Moving to your emails. First up, Raji N. "In August, you wrote that Bristol-Myers Squibb ( BMY) would have to raise the takeover offer for ImClone Systems ( IMCL) from $60 to $70 a share. Yet today, ImClone is trading around $60. Why doesn't the market believe that ImClone is worth more money? Have you changed your mind about ImClone?" Raji sent me this email on Tuesday. I wonder how he felt Wednesday when the stock closed at $57.63! I've tempered my view on ImClone because of the latest twists to the story, most notably Bristol's claim that it has rights to the Erbitux follow-up on drug IMC-11F8. That claim, to me, is a game-changer and gives the negotiating edge to Bristol, not ImClone. For those without a RealMoney subscription, this is what I wrote on Sept. 11, minutes after Bristol's CEO made public the letter written to ImClone's Chairman Carl Icahn in which Bristol said it had no intention of raising its $60-a-share bid and claimed rights to IMC-11F8:
"Let me explain a bit more about the importance of BMY's claim to IMC-11F8. As I said, the drug is a fully humanized version of Erbitux, which means that it won't cause the severe allergic reactions that occur in some patients who take Erbitux. Theoretically, IMC-11F8 should also be equally effective. By claiming 100% rights to IMC-11F8, IMCL held an important bargaining chip over BMY. IF IMCL were to be acquired by someone else and they gained control of IMC-11F8, it could conceivably decimate the Erbitux franchise. (Docs would presumably rather use IMC-11F8 than Erbitux.) But if BMY, in fact, does have marketing rights to IMC-11F8, that makes IMCL a lot less attractive to an outside suitor and strengthens BMY's position. Now, clearly, IMCL is going to assert that BMY has no rights to IMC-11F8. That's been their position for some time. Who decides? I guess the courts, ultimately, if it gets that far. But if I were a potential suitor for IMCL, wouldn't I be a bit nervous now that I know that one of the big assets I thought I was buying outright may not be 100% mine after all?"I know that Icahn says he has a mystery pharmaceutical company in his pocket willing to offer $70 a share for ImClone, but c'mon. Given Icahn's shenanigans with Biogen Idec ( BIIB), it's not inconceivable that the dealmaker extraordinaire is simply bluffing in the hopes that Bristol raises the bid. On Tuesday, Bristol's CFO was quoted saying the company could walk away from its ImClone offer. Clearly, there is a lot of posturing and bluster on display here from both sides. At the end of the day, an equitable deal should be struck. Back in August, I
Cory M. writes: "What happened to Sangamo BioSciences ( SGMO)? The company put out great data in diabetic neuropathy but the stock went down on the news. I know there's some skepticism about the company, including from you, but I thought this strong data would have been more convincing." Two problems: The data weren't complete, and Sangamo got caught in a nasty market downdraft. The phase II study enrolled 27 patients with diabetic neuropathy (blocked nerves) affecting their legs. Seventeen patients were treated with Sangamo's drug SB-509, and 10 patients were treated with a placebo. Patients were treated on days 0 and 90, with follow-up through 180 days. Sangamo, however, reported data Monday on just a subset of 16 patients -- 12 given SB-509 and four treated with placebo -- who had blocked sural nerves.
Steven P., ever the optimist, asks, "Can Mannkind ( MNKD) succeed with inhaled insulin where Pfizer ( PFE) and Nektar ( NKTR) failed?" I have a few simple rules about biotech companies, one of which is, "Don't trust a company named after its founder." In this case, Al Mann equals Mannkind equals a no-no. We know that inhaled insulin is technically feasible and FDA approvable because Pfizer and Nektar were successful on both counts with Exubera. But we also know that there isn't a market for inhaled insulin. Exubera flopped commercially, forcing Pfizer to ditch the product. Now, perhaps Mannkind's Technosphere inhaled insulin is superior in some way to Exubera, and the device Mannkind will have patients use to inhale the insulin will be smaller and more convenient than the enormous, bong-like contraption Pfizer and Nektar foisted on diabetics. I have my doubts, enough so that I don't see Mannkind as a worthy place for biotech investing dollars right now.