Acadia sinks with stock float on deck; Human Genome gains 9%; Isis gains big on data; Ark rises

By Ronda Fears

Memphis, April 27 - Acadia Pharmaceuticals, Inc. was on deck Thursday with a follow-on offering that market sources said was getting pushed despite a steep slump in the stock price ahead of the pricing. The stock decline continued after-hours, as well.

"They're loving this. Look at the volume," said a syndicate source involved with the deal. Joint bookrunners are Banc of America Securities LLC and Lehman Brothers Inc. with Piper Jaffray, JPM Securities and Canaccord Adams as co-managers. She continued, "Give it another week or two and it will regain traction north."

Acadia shares (Nasdaq: ACAD) ended Thursday's regular session lower by 83 cents, or 6.13%, to settle at $12.71 with 835,427 shares traded versus the norm of 663,181. After the close, the stock sank another 46 cents, or 3.62%, to $12.26.

The sellsider said fans of Acadia planning to participate in the new deal also were buying ahead of it as the stock tanked, which she saw as a positive sign that they believe the stock will bounce back strongly once the deal is done. A buysider, however, said there were more sellers in the stock Thursday than buyers, and he was among the sellers, albeit at a profit.

"Ignoring the current situation and telling yourself everything's OK is the neo-American way. Think positive. Create your own reality. Ignore the negative. If things do go bad, it's always someone else's fault. Besides, the nanny will be there to make things right. Yeah, keep whistling past the graveyard. Getting the picture?" he said.

"Acadia is going back to fill the gap at $10. A 20%-plus dilution, 5 million shares on the block, well, you can just sit there like a deer in the headlights or actually take action to protect yourself. If you have profits, I say bank them now, sleep at night, and buy back after the gap is filled. Or I guess you can be a tough guy and ride it out and prove just how faithful an avid ACADer you are. Rah! Rah! Not me."

The San Diego-based biotech is offering just about 5 million shares, including the greenshoe, with proceeds - estimated at $80.9 million at an offering price of $15.16 when the deal launched Monday - earmarked to fund trials for ACP-103 for Parkinson's and ACP-104 for schizophrenia.

Otherwise, secondary activity remained what traders described as stilted in the face of conflicting first-quarter results in the biotech sector. One trader remarked that "speculative money is drying up due to outside worries" but mainstay biotech investors "are just taking a breather before they double down" their bets.

Opposite to ill-boding trial data driving several biotechs lower earlier in the week, there were a couple of biotechs marking sharp gains Thursday on new trial data or the hope of such.

Human Genome up on hope

Human Genome Sciences, Inc. was a big winner as players expect some good news about its phase 2 trial for Albuferon over the weekend at the European Association for the Study of the Liver conference in Vienna.

"It's from what is in the late-breaker section of the meetings, even though the most up-to-date results won't be seen until Saturday, which is when Human Genome will likely post their press release," said a buyside analyst monitoring the event on the EASL web site.

"The 12-week trial accepted for the late-breaker looks promising, in my opinion. It offers better dosing and has a comparable safety/tolerability profile to Pegasys. The safety profile of the lower dose actually looks better than Pegasys from my interpretation of the results."

Human Genome Sciences is developing Albuferon as a potential treatment for chronic hepatitis C. Pegasys is a similar drug developed and marketed by Roche Holdings AG for chronic hepatitis C.

Human Genome shares (Nasdaq: HGSI) gained 92 cents Thursday, or 8.84%, to $11.33.

Rockville, Md.-based Human Genome is scheduled to make a presentation of the full interim data on Sunday at the event in Vienna.

Ark rises on stock float

Speaking of abroad, London-based medical device maker Ark Therapeutics Group plc floated a stock offering, pricing the follow-on deal as well as a secondary offering at a 4.3% premium to the stock's closing price, and that sent the shares soaring well past the offering level on Thursday.

The company raised £27.1 million from the follow-on offering of 31,874,514 shares priced at 85p each, a premium from Wednesday's close of 81.5p.

In trade Thursday, Ark shares (London: AKT) rose 5.5p, or 6.75%, to 87p.

