Replies to post #96062 on Biotech Values

[mcbio]

Re: GHDX

The recent pull back in GHDX is primarily due to the much slower than expected growth in their OncotypeDX Node-Negative Breast cancer test. The ceo attributed this to the economy ($3,500 test) and the "distraction" of their recent colon cancer test launch. However, their OncotypeDX Node-Positive test did not experience the same "distraction". The ceo attributed this to the positive clinical trial data their node positive test has been receiving as of late.

This could be a buying opportunity or it may indicate larger management issues, imo, it may take another quarter to know which.

Interesting. Thanks for the response. I'm inclined to dig a little deeper into GHDX.

[DewDiligence]

NVS Acquires GXDX for $25/sh in Cash

[GXDX is a diagnostics company that focuses on personalized medicine in hem-onc. This is a merger spawned by adversity insofar as GXDX has had a bad year, but the company fits nicely in NVS’ small but growing Vaccines and Diagnostics segment. The buyout has an enterprise value of $330M and a 27% premium to GXDX’s closing price on Jan 21. (The claim of a 39% premium relative to the “unaffected” share price on 12/13/10 is disingenuous, IMO, because 12/13/10 is merely the date when GXDX hired Barclays.)]

http://finance.yahoo.com/news/Genoptix-Announces-Agreement-prnews-2968378111.html?x=0&.v=1

›Monday January 24, 2011, 3:05 am EST

SAN DIEGO, Jan. 24, 2011 /PRNewswire/ -- Genoptix, Inc. (Nasdaq:GXDX) announced today that it has entered into a definitive merger agreement to be acquired by Novartis. Under the terms of the merger agreement, Novartis will commence an all cash tender offer for all outstanding shares of common stock of Genoptix at USD$25.00 per share. The transaction implies, on a fully-diluted basis, a total equity value of approximately USD$470 million and an enterprise value of USD$330 million.

The $25.00 per share cash offer price represents a premium of 39% over Genoptix' unaffected closing share price of $17.98 on December 13, 2010 [see comments in the prologue of this post] and a 27% premium over the closing price of USD$19.76 on January 21, 2011.

Genoptix' Chief Executive Officer, Tina S. Nova, Ph.D., stated, "We believe this transaction provides substantial value and liquidity to our stockholders. We are excited about becoming part of the Novartis Molecular Diagnostics (MDx) unit and continuing to enhance the value that we bring to our core community oncologist customers. We share Novartis' strong commitment to transforming patient care, improving health outcomes for patients and enhancing the suite of diagnostic tools for our physician customers."

Genoptix' board of directors unanimously determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of Genoptix and its stockholders, and recommends that Genoptix' stockholders tender their shares and adopt the merger agreement.

Each of Genoptix' directors and executive officers has agreed to tender their shares in the offer.

The transaction is conditioned upon the tender of at least a majority of the shares of Genoptix in the tender offer, receipt of regulatory approvals and other customary closing conditions. The transaction is expected to close within the first half of 2011.

The terms and conditions of the tender offer will be described in the tender offer documents, which will be filed with the U.S. Securities and Exchange Commission ("SEC").

Barclays Capital is serving as financial advisor to Genoptix and Cooley LLP is serving as Genoptix' legal advisor.

About Genoptix, Inc.

Genoptix is a specialized laboratory service provider focused on delivering personalized and comprehensive diagnostic services to community-based hematologists and oncologists. Genoptix is headquartered in Carlsbad, California.‹

[DewDiligence]

GHDX diagnostic for DCIS* hits primary endpoint:

The ECOG 5194 validation study met its primary endpoint by demonstrating that a pre-specified Oncotype DX DCIS Score can predict the risk of local recurrence, defined as either the development of a new invasive breast cancer or the recurrence of DCIS in the same breast. ECOG and Genomic Health plan to submit complete data from this study for presentation at the 2011 San Antonio Breast Cancer Symposium in December. Based on these positive findings, Genomic Health plans to make the Oncotype DX DCIS Score available to patients and physicians worldwide by year end.

*DCIS = ductal carcinoma in situ, the least invasive form of breast cancer.