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Pharmas Market with Mike Huckman

  Thursday, 25 Mar 2010 | 2:57 PM ET

The Battle of BioMarin

Posted By: Mike Huckman

One of the many things I think is great about Twitter is the direct contact it gives me with a handful of biopharma reporters who are using it. Don't get me wrong. We're not giving away scoops. No way! But I do get to see what a few of them are paying attention to. Sometimes we get into interesting exchanges and occasionally I spot a story idea.

In fact, I got the tip for this blog post from a tweet TheStreet.com's Adam Feuerstein sent out yesterday. He spotted this rather extraordinary SEC filing from BioMarin Pharmaceuticals . It's a resignation letter from one of its board members, Joseph Klein. Now, usually that kind of stuff is pretty boring and boilerplate. For example, "I have submitted my resignation, effective immediately, for personal reasons." Or, "I hereby resign, effective immediately, so I can spend more time with my family and pursue other interests." Blah, blah, blah. But, no. This resignation letter appears to be sending shares of BMRN to a new high in very heavy trading volume. Klein airs several pieces of dirty laundry in the letter, but the biggest item is this: "Disagreement with the CEO on How and When the CEO should present to our entire Board a serious, reasonable offer by a third party to acquire the company."

The company responds that it "disputes Mr. Klein's assertion that Mr. Bienaime, (the CEO,) received a bona fide offer from a third party and failed to share this offer with the Board for consideration. Notice that the company used the words "bona fide offer." Klein used the words "serious, reasonable offer." And speaking of bona fides, Klein sits on the boards of OSIPharma, Savient and Isis. The company also intimates that Klein is trying to save face by resigning because the rest of the board had decided not to re-nominate him. Liana Moussatos, who covers BMRN for Wedbush Securities, says there's been speculation about the company being a takeout target for years, but that she was completely surprised by the tit-for-tat in the SEC filing. She says feedback from investors suggests they think "maybe there was a low-bid offer that wasn't taken seriously." Moussatos has been neutral on the stock because of its price. Wedbush makes a market in BMRN and wants to do business with the company. As Adam Feuerstein tweeted, "I love a good fight." So do I. So do I.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Wednesday, 24 Mar 2010 | 2:42 PM ET

A Turning Point For Termeer?

Posted By: Mike Huckman

Carl Icahn, reputed to be a late-riser, woke up to good news and bad news today.

First the bad news: His stake in Genzyme is worth less. The good news? His chances of winning a proxy fight against the embattled biotech might be greater.

For those who aren't familiar with the company, Genzyme is kind of unique in that it has been built around drugs for rare diseases that few, if any, other companies bother with. And then it charges a pretty penny for them.

As Bernstein analyst Geoffrey Porges wrote in a research note to clients, "The case for activist involvement, including restructuring of the company and changes to top management, is now stronger than ever." Icahn has nominated himself and three of his people to be on the GENZ Board of Directors because he thinks the formerly high-flying biotech stumbled big time last year when its Boston manufacturing plant got contaiminated by a virus. I blogged about the plant when the company gave did a little show-and-tell tour before my interview with the comapny's chairman and CEO Henri Termeer a few months ago.

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  Monday, 22 Mar 2010 | 2:03 PM ET

The Human Tragedy Behind A Drug Deal

Posted By: Mike Huckman

Shares of Teva Pharmaceutical (there’s awkwardly no “s” at the end because its full name is Teva Pharmaceutical Industries) are once again trading at an historic high.

But they might not be there today if it weren’t for a tragedy.

One of my Twitter followers tweeted this link to an article that details the awful backstory on what happened to the founder of Ratiopharm. Teva is buying the German generic drug company for nearly five billion bucks. Adolf Merckle literally threw himself in front of a train because he lost his shirt speculating in shares of VW. So, his family put Ratiopharm on the auction block.

He owned a drug company. No doubt, he could have had access to all sorts of pharmaceuticals. But instead of taking an overdose, he committed the ugly, messy spectacle of jumping in front of a train.

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  Thursday, 18 Mar 2010 | 3:41 PM ET

Pfizer’s Kindler KO’d by Teva’s Yanai

Posted By: Mike Huckman
Teva and Pfizer
Teva and Pfizer

The 800-pound gorilla of one industry has beaten the 800-pound gorilla of another. Teva CEO Shlomo Yanai took on Pfizer CEO Jeff Kindler and won . Not the sandal company Teva, which is pronounced tee-vuh, but the generic drug company Teva, which is pronounced teh-vuh. \(It’s Hebrew, by the way, for nature.\)

Usually these two Goliaths fight each other tooth and nail over drug patents. PFE’s lawyers work to protect them, TEVA’s attorneys work to break them. It’s just the nature of the branded and generic drug businesses these days. They’re just as much law firms as they are pharma firms. After all, Kindler was PFE’s top lawyer before becoming CEO.

But in this case, the two were duking it out over an acquisition target.

They both wanted a privately held generic drug company in Germany, named Ratiopharm . Teva and Pfizer have deep pockets. But the Israeli generic drug giant was apparently willing to dig deeper than Pfizer and came in with the highest bid.

Typically, when a publicly traded company like Teva goes out and spends around $5 billion to buy another company, investors will sell the stock. They figure profits will likely take at least a temporary hit, workers and management will be distracted by putting the two companies together, etc. But that’s not what they’re doing today with shares of Teva, which are trading at an all-time high. The company says the deal is going to add to earnings quicker than some analysts thought it would.

