The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monthly Archives: April 2013

Monday Deal Review: April 29, 2013

Welcome to your Monday Biotech Deal Review for April 29, 2013! This week saw Ergoresearch and Amorfix close their previously announced private offerings. Trimel, meanwhile, has raised $40 million from their public offering of 50,000,000 common shares. On the acquisition front, Valeant received approval from Uklraine’s anti-monopoly authority, after extending the deadline for their tender offer for Obagi, which has now closed.  Get the details on these key transactions, as well as the rest of the week’s major news, by clicking through!

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Friday Science Review: April 26, 2013

Inflammatory bowel diseases (IBD), such as Crohn’s disease and ulcerative colitis, are autoimmune disorders in which persistent bowel inflammation leads to physical damage of the intestinal tract. Research out of the Inflammation Research Network at the University of Calgary, and published in the Proceedings of the National Academy of Sciences, offers a cool novel target for the treatment of IBD. Just like we have receptors that signal heat, evident when we get a hot or burning sensation when eating a chili pepper, we also have receptors that signal cold, which can be activated by compounds such as menthol. The researchers found that a receptor that signals cold (TRPM8) is expressed more highly in colon samples from humans with Crohn’s disease than in samples from those that do not have IBD. This finding suggests that the TRPM8 receptor is up-regulated in inflamed tissue in an attempt to cool it, similar to how controlled cooling is used to treat sites of traumatic injury.

To investigate the potential of the TRPM8 receptor as a target for inflammation reduction, the researchers performed experiments in mice in which colitis had been induced. Mice with induced colitis expressed the TRPM8 receptor more highly in their colon than mice that did not have induced colitis. The mice with induced colitis also had high levels of cytokines, signalling molecules that can promote inflammation, in their colon; activating the TRPM8 receptor with a molecule called icilin reduced these cytokine levels to normal. Activation of the TRPM8 receptor in mice with induced colitis also decreased the release of a pro-inflammatory neuropeptide in the gut, and, most importantly, limited the amount of physical damage that occurred to the colon. These findings characterize the TRPM8 receptor as an anti-inflammatory receptor, and highlight its potential as a target for therapeutics directed at reducing inflammation in IBD and other chronic inflammatory diseases.

Valuation and other biotech mysteries – Part 24: Event-Based Trading

[Ed. This is the twenty-fourth part in Wayne's series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series. 

As with all commentary on this blog, the opinions expressed herein are the author’s own and are not to be construed as investment advice. The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog and may buy, sell or hold such securities at any time. Past share price performance may not be an indicator of future share price performance. This blog and its contents do not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

Wayne Schnarr - seriousEvent-based trading is actually a very common investment strategy. For public companies in many industrial sectors, the key events are the quarterly and annual financial results. The timing of these announcements is regulated (no later than x days after period end) and, if the release date is not announced by the company, investors can approximate the short period within which the financial results will be released. Trading strategies are based on actual and anticipated shorter term share price movement and not necessarily on the longer term prospects for a product or company.

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Monday Deal Review: April 22, 2013

Welcome to your Monday Biotech Deal Review for April 22, 2013! Aeterna Zentaris has had a busy two weeks on the commercial front, signing agreements with Merck and Ergomed.  However, there was a lot more action as well.  Hit the break to catch up on the week’s major biotech news.   Read more of this post

Friday Science Review: April 19, 2013

Author’s note: I will be taking over writing duties from John Holyoake for the Friday Science Review. If you wish to know more about me, you can find my short bio on our contributors page – http://crossborderbiotech.ca/about/
 

Anxiety disorders are becoming increasingly prevalent in our society, and are highly detrimental to an individual’s well being, both physically and mentally. Children with autism spectrum disorder (ASD) are particularly susceptible to anxiety disorders, but their deficits in communication often make it difficult for them to express feelings of anxiousness. Being unable to express these feelings may lead to an exacerbated anxiety response in children with ASD, because they are often exceedingly aware of their surroundings and may become more socially withdrawn. A study published in PLoS One led by Dr. Azadeh Kushki at the Holland Bloorview Kids Rehabilitation Centre in Toronto sought to address this problem by determining a physiological marker that signals anxiety in children with ASD, which would allow for improvement in their care.

