Healthcare Review: Conatus Pharmaceuticals, Biolase, Ariad Pharmaceuticals, Organovo, Arena Print E-mail
By Staff and Wire Reports   
Thursday, 12 June 2014 12:54
U.S. stocks fell on Thursday after a round of disappointing economic data on consumers and the labor market, though energy shares were sharply higher as the price of crude oil spiked. Retail sales rose 0.3 percent in May, half the growth rate that had been forecast, while Americans' new claims for unemployment benefits unexpectedly rose last week.

Although traders are taking profits today, nano cap Conatus Pharmaceuticals ($CNAT) looks like it may ride the rising tide of investor enthusiasm for hepatitis drugs led by the wildly successful launch of Gilead's ($GILD +0.2%) Hep C treatment Sovaldi. Yesterday, shares popped 57% on a 19-fold surge in volume. The company's lead product is emricasan, a orally-active caspase protease inhibitor designed to reduce the activity of enzymes the mediate inflammation and apoptosis (cell death). The company believes it has the potential to interrupt the progression of liver disease. Four Phase 2 clinical trials are underway to assess its safety and efficacy in acute-on-chronic liver failure, chronic liver failure, post-liver transplant HCV clearance with unresolved fibrosis and nonalcoholic steatohepatitis.

Biolase ($BIOL) amends its credit agreement with Comerica Bank and eliminates the non-compliance issues of minimum liquidity ratio and non-payment in full of obligations on June 1. The maturity date of the Master Revolving Note has been extended to August 1, 2014 with an increase in margin. The company had to pay a $30K fee to Comerica to do this. Half of the fee may be waived if Biolase repays its outstanding debt prior to August 1.

Ariad Pharmaceuticals ($ARIA) increases its debt offering to qualified institutional investors to $200M aggregate principal amount. The 3.625% convertible senior notes due 2019 will be sold via private placement. Underwriters over-allotment is $30M aggregate principal amount. The notes are convertible at $12/share. Closing date is June 17.

Organovo ($ONVO) FY14 Revenues: collaborations/grants: $0.4M; product: $0; SG&A expenses: $13.1M; R&D expenses: $8M; net loss: ($25.8M); loss/share: ($0.35); CF Ops: ($15.6M); cash & equivalents: $48.2M.YOY comparisons are not included because management chose to not to disclose FY13 results. In the income and cash flow statements, it lists results for FY14, FY12 and FY11 but not FY13. Fiscal Q4's results aren't listed either, just Q413 vs Q412.

During a CNBC Fast Money appearance, Arena ($ARNA) CEO Jack Lief was tight-lipped about rumors Belviq partner Eisai ($ESALY) is interested in acquiring his company. Investors trying to read between the lines see reasons to be hopeful. Lief also mentioned Belviq prescriptions are seeing week/week growth.

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