Healthcare Review: Celgene, Puma Biotechnology, CombiMatrix, McKesson, Oculus Innovative Sciences Print E-mail
By Staff and Wire Reports   
Thursday, 05 December 2013 14:52
U.S. stocks edged lower on Thursday after a round of mixed economic data left traders guessing how soon the Federal Reserve would begin to wind down an asset-purchase program that has helped equities rally. Gross domestic product grew at an annualized rate of 3.6 percent in the third quarter, the fastest pace since the first quarter of 2012, compared with the 2.8 percent pace reported earlier. Economists polled by Reuters had expected growth would be revised up to 3.0 percent. But strong inventory accumulation in the face of sluggish domestic demand means businesses will need to draw down on stocks, which will weigh on GDP growth this quarter. The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, however, a hopeful sign for the labor market's recovery.

Shares of Celgene ($CELG) are moving notably higher in morning trading. Likely behind the move is UBS, where analyst Matthew Roden has upgraded the stock to Buy from Neutral. "We find CELG compares favorably to other names in healthcare and the broader markets on the basis of EPS growth (26% vs 16% HC and 13% S&P500), and operating margin (49% vs 13% and 16% in Q3 2013, and 60% achievable for CELG by 2017)," Roden notes. Price target is $200.

Puma Biotechnology ($PBYI) rallies 20% as investors appear pleased with top-line data from a Phase 2 study of neratinib in breast cancer (data released Wednesday evening). BofA has lifted the price target on the shares to $87 from $71, saying "much awaited I-SPY2 top-line results show PBYI's next generation HER2 kinase inhibitor is superior to Herceptin in the neoadjuvant breast cancer setting in a Taxol containing regimen." Meanwhile, FierceBiotech's John Carroll calls the study "anything but traditional" in a story that carries the rather colorful headline, "I-SPY a controversy over Puma's positive Phase 2 test of neratinib."

CombiMatrix ($CBMX) soars 38% after the company says the American College of Obstetricians and Gynecologists is now recommending chromosomal microarray analysis as the "first-line genetic test in pregnancies showing fetal abnormalities on an ultrasound screen." Further, CBMX says the ACOG's "guidelines also indicate that microarray testing is recommended as the preferred genetic test to help identify the cause of death in stillbirths and intrauterine fetal demise when further cytogenetic analysis is desired."

McKesson ($MCK) has launched a tender offer to buy the outstanding shares of German peer Celesio as the U.S. drugs distributor attempts to prevent hedge fund Elliott International from blocking the deal. McKesson has made its offer conditional on obtaining at least 75% of Celesio's shares, including those from two convertible bonds. When taking the debt into account, Elliot owns 21.05% of Celesius. McKesson has already agreed to buy 50.01% of Celesio from diversified holding company Franz Haniel & Cie. The total is worth $8.3B.

Oculus Innovative Sciences ($OCLS) is trading down by double-digits on the day, although it's probably safe to say that no one is complaining after Wednesday's 107% gain.

Behind today's weakness looks to be a $2.2M offering which includes 550K shares of common at $4/share.




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