Children with ASD and typically developing children performed an anxiety-inducing task while activity of the autonomic nervous system, the part of our nervous system that unconsciously controls visceral functions, was evaluated using three different measures. The researchers found that two of these measures, heart rate and perspiration, were elevated even at rest in children with ASD, whereas the third measure, skin temperature, was comparable at rest between children with ASD and typically developing children. However, during the anxiety-inducing task the skin temperature of children with ASD increased, whereas the skin temperature of typically developing children decreased, the normal response during stress.

The results of this study offer three important findings. First, the observation that heart rate and perspiration are elevated at rest in children with ASD supports previous reports that these children have elevated generalized anxiety. Second, the difference in changes in skin temperature between children with ASD and typically developing children observed during the stressful task offer a potential non-invasive measure of anxiety in children with ASD. Finally, the generalized difference in visceral functions observed between children with ASD and typically developing children indicates that children with ASD experience inappropriate regulation of their autonomic nervous system, specifically over-activity in the division of the autonomic nervous system that controls stress responses. This final finding warrants further investigation in order to understand whether inappropriate regulation of the autonomic nervous system contributes to increased generalized anxiety in children with ASD, or if it simply accompanies general anxiety caused by other characteristics of the disorder.

Positive Share Price Performance in Q1 2013 for the Canadian Healthcare Sector (Part 2)

Wayne Schnarr - seriousIn this blog, I will focus on the Canadian public healthcare companies with share prices on December 31, 2012 between $0.10 and $0.99 (53 companies).

  • Advancers outnumbered decliners by 28 to 25
  • Average and median share price changes were 11% and 0%, respectively
  • No company had a share price decline of more than 40%
  • Eight companies had share price increases of 40% or more
    • Northstar Healthcare (258%) – the share price had been slowly increasing from a bottom reached in November 2012, but no single event could account for the Q1 increase. It was probably a combination of an equity financing, new executive appointments, new surgeons utilizing the surgery center and good Q4 financial results.
    • Stellar Biotechnologies (129%) – the Stellar share price steadily climbed from a November 2012 low. Stellar made preclinical and manufacturing progress with its immune-stimulating protein, KLH, and completed two private placements.
    • SQI Diagnostics (73%) – at the risk of repeating myself, this share price climbed steadily from a December 2012 low. The major product announcement in Q1 was the rapid development of a Multiplex Heparin Immunogenicity Assay with partner Alorithme Pharma. SQI also announced that it had established a special committee to review strategic alternatives.
    • Adherex Technologies (60%) – following its extraordinary Q4 share price performance, based on expectation and then release of preliminary Phase 2 eniluracil data, Adherex announced in Q1 that enrolment was complete and top line data would be released in either Q2 or Q3 2013.
    • CRH Medical (59%) – another company whose share price climbed steadily from a December 2012 low, based probably on expectation and then announcement of increased revenues and profitability.
    • ProMetic Life Sciences (47%) – the ProMetic share price climb started in early October 2012 with the announcement of agreements with Shenzhen Hepalink Pharmaceutical (China), including a substantial equity investment. This investment was completed early in Q1, followed by U.S. FDA approval of Octapharma’s Octaplas (a ProMetic resin is used in its manufacture).
    • Theralase Technologies (46%) – the Theralase share price bottomed in December 2012 and the Q1 increase has been volatile on low trading volume.
    • BioSyent (45%) – this share price has been climbing for almost two years now, probably on increasing sales and profitability.

The first 7 of these companies have moved up from share prices which were not only 2012 lows, but were all-time lows in 5 cases and 30-month lows in the other 2 cases. These companies come from all four of my product / service groupings: therapeutics, diagnostics & devices, services, and other healthcare products & services. The probable triggers for the share price movements include financial results, product data, partnerships and equity financings.

