Amylin plunges 25.79%; Elliot cuts Epicor bid to $7.50; Merrill sets vote for Bank of America merger

By Cristal Cody

New York, Nov. 4 - Wall Street found its second wind on Election Day, with most market watchers citing relief that the uncertainty surrounding the country will end when the ballots are counted.

Some companies also will be glad to put Tuesday behind them.

One of the big losers of the day included Amylin Pharmaceuticals Inc., which lost more than 24% of its share value.

Meanwhile, investors grew bullish on Bank of America Corp. and Merrill Lynch & Co. shares after a shareholders vote to approve the merger was set for December.

Market indexes rose Tuesday with hints of an end-of-year rally ahead.

The Dow Jones Industrial Average rose 305.45, or 3.28%, to 9,625.28.

The S&P 500 index gained 39.45, or 4.08%, to 1,005.75 and the Nasdaq composite index rose 53.79, or 3.12%, to 1,780.12.

Amylin turned away by FDA

Amylin Pharmaceuticals shares plunged 25.79% to close at $7.94 a share in trading Tuesday on the news the U.S. Food and Drug Administration rejected data for an experimental version of its diabetes drug Byetta.

"We are continuing discussions with the FDA regarding these data and various alternatives to enable ... an submission by the end of the first half of 2009," Amylin said in a filing with the U.S. Securities and Exchange Commission on Tuesday.

"If we are required to initiate a new clinical study to demonstrate comparability ... our submission could be delayed beyond the end of the first half of 2009."

Amylin has developed and gained approval for two medicines to treat diabetes, Byetta, or exenatide, and Symlin. The company is developing a long-acting version of a drug called exenatide LAR with Alkermes Inc. and Eli Lilly and Co.

Lilly paid Amylin $125 million last month as part of the capital investment for Amylin to supply the drug, if approved, once a week for sale in the United States.

Eastbourne Capital, an Amylin stockholder with 12.5% of shares, said in a SEC filing on Monday that it plans to talk with the company's management to discuss ways to enhance shareholder value, which could include a sale.

One analyst said Tuesday that the latest news doesn't make the biopharmaceutical company more vulnerable for a takeover.

"There's negative data. It's dropping for a reason," he said of the stock.

Alkermes' shares fell 9.8% to close at $9.11 Tuesday.

Eli Lilly shares closed at $35.15, up 3.35%.

Elliot lowers bid on Epicor

Elliot Associates LP lowered its offer for Epicor Software Corp. to $7.50 a share, down from the original $9.50 a share.

Elliot also extended the offer until Nov. 17 from the initial Nov. 12 expiration date.

Since the first offer didn't turn any heads, it's not likely this one will either, a New York market source told Prospect News.

The second offer from the New York hedge fund values Epicor at about $446.8 million, down from the initial offer of $565.9 million based on the number of outstanding shares on Aug. 1.

The board of directors of the Irvine, Calif.-based company already has recommended stockholders reject Elliot's original offer.

The first offer had a lot of caveats that didn't sit well with Epicor, the market source said.

"I don't think the board is even going to comment on the $7.50 a share," he said. "It's pretty much a non-event for them."

Elliot said in a letter sent Tuesday to Epicor's board that the offer could be increased if the fund can conduct due diligence. The hedge fund and its affiliated funds own 10.2% of Epicor's common stock.

"The board's actions are particular puzzling in light of current economic conditions, Epicor's recently announced double digit year-over-year decline in its organic license revenue growth, and its abysmal financial guidance for the future," Elliott said in the letter.

"Elliott fully intends to continue to pursue an acquisition of Epicor, and we are actively evaluating all courses of action."

Epicor shares closed Tuesday at $6.96, down 6.45%.

The stock fall may be from investors who don't want to wait for a possible sale.

"Don't read a whole lot into that. We think it was probably a hedge fund or associate pulling out of Epicor and thinking there's no chance it's going to go through," the market source said.

Merrill Lynch sets takeover vote

Merrill Lynch & Co. shareholders will vote Dec. 5 on the acquisition by Charlotte, N.C.-based Bank of America Corp., according to a filing with the U.S. Securities and Exchange Commission.

The transaction, valued at about $50 billion, is expected to close in the first quarter.

Investors are taking a liking to the plan.

Merrill Lynch shares rose 5.54% to close at $19.99 a share Tuesday.

Bank of America shares increased 3.9% to close at $24.53 a share.

Mentioned in this article:

Alkermes Inc. Nasdaq: ALKS

Amylin Pharmaceuticals Inc. Nasdaq: AMLN

Bank of America Corp. NYSE: BAC

Eli Lilly & Co. NYSE: LLY

Epicor Software Corp. Nasdaq: EPIC

Merrill Lynch & Co. NYSE: MER

© 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.