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Biotech Stock Mailbag: Discovery Labs

Earth to Capetola: Resign in disgrace and let the board sell the company. You've hurt shareholders enough already.

Carlton A. writes, "Is Micromet (MITI) the next antibody company to be bought out now that Bristol-Myers Squibb (BMY) bought Medarex (MEDX)?"

I received a bunch of emails similar to this one right after Bristol announced its $2.1 billion acquisition of Medarex on July 23.

The thinking goes something like this: Companies like Medarex and Micromet that possess biologic antibody technology are in short supply and in demand by larger drug companies. With Medarex now spoken for, it's more likely that a Bristol competitor makes a takeout play for Micromet.

Sure enough, Micromet's stock price moved slightly higher on the speculation and the company used the new investor interest to raise $70 million in a follow-on stock offering priced Wednesday night.

I don't know if Micromet is, or is not, an imminent takeover candidate. The company owns a novel and interesting antibody technology platform. I wrote about interim data from a phase II study of the company's lead drug blinatumomab in June.

Last March, AstraZeneca (AZN) returned North American rights for blinatumomab to Micromet, although AstraZeneca continued to manufacture the drug for Microment and retained a one-time option to reacquire rights to the drug upon its first regulatory approval.

However, Micromet is reportedly buying back AstraZeneca's remaining option on blinatumomab for $6 million, according to an investor who was briefed by Micromet during meetings this week tied to the follow-on offering. Furthermore, AstraZeneca will no longer manufacture the drug for Micromet, which is now contemplating plans to build its own facility to make the drug.
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