Street Buzzing About New Hepatitis Treatment Developer
(Thomson Reuters ONE) -
Despite a terrible day for the general markets on Thursday, shares of Medgenics
Inc. (AMEX:MDGN) closed strong at $11.00 +1.01, +10.11% on rumors of positive
developments ahead. The stock reached and then surpassed its previous 52-week
high of $10.60 and also traded +1006.24 % its average volume. It closed after
seeing a 12.1% price spike and finishing the day after 648,690 shares traded
hands.
The low-float biotech was a big winners last week after the firm announced that
it had received Orphan Drug Designation from FDA for their INFRADURE Biopump (a
novel technology for the sustained production and delivery of therapeutic
proteins in patients using their own tissue) to Treat Hepatitis D.
Immediately, analysts weighed in, stating that the development may have
transformed the firm into a buy-out candidate given the Hepatitis space's
related acquisition activity; including Gilead Sciences (NASDAQ:GILD) paying $11
billion in cash for Pharmasset and Bristol-Myers Squibb (BMY) snagging Inhibitex
for $2.5 billion in cash. Other key players in the space, including Idenix
Pharmaceuticals (NASDAQ:IDIX), Achillion Pharmaceuticals (NASDAQ:ACHN), Abbott
Laboratories (NYSE:ABT), Vertex Pharmaceuticals (NASDAQ:VRTX) and Merck & Co.
(NYSE:MRK), have seen volatility given that hepatitis viruses, grouped as A, B,
C, and D, are considered a worldwide epidemic and highly contagious.
During our own interview with Andrew L. Pearlman, Ph.D., President and Chief
Executive Officer of Medgenics he indicated his team was focused on making sure
that his firm will continue to build its pipeline (of multiple +billion dollar
market indications for the technology) and add value beyond its current market
cap. He stated cleary that: "This is now the second approval that we`ve gotten
for our technology, for our company and we think it will give a lot more
confidence to would-be partners and institutional investors who may have been
looking for a clear sign from a regulatory agency that we have a straight shot
for an approvable product within a reasonable time."
Credible sources on the street say that pending events-- "Will signal to the
markets Medgenics' commitment to the partnering game plan" and add even more
credibility to the firm as a player which is ready to position themselves more
securely in the pharma partnering space. Buy partnering out each indication
instead of simply selling out the technology engine, the company would certainly
build more value for sharholders as they moved forward."
There is a small short interest (over 55K shares short) in the stock and
positive news early next week could put pressure on those shorts to cover. As
we've seen, given the lack of available shares in the float, the stock could see
another pop shortly.
Smart money remains bullish on MDGN given its path to fast regulatory approval
for treating a incurable condition in a huge medical market, not to mention
progress with its Biopump therapy in anemia, multiple sclerosis, arthritis,
hemophilia, pediatric growth hormone deficiency, obesity, diabetes, and other
chronic diseases.
Disclosure: We are long MDGN
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[HUG#1623269]
Datum: 29.06.2012 - 20:56 Uhr
Sprache: Deutsch
News-ID 161583
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