (AEZS) recently enrolled and dosed the first patient in its phase III study on AEZS-108 (zoptarelin doxorubicin) for the treatment of endometrial cancer in women who are not responding to platinum/taxane-based chemotherapy.
We note that AEZS-108 will be evaluated under the U.S. Food and Drug Administration’s (:FDA) Special Protocol Assessment (SPA) in the phase III trial. The open-label, randomized, multi-center (North America, Europe, Israel and other countries), phase III trial will enroll approximately 500 patients. The primary efficacy endpoint of the trial is significant improvement in median overall survival.
Earlier, in Sep 2011, Aeterna Zentaris had presented encouraging data from a phase II study evaluating the efficacy and safety of AEZS-108 in patients suffering from advanced endometrial cancer at the European Society of Gynecological Oncology.
The candidate demonstrated an overall response rate and a clinical benefit rate of 30.8% and 74.4%, respectively. Median overall survival was 13.7 months, while median time-to-progression was found to be 7 months. AEZS-108 was well tolerated in the trial.
According to the National Cancer Institute, it is estimated that 49,560 new cases and 8,190 death cases of endometrial cancer could be reported in the U.S. in 2013.
Aeterna recently entered into an agreement with Ergomed Clinical Research Ltd. for co-developing AEZS-108 for endometrial cancer.
As per the terms of the agreement, Ergomed will bear 30% (up to $10 million) of the costs (clinical and regulatory) for the recently initiated phase III trial.
In exchange, Aeterna Zentaris will pay Ergomed an agreed single-digit percentage on net income from AEZS-108 sales for the above mentioned indication.
AEZS-108 is also being evaluated for several other indications including ovarian cancer (phase II completed), prostate cancer (phase II), breast cancer (phase II) and bladder cancer (phase II). We note that AEZS-108 has received orphan drug status from the FDA for ovarian cancer. The European Medicines Agency has also granted orphan medicinal product designation to the candidate for ovarian cancer.
Aeterna Zentaris, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). However, biopharma stocks that currently look attractive include Actelion Ltd. (ALIOF) and Medivation, Inc. (MDVN) with a Zacks Rank #1 (Strong Buy) and Jazz Pharmaceuticals (JAZZ) with a Zacks Rank #2 (Buy), respectively.
Read the Full Research Report on AEZS
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