Healthcare Review: Inovio Pharmaceuticals, Dendreon, Codexis, Synta Pharmaceuticals, Chelsea Therapeutics Print E-mail
By Staff and Wire Reports   
Wednesday, 13 November 2013 15:22
Global equity markets slipped on Wednesday on weaker-than-expected data from the euro zone, while the dollar strengthened as investors increasingly believe the Federal Reserve will trim monetary stimulus before other major central banks. That sentiment damped investors' appetite for risky assets and created a modest bid for U.S. Treasuries, even in front of new supply. Most dealers who underwrite U.S. Treasury auctions think the Fed will not start to trim its bond purchases until March 2014 or later, according to a Reuters poll done Friday after the release of October U.S. employment data.

Inovio Pharmaceuticals ($INO +4.6%) trades higher on the heels of the company's Q3 report. INO said it had cash and equivalents of $46.3M as of September 30 and received some $11M more thereafter, most of which is attributable to a $10M upfront payment from Roche. For more on the Roche deal, see here. Commenting, analyst Raghuram Selvaraju says that although Aegis "expects positive data from INO's cervical cancer vaccine Phase 2 study in the coming months, INO shares currently represent a relatively neutral risk/reward proposition." Hold rating maintained and price target is $2.50.

Dendreon ($DNDN -2.3%) slips as investors and analysts digest the company's Q3 results. Provenge sales missed expectations and some, like Stifel's Joel Sendek, are skeptical of the company's ability to stay afloat. Sendek has the shares at Sell with no price target. Meanwhile, William Blair's Katherine Xu is holding out some hope, saying that the company could manage to turn a profit if Provenge sales could hit $90-95M/quarter (so, at least 32% above Q3 sales). The price target at William Blair is $2.For its part, Needham downgraded the shares to Neutral from Buy, saying the company's cost-cutting efforts may be "too little too late" despite "clinical data support[ing] wider and earlier use of Provenge."

Codexis ($CDXS) falls 27% premarket on the heels of its Q3 business update. Revenues for the period fell 44% sequentially. Product revenues for Q3 dove 78% — the company blames "continued weakness in [the] atorvastatin enzyme business and delayed ramp up of sales to Merck of enzymes for the manufacturing process of Januvia." Product gross margins doubled Q/Q to 54%, while R&D expense fell 21% from Q2. The company said it is "immediately" winding down its cellulase enzyme program. CDXS cited "the market's undervaluation of the prospects and continued slow build out of cellulosic ethanol facilities" for its inability to "secure a suitable partnership or transaction for [the] CodeXyme business."

Synta Pharmaceuticals ($SNTA) tumbles 10%.The company priced a 14M share offering at $3.75, a 12% discount to Tuesday's close. The deal's underwriters have an option on an additional 2.1M shares.

Chelsea Therapeutics ($CHTP) shares add a 6% loss after the company announces it will offer common shares in a public follow-on. The amount has not been disclosed. Chelsea intends to use proceeds to fund its droxidopa program, including regulatory and initial commercialization activity.

 




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