This Week in Biotech: Merger Mania Continues

M&A activity takes center stage again while two biotechs sizzle with positive clinical updates and another fizzles in a big way.

May 3, 2014 at 1:15PM

With the SPDR S&P Biotech Index up 23% over the trailing-12-month period, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.

M&A Mania ensues
The talk among the health-care sector last week was the monstrous amount of buying, selling, and deal offering going on with big pharma. This week we saw more offers as well as one completed deal.

Let's begin with the one concrete deal that we saw take place between Forest Laboratories and Furiex Pharmaceuticals (UNKNOWN:FURX.DX). The deal, which equals as much as $1.46 billion in value, has Forest purchasing Furiex for $95 per share in cash and $30 in contingent value depending on whether not its lead experimental drug eluxadoline is approved by the Food and Drug Administration. In turn, Forest Labs plans to sell the royalty rights to two therapies that Furiex currently collects revenue on to Royalty Pharma for $415 million. What makes this deal rather odd is that Forest is itself currently in the midst of being acquired by Actavis for more than $25 billion. Actavis gave its thumbs up for the deal and Furiex shareholders are getting a huge premium for a pipeline that I don't personally find to be all that impressive. It's a big win for Furiex shareholders, but the jury is still out for Actavis/Forest, in my opinion.

The offer mill continued to churn out huge developments between Pfizer (NYSE:PFE) and AstraZeneca, with Pfizer on early Friday morning offering up a $106 billion bid -- a 7% increase from its previous bid -- which would have equaled $84 per share. AstraZeneca rejected the takeover offer as inadequate and deemed that its current pipeline would be disrupted by a takeover. Of course, Pfizer would like the opportunity to enjoy the cost synergies of combining it and AstraZeneca's businesses, as well as the potential to move its headquarters overseas to save on taxes. Years from now we could be talking about billions in extra cash flow. For now, though, the deal appears to be as dead as a doornail in the eyes of AstraZeneca.  

Clinically sound
In addition to M&A mania, two other companies managed to dazzle Wall Street with positive clinical results.

On Wednesday evening, Theravance (NASDAQ:THRX) reported positive results from the highest dose of TD-9855 in a mid-stage study for patients with fibromyalgia. According to the press release, the 5 mg dose of TD-9855 did not meet statistical significance for the primary endpoint, but the 20 mg dose provided statistically significant and clinically meaningful improvements in the primary and secondary endpoints relative to the placebo. In the 20 mg dose there was an observed 1.4 point reduction 11-point Numerical Rating Scale used to determine pain compared to a 0.9 point reduction for the placebo (this was the primary endpoint). The secondary endpoint – the Patient Global Impression of Change scale – also demonstrated that improvement favored the TD-9855 treatment arm with 48% versus 32% being described as "very much improved" or "much improved."  Investors should take note, Theravance may wind up being a lot more than just a COPD drug development company.

Yesterday morning, Isis Pharmaceuticals (NASDAQ:IONS) announced its final data from its phase 2 study of ISIS-APOCIIIrx as a monotherapy treatment for patients with familial chylomicronemia syndrome, or FCS. Based on Isis' findings, Isis was able to treat the three FCS patients with baseline triglyceride levels of 1,400 mg/dL or greater with 300 mg of its experimental therapy over 13 weeks and get all of their triglyceride levels below 500 mg/dL. Its interim analysis demonstrated a mean triglyceride reduction of 69%, an 81% mean reduction in APOC-III and APOC-III associated very low-density lipoprotein cholesterol (the bad kind), and a 78% increase in high-density lipoproteins (the good kind). Isis will now move forward with a phase 3 study of the drug which affects some 3,000 to 5,000 people worldwide. While this indication is unlikely to be a huge contributor to the company's top or bottom-line results if approved, it continues to solidify Isis' role as both a collaborator and innovator of a diverse number of in-house products.

A surprisingly bad result
But, as usual, they can't all be winners. Just ask shareholders in Endocyte (NASDAQ:ECYT), who saw their stock implode on Friday after it and partner Merck announced that the independent data safety monitoring board had recommended it stop its phase 3 trial involving vintafolide early for platinum-resistance ovarian cancer due to futility. What makes the failure so confusing is that in March the European equivalent of the FDA's panel recommended the approval of Vynfinit, the EU name for vintafolide, in Europe. Friday's news probably marks the end of the line for a PR ovarian cancer indication in the U.S., but I'd suggest Endocyte may still have life yet. The company is practically trading at its cash value based on proceeds from its share offering in April along with existing cash as of last quarter, and it has six clinical as well as three preclinical studies under way beyond the PR ovarian cancer study. Long story short, this was surprisingly bad news, but the move lower may wind up being a bit of an overreaction, all things considered.

This trillion- dollar industry is what all health-care investors should really be watching
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion dollar industry." And the technology behind is poised to set off one of the most remarkable health care revolutions in decades. The Motley Fool's exclusive research presentation dives into this technology's true potential, and its ability to make life-changing medical solutions never thought possible. To learn how you can invest in this unbelievable new technology, click here now to see our free report.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Isis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers