|Prolor's Novik again declines comment on takeover speculation|
|By Staff and Wire Reports|
|Monday, 05 March 2012 09:17|
A new report in Bloomberg points to the fact that Prolor rose to $6.04 last week after, California-based competitor Vivus Inc. (Nasdaq:VVUS) won preliminary approval from the FDA for a weight-loss drug similar to one being developed by Prolor. The Nes Ziona, Israel-based company, which starts the final hormone drug study later this year, will begin the first clinical trial for its obesity treatment in early 2013, Novik said.
Shares of Prolor were the second-biggest gainers on the Bloomberg Israel-US 25 Index (ISRA25BN) of the largest New-York traded Israeli companies last week, which lost 1.7 percent to 85.64. The measure has gained 5.4 percent in 2012 outpacing a 1.2 percent increase in Israel’s TA-25 Index.
Prolor -- 21 percent-owned by Philip Frost, chairman of generic drugmaker Teva Pharmaceutical Industries Ltd. (NASDAQ:TEVA) -- may be fully acquired by Teva as its products become more lucrative, according to Raghuram Selvaraju, an equity analyst at Morgan Joseph TriArtisan who covers Israeli biotechnology companies.
‘Teva Acquisition Target’
U.S.-traded shares of Prolor have gained 42 percent since Teva said on Jan. 2 that Jeremy Levin, who emphasized partnerships and smaller acquisitions as an executive at drugmaker Bristol-Myers Squibb Co., will replace Shlomo Yanai as Teva’s chief executive officer in May.
“Prolor as a Teva acquisition target has been steadily increasing ever since Jeremy Levin was hired,” Selvaraju said. “Teva’s reliance on generics as a business model hasn’t served it well of late, so because Jeremy is very focused on innovative medications, he might be interested in acquiring a company like Prolor.”
Novik declined to comment on takeover speculation. Teva spokeswoman Denise Bradley, didn’t respond to phone messages and an e-mail requesting comment.
Prolor fell 9 percent on Feb. 21 after a retail investor sold almost 250,000 shares in one transaction to an institutional investor, prompting speculation that “an insider” was selling out of the stock, Novik said. The concern sparked Prolor’s worst weekly decline since the week ended Nov. 4.
Shares began to rebound on Feb. 24, a day after Vivus surged 78 percent following a vote by an FDA regulatory panel to back the company’s pill Qnexa, moving it a step closer to gaining U.S. approval as the first new obesity treatment in 13 years.
“We’ve seen for the past couple years, biotech investors moving the whole sector up or down based on a very significant event,” Novik said. “Our stock barely moved that day, but then maybe investors start scouting around and realize that they should be giving us some credit for that as well.”
Prolor shares gained 1.9 percent on March 2, the fourth day of increases. Prolor stock traded in Israel rose 1.6 percent on March 1 to close at 22.22 shekels, the equivalent of $5.84. The shares advanced 3.2 percent to 22.94 shekels, or the equivalent of $6.03, at the close in Tel Aviv today.