Mannkind ( MNKD) announced Tuesday that the FDA accepted the company's resubmission of the approval application for its Afrezza inhaled insulin device. The agency's new approval decision deadline is Dec. 29. The Afrezza update prompted @RJPeterson123 to tweet, "Hoping for a Christmas miracle for Mannkind."
Anne S. emails, "We have a long-standing mantra around here. Never bet on weight loss or Alzheimer's drugs. For weight loss, it is a lifestyle drug. The FDA has very, very little to gain from approval (no life saved) and remembers what happened when Fen-Phen was given to the masses over time. As for Alzheimer's, we simply don't know enough about how the disease comes about in the brain. Until we have a better understanding of the disease, we can't make sense of the drugs. It is such a big market with the potential to save lives, research and development gets a little silly." I touched based with a very smart buy-side analyst who was in Hawaii last week for the International Conference on Alzheimer's Disease (ICAD). He happens to be a friend and a source and someone with a darn good stock-picking track record for neuro-psych drug stocks. His boss doesn't allow him to be quoted by name, which is why he remains anonymous here, but that doesn't stop me from quoting him. The biggest buzz at ICAD -- from a Wall Street perspective -- came from a private company, he said. Avid Radiopharmaceuticals presented late-stage data on a radioactive dye that can accurately detect clumps of the protein known as beta amyloid in the brain of Alzheimer's patients. These beta-amyloid "plaques" are thought to play a role in cognitive decline and memory loss of Alzheimer's patients. Right now, the only way to accurately detect beta amyloid in the brain is through an autopsy. Obviously, that's a tad late, so doctors will be very eager to use Avid's dye -- which shows up when patient undergo a non-invasive PET scan -- to get an early indication of beta amyloid plaque formation in patients.
On July 14, Cell Therapeutics ( CTIC) filed a series of Form 4s with the Securities and Exchange Commission disclosing zero-cost stock awards to the company's top executives and all its directors. Approximately 29.5 million free shares were handed out, including 9.96 million shares awarded to CEO James Bianco. The SEC filings by Cell Therapeutics prompted "Regina" to ask via email if the stock awards "have any impact on shareholders." The shares represent potential dilution, so yes, that does impact shareholders, but at this point, these stock awards have not vested and will not vest unless Cell Therapeutics achieves certain corporate performance goals set out last December by the company's board, according to Cell Therapeutics spokesman Dan Eramian. (He was granted about 3 million shares of restricted stock, by the way.) In order for Bianco and his crew to vest their free stock, Cell Therapeutics has until Dec. 31, 2011 to meet one or more of these performance goals: European or U.S. approval of Opaxio; fiscal year sales of $50 million or $100 million; U.S. approval of pixantrone; break-even cash flow in the fourth quarter of 2010; fiscal year earnings greater than 5 cents a share; or achievement of a Cell Therapeutics stock price equal to $2.94.
James W. asks, "How come there's no talk of Gilead Sciences (GILD) as an M&A target? I know there are concerns over patent expirations and some pipeline setbacks, but the market cap at the moment seems to be less than the remaining potential revenues of their AIDS regimens alone -- notwithstanding the Quad, the J&J collaboration and other drugs either here or on the horizon. Is there something an ordinary investor is missing?" It makes financial and strategic sense for Johnson & Johnson to acquire Gilead Sciences. That's not a new or original thought and I have no idea if such a deal would ever happen. Gilead's antiviral research and marketing expertise in HIV and hepatitis B (and to some extent, Hep C) slots in very well with J&J's Tibotec unit. (And as James alludes to, Gilead and Tibotec/J&J are already working together on the HIV drug Btripla.) Given J&J's slowing growth and the highly profitable nature of Gilead's business, an acquisition should be accretive to J&J relatively quickly. Such a deal would be expensive, upwards of $40 billion or more, a lot of money even for J&J. And perhaps J&J believes, as do many Gilead bears, that the company's HIV business shuts down in 2018 when key HIV drug patents expire. If I'm Gilead management today, I probably don't want to sell the company with my stock price as low as it is. That's like admitting defeat. Better to wait for the stock to rebound before considering a sale. While we're discussing Gilead, this week's ugly second-quarter earnings report and the analyst downgrades and price target cuts that quickly followed appear to have set a bottom in the stock. (For now, at least.) Gilead bought back 44 million shares in the second quarter as part of a previously announced share repurchase plan. The buy-side chatter now is whether Gilead will go one step further and announce a tender offer for its own stock. Recall, Biogen Idec ( BIIB) used a tender offer for its common stock in the summer of 2007 to great effect on its stock price.