[The opinions expressed herein are the author’s own and are not to be construed as investment advice. The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog and may buy, sell or hold such securities at any time. Past share price performance may not be an indicator of future share price performance. This blog and its contents do not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

Positive Share Price Performance in Q1 2013 for the Canadian Healthcare Sector (Part 1)

Wayne Schnarr - seriousIn order to assess share price performance among the Canadian public healthcare companies, I have selected a portfolio of 118 companies for the 2013 assessment. The portfolio has been split into three parts according to the closing share price on December 31, 2012: $1.00 or more (38 companies); $0.10 to $0.99 (53 companies); and less than $0.10 (27 companies).

In this blog, I am going to comment on the Q1 performance of the first group of companies with share prices of $1.00 or more to start 2013 (a subsequent blog will comment on the other two groups of companies in the sector).

• Advancers outnumbered decliners by 24 to 14

• Average and median share price increases were 12% and 3%, respectively

• Six companies had share price increases of 40% or more (3 companies in each of the Therapeutics and Devices & Diagnostics groups)

• Response Biomedical (227%): the share price increase was probably triggered by two new distribution agreements, the first on January 3 with Laboratory Supply Company, Inc. and the second on January 24 with Fisher HealthCare, part of Thermo Fisher Scientific

• Resverlogix (71%): the expectation of data from the Phase 2b ASSURE clinical trial was probably the key trigger for this share price

• TearLab (71%): although listed on the TSX, this company is virtually unknown in Canada and almost all trading occurs on NASDAQ; share price movement in Q1 2013 appears to be a continuation of a product sales-based bounce from a bottom in Q4 2011

• NeoVasc (63%): continued share price momentum also appears to be a key for this stock, which bounced off a September 2011 bottom and, starting September 2011, increasing sales appear to be moving it off a share price plateau

• Cangene (57%): the base for the Q1 movement may have been good financial results reported in December 2012, followed by approval of two products, VARIZIG and BAT, by the U.S. FDA in Q1 2013

• Cipher Pharmaceuticals (41%): Cipher had the largest share price increase in this group in 2012 at 291%; the key event in Q1 2013 was probably the release of 2012 financial results, which showed net income of $2.5 million ($0.10 per share) and a cash balance of $15.8 million at December 31, 2012

• One company had a share price decline of more than 40%

• Trimel Pharmaceuticals (-59%): the decline mostly occurred after the announcement on March 20 of a proposed equity financing

[The opinions expressed herein are the author’s own and are not to be construed as investment advice. The author and his immediate family members may have long or short positions in the shares of some companies mentioned in or assessed during the preparation of this blog and may buy, sell or hold such securities at any time. Past share price performance may not be an indicator of future share price performance. This blog and its contents do not consider the investment objectives, financial situation or particular needs of any particular person. Investors should obtain professional advice based on their own individual circumstances before making an investment decision.]

Monday Deal Review: April 8, 2013

Welcome to your Monday Biotech Deal Review for April 8, 2013! After a hiatus last week due to the holiday, this week we have a lot of activity to cover. Valeant, in particular has been quite busy, being forced to up their bid for Obagi to $24.00 in response to interest from Germany’s Merz Pharma Group. In addition, Valeant’s latest bid is already 70 percent more than Obagi’s average 20-day stock price before the takeover fight began, the highest premium for a U.S. drug-industry deal in four years, according to data compiled by Bloomberg. Further, the Royal Bank fo Canada has said Valeant could be willing to pay as much as $28 a share to top any new offer from Merz, pushing the premium to as high as 99 percent. Valeant has also begun an unrelated note exchange, and has separately engaged a generic manufacturer with a license agreement after Mylan’s regulatory approval of their own anti-viral acyclovir-containing Zovirax® ointment equivalent.

In other news, Stem Cell Therepuetics has signed their merger agreement with Trillium, based on negotiations with Trillium’s debentureholders. There is much more to cover, so follow the break to get up to date on the latest and biggest biotech stories.

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