MNTA - The Clouds Are Parting One way or the other!
The cloud of uncertainty that's been hanging over ViroPharma (Nasdaq: VPHM) for many years may finally be lifting. The Food and Drug Administration has scheduled an advisory committee meeting for Aug. 4 to get input on whether the agency should approve generic versions of ViroPharma's antibiotic, Vancocin.
Vancocin, which fights C. difficile, a potentially deadly hospital-acquired infection, has been approved for sale since 1986. All the patents have expired, but Vancocin doesn't have any generic competition in the U.S. because the FDA hasn't allowed generic-drug companies to use laboratory tests to prove that their knockoffs are equivalent. Instead the agency has required generic-drug companies to run an expensive clinical trial to prove equivalency, which might not be financially feasible, given the lower margins on generic drugs. Three years ago the FDA signaled that it was thinking about lifting the clinical trial requirement, but ViroPharma has been fighting that the entire way.
A similar issue has plagued Momenta Pharmaceuticals and Novartis (NYSE: NVS), as they've tried to formulate generic versions of sanofi-aventis' (NYSE: SNY) Lovenox. Proving to the FDA that the drug is equivalent using laboratory tests has been difficult and they're likely to run into a similar fight as they try to get an approval for a generic version of Teva Pharmaceuticals' (Nasdaq: TEVA) equally complex Copaxone.
Antibiotics have become big business as bacteria have become more resistant to drugs. Last year Cubist Pharmaceuticals' (Nasdaq: CBST) Cubicin and Vancocin saw sales jump 45% and 14% year over year, respectively. And big pharma like Wyeth (NYSE: WYE) and Johnson & Johnson (NYSE: JNJ) have tried to get drugs approved or expanded to fight additional infections.
ViroPharma is trading at about twice its trailing-twelve-months sales, which is a pretty steep discount considering that its newest drug, Cinryze, just hit the market and should ramp up from here. Investors apparently are discounting sales of Vancocin until the uncertainty is over. Whether that'll happen in August or in three more years remains to be seen.
June 1 (Bloomberg) -- Bristol-Myers Squibb Co. isn’t in talks to buy a stake in Elan Corp., the Irish drugmaker that’s seeking financing, according to UBS AG analysts.
“BMY has confirmed to us that it is not currently in talks to buy a minority stake in Elan,” Roopesh Patel and Keyur Parekh, New York-based analysts for UBS, wrote in a report today. Brian Henry, a spokesman for New York-based Bristol- Myers, said in an e-mail the company had “no comment on rumors and speculation.”
Elan in January said it hired Citigroup Global Markets Inc. to consider a merger, sale or strategic alliance as possible options to finance tests on its experimental drugs, led by bapineuzumab for Alzheimer’s, and repay $1.1 billion in debt due in 2011. A person familiar with the deal said yesterday that Bristol-Myers was in talks with the Dublin-based company.
Elan Chief Executive Officer Kelly Martin said April 22 the “preferred outcome” was a partnership with another drugmaker, including the sale of a minority stake.
Pfizer Inc., the world’s largest drugmaker, is acquiring Madison, New Jersey-based Wyeth for $65 billion. Merck & Co. of Whitehouse Station, New Jersey, is spending about $44 billion to buy rival Schering-Plough Corp. of Kenilworth, New Jersey. Bristol-Myers in March formed a group of top managers to pursue deals and drug development.
James Cornelius, Bristol-Myers chief executive officer, has said he is looking for acquisitions after the company finished 2008 with $8 billion in cash. Bristol-Myers had $7.8 billion in cash at the end of March, according to data compiled by Bloomberg.
Specialty Drugs
Elan, like Bristol-Myers, is focused on specialty drugs for multiple sclerosis, Alzheimer’s and Parkinson’s disease, the UBS analysts wrote. The value of a deal would have hinged on successful trials of bapineuzumab, which in our view has meaningful development risks,” according to the analysts, who have a “buy” rating on Bristol-Myers.
Niamh Lyons, a spokeswoman for Elan, declined to comment in an interview today. Representatives of the two companies previously had declined to comment on the report that they were in talks. Bristol-Myers was one of two contenders for a stake in Elan, the Wall Street Journal reported May 30.
Elan shares rose 34 cents, or 6.6 percent, to 5.40 euros at 12:33 p.m. in London. The stock surged as much as 10 percent. Markets in Dublin are closed for a national holiday.
Elan reported a first-quarter loss of $102.6 million, a 20 percent increase from a year earlier. Sales of its multiple sclerosis drug Tysabri, which is marketed with Biogen Idec Inc. of Cambridge, Massachusetts, rose 44 percent over the same period a year earlier, Biogen reported April 16. It is developing bapineuzumab for Alzheimer’s with Wyeth.
Elan’s shares rose 8.5 percent on May 5 on speculation that Danish drugmaker H. Lundbeck A/S would make a bid for the company.
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