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Premarket Movers: Encysive Pharma Jumps

Tuesday July 17, 9:08 am ET

Encysive Pharma Seeking Alternatives, Shares Soar; Metabasis Dives on Drug Study Failure

NEW YORK (AP) -- News that Encysive Pharmaceuticals Inc. is exploring strategic alternatives boosted shares of the biopharmaceutical company in Tuesday's premarket trading session.

Encysive said it has retained Morgan Stanley to help evaluate strategic alternatives to maximize value for shareholders. -- a phrase often interpreted by traders as putting the company up for sale.

Tuesday's news follows the company's announcement last month that its hypertension drug, Thelin, did not win Food and Drug Administration approval.

Shares gained 27 cents, or 15.8 percent, to $1.97, from their $1.70 finish in regular trading Monday.

Also rising were shares of BEA Systems Inc., up 30 cents, or 2.2 percent, to $13.75, after ending at $13.45 in regular trading.

Credit Suisse analyst Jason Maynard upgraded the stock to "Outperform" from "Neutral" and raised his price target to $17, saying that Oracle Corp. or a private equity firm may express interest in buying BEA Systems.

"Over the course of the last few months we believe BEA Systems is feeling more pressure to aggressively pursue a path that maximizes shareholder value," Maynard wrote in a client note.

Maynard said while management may be hesitant about selling the business, "they are rapidly losing the ability to influence that decision."

Elsewhere in the green, shares of Dow Jones & Co. inched up on news that Rupert Murdoch's News Corp. has reached a tentative agreement to buy the publisher of The Wall Street Journal.

The news, which was reported by the Journal on its Web site, lifted shares of Dow Jones 55 cents to $57.50. Shares ended at $56.95 on Monday.

The Journal cited unnamed people close to the situation and said negotiators from the two companies have agreed to the original $5 billion that Murdoch offered. News Corp. shares inched up 14 cents to $23.77 premarket, from their close at $23.63 Monday.

On the losing side, shares of Metabasis Therapeutics Inc. tanked, after the biopharmaceutical company said diabetes drug candidate CS-917 failed to significantly lower blood sugar in a mid-stage trial.

The stock tumbled $4.40, or 64 percent, to $2.50, following a $6.90 finish on Monday.