Tomorrow morning I’ll be doing a live interview with Teva’s North America CEO Bill Marth on “Squawk On The Street” shortly after 9 a.m. ET. We’ll be talking about the deal and, of course, health care reform coming to a head and what it will mean to Teva and the generic drug industry. Teva is fast becoming the generic drug industry. I guess, if the sandal fits, wear it.

  • Some facts about Teva's acquisition of Ratiopharm
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  Tuesday, 16 Mar 2010 | 1:48 PM ET

Lilly Mans Up Its Pipeline

Posted By: Mike Huckman
Axiron
Source: acrux.com
Axiron

I can hear the commercial now. “Underarm protection that literally makes you feel more like a man.”

The company that brought you the impotence drug Cialis is trying to strengthen its limp drug development pipeline by doing a deal down under.

Lilly could spend more than $335 million on the partnership with Aussie company, Acrux, on a deodorant-like product to treat low testosterone.

So, if the FDA approves it, you could put it on in the locker room with no one knowing it isn’t anti-perspirant/deodorant (unless, of course, they use it, too.)

But, here’s the rub.

The stuff is called “Axiron.” It’s just a hunch on my part, but I think Unilever , which owns the popular male-scent product line Axe, is gonna have a problem with the Axiron name. They’d both be making underarm products, one called Axe, the other Axiron. I’m betting Unilever , whose U.S. headquarters are right nextdoor to CNBC’s global HQ in Englewood Cliffs, NJ, will have an 'axe' to grind about that.

I didn’t know this until I read the LLY press release on my BlackBerry last night, but hypogonadism or low testosterone is estimated to affect up to 39 percent of men over 45. But most of those guys don’t know that’s why their sex drive or libido might be low. The companies say only around 10 percent of the men with the problem get treated for it. Lilly and Acrux cite data from IMS Health, which monitors drug markets, that show testosterone-boosting products have grown into a blockbuster category, with sales of more than a billion bucks a year. U.S. sales of gels account for $700 million of that.

Last September, Acrux said a late-stage study of Axiron showed 84 percent of test subjects had their testosterone levels back within a normal range after four months on the drug. Based on those results, the company filed for FDA approval in January.

Acrux and Lilly are now waiting for the FDA to make a decision. I, for one, can’t wait. Not for the product, mind you, but to cover it.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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  Monday, 15 Mar 2010 | 3:11 PM ET

March Monday Madness

Posted By: Mike Huckman

Of course, I'm off the day all heck breaks loose on the beat and stocks are making big moves all over the place.

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  Thursday, 11 Mar 2010 | 12:19 PM ET

One More Day For Once-A-Week Byetta

Posted By: Mike Huckman

I can’t recall this much disagreement on Wall Street specifically about the timing and outcome of an FDA decision on whether to approve a drug.

Tomorrow is the day the agency is scheduled to announce if the first once-a-week diabetes treatment, a rejiggered version of the now twice-a-day Byetta, can come to market.

Lilly, Amylin and Alkermes are partners on it.

Some analysts and investors think the injection will get full-on approval. Others believe it’ll get the green light, but with safety warnings. Still others predict the FDA will ask for more data resulting in a relatively short delay. And there’s another camp that says the agency wants more study results which would put off a ruling even longer.

I don’t get involved in making predictions about stuff like this, especially when it involves the FDA.

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  Tuesday, 9 Mar 2010 | 2:31 PM ET

A Tale Of Two Sectors

Posted By: Mike Huckman

I am not a numbers cruncher. In high school, for example, I elected to take what the Los Angeles Unified School District called "Algebra Experiences." It was a euphemism for, "If you can't hack Algebra 1 and 2 in a single semester, we'll spread it out over four semesters." And I still struggled with it.

So, thank goodness for the stock stat mavens here at CNBC.

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  Monday, 8 Mar 2010 | 4:04 PM ET

Eau de Glaxo

Posted By: Mike Huckman

It's not quite the same as waiting for new, entertaining commercials during the Super Bowl, but there was a noteworthy premiere during last night's Academy Awards.

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  Thursday, 4 Mar 2010 | 4:06 PM ET

Battling Bets On Byetta

Posted By: Mike Huckman

I guess this is what makes a market.

This morning, BMO Capital Markets biotech analyst Jason Zhang downgraded shares of Amylin Pharmaceuticals to the equivalent of "Sell."

On or before March 12th, the FDA is scheduled to decide whether to approve the first once-a-week drug for diabetes. It's a reformulated version of twice-a-day Byetta from AMLN and Lilly . Alkermes provides the technology that makes the Byetta last longer. But Zhang thinks the FDA is going to punt. He tells clients in the research note that he believes the agency will want more data about possible side effects, which will push approval of the drug until mid or late 2011. His call moved the stock, which Zhang now targets as being headed for $12, down from his previous $14.

But on the flip side, biotech analyst Thomas Wei at Jefferies put out a note this morning saying, "We acknowledge a higher chance of approval of (once-a-week Byetta) on March 12 than we had previously factored....We see the risk-reward on AMLN as favorable." He has a $27 target on the shares. Wei's call is based on his conversation with a former senior FDA official. "We were surprised by his assessment that our previous thesis on the need for AMLN to add more thyroid data is unlikely to cause a delay in approval." The thyroid data he's referring to is a problem that was seen only in lab rodents given a similar drug from Novo Nordisk .

Last week, the FDA put off its scheduled decision deadline date by one week because of the recent snowstorms that shut down its offices for several days.

The two conflicting analyst calls today are emblematic of an intensifying debate on Wall Street about what the FDA is going to do here. I've covered the beat long enough to know you can't predict such things.

Jefferies makes a market in AMLN and ALKS. BMO makes a market in AMLN.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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