There also was a secondary offering of 2.6 million shares at the same price by Nomura International plc, The Merlin Fund LP, The Merlin Bioscience Fund LP, The Merlin Bioscience Fund GbR, P/S BI Biomedicinsk Venture III and Seppo Ylä-Herttuala.

Ark said proceeds, together with existing cash, will be used to progress clinical programs, to accelerate manufacturing facilities in Kuopio, Finland, to advance its preclinical pipeline and to invest in sales and marketing infrastructure in preparation for the launch of its brain cancer product Cerepro.

"We have made very good progress in the past year and achieved some notable clinical and regulatory milestones with our lead brain cancer product, Cerepro, as well as signing a number of international marketing deals for Kerraboot and announcing encouraging news regarding our other clinical and preclinical products," said Nigel Parker, chief executive of Ark, in a news release.

Kerraboot is a non-pressurized boot-like dressing, or wound management device, for below-knee injuries. The company focuses on gene-based medicine, while at the same time developing related small molecules and a medical devices division.

Evotec bags €18.56 million

In another international deal, Evotec AG said it raised €18,561,888 in the pricing of an equity PIPE that consisted of 5,228,701 shares at €3.55 each.

Based in Hamburg, Germany, Evotec is a pharmaceutical company focused on treatments for Alzheimer's disease, sleep disorders and other diseases of the central nervous system.

The company has partnerships with Curis, Inc., DeveloGen AG, GlaxoSmithKline plc, Celgene Corp., Elixir Pharmaceuticals, Inc. and Novartis AG.

Evotec shares (Frankfurt: EVT) in heavy trade Thursday dropped €0.11, or 2.95%, to €3.62. The stock bobbed around in a band from €3.53 to €3.74, with 5.2 million shares traded versus the norm of 198,737 shares.

Cyclacel to pocket $45.3 million

Cyclacel Pharmaceuticals, Inc. said it has received definitive agreements for a $45,331,500 PIPE transaction, and the stock climbed nearly 10% on the news Thursday.

The company will issue 6.43 million units at $7.05 each to a group of investors including Deerfield Management, Federated Kaufman Fund and Red Abbey Ventures, among others. The units consist of one share and one warrant for 0.4 of a share, the whole of which is exercisable at $7.00 each for seven years.

Cyclacel shares (Nasdaq: CYCC) gained 68 cents on the day, or 9.71%, to close Thursday at $7.68. It opened at $7, where it closed Wednesday, but on the early morning announcement the stock took off on volume of more than double the norm.

Short Hills, N.J.-based Cyclacel, focused on treatments for cancer, has earmarked proceeds to expand development of its three development-stage anticancer products - seliciclib, sapacitabine and CYC116.

Isis higher by 14% on data

Isis Pharmaceuticals, Inc. was another name moving up sharply Thursday after announcing results from a study of its experimental cholesterol drug ISIS 301012, which is an application of antisense technology, also at a technical meeting.

The Carlsbad, Calif.-based company said the study showed the drug reduced atherosclerotic plaques, apoB-100, and circulating inflammatory cytokines in an animal model of atherosclerosis, or hardening of the artery. Rosanne Crooke, director of cardiovascular research at Isis, presented the data at the Arteriosclerosis, Thrombosis and Vascular Biology meeting in Denver.

Isis shares (Nasdaq: ISIS) rocketed up by $1.08, or 14.29%, to $8.64.

"With great upside potential with this new drug, I think it is a great investment. There is a lot of debate about antisense, but I think it is worth having in your biotech portfolio because it could be a winner," said a fund manager out West. "Biotechs are always riskier, more volatile stocks, but the reward can be huge."

Isis said the new data supports a growing body of evidence demonstrating that ISIS 301012 has the potential to treat patients with coronary artery disease. Isis recently reported in a phase 2 trial that the drug produced rapid and prolonged reductions in low density lipoprotein - LDL, or "bad" cholesterol - as well as very low density ipoprotein, total cholesterol and triglyceride levels. By the company's explanation, ISIS 301012 is a second-generation antisense drug that inhibits the expression of apoB-100, a protein critical to the formation and transport of "bad" cholesterol particles involved in heart disease.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.