Keep an Eye on Ligand, Medivation, ChemoCentryx, and Teva Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! Let's check in on three stocks that could make health care headlines this morning -- Ligand Pharmaceuticals (NASDAQ: LGND  ) , Medivation (NASDAQ: MDVN  ) , ChemoCentryx (NASDAQ: CCXI  ) , and Teva Pharmaceutical (NYSE: TEVA  ) .

Ligand boosts top and bottom line guidance
First, keep an eye on Ligand Pharmaceuticals, which just boosted its previous top and bottom line guidance for the fourth quarter and fiscal 2013 due to higher-than-expected sales of Captisol material.

Ligand's business model is built on developing and acquiring assets to assemble a diversified health care portfolio. Captisol is Ligand's technology portfolio, which has been used by large companies like Pfizer and Baxter International to produce FDA approved drugs such as VEND IV and Nexterone, respectively. Captisol and material sales accounted for 52% of the company's top line. The remainder was mostly generated by royalty revenues.

Let's take a quick look at Ligand's revised guidance:

 

Prior Non-GAAP EPS Forecast

New Non-GAAP EPS Forecast

Prior Revenue Forecast

New Revenue Forecast

Q4 2013

$0.22-$0.24

$0.31-$0.32

$11-$12 million

$14.0-$14.5 million

FY 2013

$0.77-$0.79

$0.86-$0.87

$45-$46 million

$48.0-$48.5 million

Source: Wall Street Journal.

That raised guidance across the board is definitely a positive catalyst for the stock, which has already rallied more than 170% over the past 12 months, but the stock could be getting a bit overvalued fundamentally -- it currently trades at nearly 150 times trailing earnings.

Medivation and Astellas test prostate cancer drug on breast cancer
Next up, we should check in on Medivation and Astellas, which just initiated a phase 2 trial for Xtandi as a prospective treatment for ER+ (estrogen receptor positive), PgR+ (progesterone receptor positive), and HER2 (human epidermal growth factor receptor) normal breast cancer.

The new study will test Xtandi, which is best known as one of the three biggest treatments for metastatic prostate cancer along with Johnson & Johnson's Zytiga and Dendreon's Provenge, on a group of 240 postmenopausal women who have received no more than one prior chemotherapy treatment and one prior hormonal treatment.

The idea is to target the androgen receptor, which is expressed in the majority of patients with hormone receptor positive breast cancer. If successful, this could open up a whole new market for Medivation and Astellas' Xtandi beyond prostate cancer, so it is definitely a trial worth keeping an eye on.

GlaxoSmithKline passes on two more of ChemoCentryx's experimental drugs
Investors should also pay attention to a recent development between GlaxoSmithKline (NYSE: GSK  ) and ChemoCentryx, a biotech company focused on the development of oral drugs for autoimmune diseases, inflammatory disorders, and various cancers.

Yesterday, British pharma giant GlaxoSmithKline decided to give up on licensing two of ChemoCentryx's experimental drugs, CCX-168 and CCX-354. CCX-168 is a treatment for a potentially fatal inflammatory condition that affects the kidneys, and CCX-354 is an experimental treatment for rheumatoid arthritis.

The decision to pass on those two drugs follows a similar decision in September to return the rights on an experimental Crohn's disease drug to ChemoCentryx. The collaboration between GSK and ChemoCentryx, which started in 2006, was originally forecast to be worth up to $1.5 billion.

Moving forward, ChemoCentryx CEO Thomas Schall has stated that the development was a positive one, as it allows the company to move forward by itself to gain market approval for its products as soon as possible. The company hopes that CCX-168, which recently showed favorable safety and efficacy data during a phase 2 trial with 26 patients, will win approval as an orphan drug, which would give it seven years of market exclusivity without the need for additional patent protection.

Investors are currently seeing the GSK announcement and the positive phase 2 data for CCX-168 as positive developments for ChemoCentryx, and the stock is rising higher in pre-market trading -- which could be a nice bounce back for a stock that has fallen more than 50% since the beginning of the year.

Teva allows Takeda to commercialize injectable MS treatment in Japan
Teva and Japanese pharmaceutical giant Takeda Pharmaceutical today announced a new agreement that grants Takeda the right to commercialize Teva's glatiramer acetate, an active ingredient, for the use in a new treatment for multiple sclerosis in Japan.

The financial details were not disclosed, but Takeda will submit a new drug application to register glatiramer acetate in Japan, where it is designated as an orphan drug. Injected glatiramer acetate is used to reduce the frequency of relapses in relapsing-remitting MS. It is considered a standard treatment for the indication, and is approved in 55 countries worldwide.

This is more of a positive development for Takeda, which trades on the pink sheets in the U.S., than for Teva, which still faces major problems ahead with the upcoming patent expiration of its blockbuster MS treatment Copaxone, which accounted for 21% of its total revenue last quarter, and the glaring lack of a permanent CEO after Jeremy Levin resigned after only 18 months on the job.

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