Healthcare Review: OraSure, Zalicus, Celsion, BioLineRx, Galena Biopharma Print E-mail
By Staff and Wire Reports   
Tuesday, 26 November 2013 16:45
U.S. stocks were little changed Tuesday during a holiday-abbreviated week as investors found few incentives to extend a rally that has repeatedly taken indexes to fresh highs. Wall Street has soared this year, boosted by expectations Federal Reserve stimulus will continue. While some data, including consumer confidence on Tuesday, has indicated that growth continues to be anemic, the Fed's program is expected to keep a floor under equities for as long as it continues. Still, many investors have called for a pullback given the scope of the equity rally and signs of weakness.

Shares of OraSure ($OSUR) rebound after Monday's big losses as Citi comes to the company's defense amid concerns that the FDA's warning to customer 23andMe could hit OSUR's top-line. Citi reminds investors that 23andMe accounts for less than 5% of OSUR's revenue. In response to the 23andMe controversy, OSUR is out reaffirming Q4 guidance: "This reaffirmation is being made after the company learned today that a customer of its molecular collection systems subsidiary, DNA Genotek, received a warning letter from the FDA," OSUR said.Q4 outlook: Consolidated net income of $0.07-0.08/share on revenue of $27.5-28M

Moving notably higher on the session are shares of beaten down pain management company Zalicus ($ZLCS). Volume is already more than double the 10-day average in the name. Still, the shares are ~75% below where they traded before news hit that Z160 did not meet its primary endpoint in two Phase 2 trials. The company is now pinning its hopes on Z944.Here's SA contributor Jason Napodano: "I spoke with management. Talked about a number of reasons why Z944 is different from Z160. Will share soon."

Celsion ($CLSN) rallies after announcing a new strategic loan facility with Hercules Growth Capital (HTGC).Under the deal, CLSN can tap up to $20M in multiple tranches — the first tranche ($5M) was drawn yesterday. CLSN used ~$4M to payoff an existing loan agreement. "Our current cash position, $45.5M as of September 30, is expected to provide resources sufficient to fund current operations well into the second half of 2016," CEO Michael Tardugno says, adding that this time frame should include "expenses associated with [the] planned pivotal Phase 3 HCC trial."

BioLineRx ($BLRX) is enjoying a strong session (investors seem to like the BL-7040 update), although the shares are off their premarket highs. Aegis' Ram Selvaraju says the new data "significantly enhances the level of validation for BL-7040's mechanism of action in IBD. "Buy rating maintained, price target is $7. Selvaraju is also looking forward to: Results from the Phase 1 trial of BL-8020 and the Phase 2 open-label trial of BL-8040 in the next three to four months, along with top-line Phase 3 data for BL-1040 ... in 2014.

Shares of Galena Biopharma ($GALE) jump after Oppenheimer initiates the oncology-focused biotech at Outperform with a PT of $6.The firm's target implies an upside of 63% from yesterday's close. Analyst Boris Peaker thinks shares could reach $6 in the next 12-18 months. NeuVax's reported Phase I and II data is "encouraging," as is the ~$5B global commercial opportunity for the drug. Peaker places a $6 valuation on NeuVax alone and sees Abstral's "good traction in the initial stages of launch" as added value, given that "it is a competitive fentanyl formulation and will find a clear niche in the market."




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