DOV rises; ImmunoGen tumbles; OccuLogix, TLC-Vision plunge; Sirna spikes; CryoCor crumbles

By Ronda Fears

Memphis, Feb. 3 - It was a relatively light session Friday marked with "dribs and drabs" for the most part, traders said, with the major biotech indexes lower. There were spikes and fumbles in several particular names moving in the last session ahead of the Seattle and Pittsburgh face-off at the Super Bowl. But overall, traders were not overly concerned.

"It was thin today," said one sellsider. "A lot of people were placing bets elsewhere (like the Super Bowl) wink, wink. You can't take a lot to heart on a day like today."

There were several moves - in both directions - that turned heads, nonetheless.

DOV Pharmaceuticals, Inc. was a big gainer after announcing late Thursday that it has completed enrollment in a phase 3 trial for the Hackensack, N.J.-based biotech's lower back pain drug bicifadine. DOV shares (Nasdaq: DOVP) shot up $1.47 on the news, or 9.44%, to $17.05. The credit was active, too, with the DOV 2.5% convertibles trading at 90.5 early in the session when the stock was just $15.50, where it opened.

Sirna Therapeutics, Inc. also rocketed higher as players got wind of Heartland Advisors, Inc. upping its stake in the San Francisco-based biotech recently. Heartland filed a 13G report at the Securities and Exchange Commission on Friday, showing it had boosted its holding in Sirna to 13.6%, and traders said that sparked additional buying.

"People are buying the hell out of it," one sellside trader remarked about the action in Sirna.

Sirna is focused on RNA interference technology for various diseases, including age-related macular degeneration, hepatitis B and C, dermatology, asthma, Huntington's disease, diabetes and cancer. Sirna shares (Nasdaq: RNAI) gained 31 cents, or 7.06%, to close at $4.70.

OccuLogix, Inc.'s news didn't hurt Sirna, either, the trader added. Sirna has an agreement with Allergan, Inc. to develop Sirna-027, a phase 1 drug to treat age-related macular degeneration.

OccuLogix plunges

OccuLogix, dubbed the REO Speedwagon by traders because of its ticker, spun out and crashed in a ball of fire Friday as players took it on the run, to borrow from the lyrics and title of an REO classic hit, in reaction to news of a failed late-stage trial for its treatment of the dry form of age-related macular degeneration.

Shares of OccuLogix (Nasdaq: RHEO) plummeted in pre-market action Friday by more than 72% to $3.54 and then opened at $3.75 versus Thursday's close of $12.75.

"We call it RHEO Speedwagon - taking it on the run, baby," remarked a sellside market source.

OccuLogix majority owner TLC-Vision Corp., a St. Louis-based eye care services provider with a 51% equity stake, went along for the ride. TLC-Vision shares (Nasdaq: TLCV) stumbled $2.03, or 25.6%, to $5.90.

Trader in NY: "All of these companies that have one product medical cures are a major risk. more often that not, these miracle products don't work. Perhaps this company can change the formulation to improve it; maybe they can't. This was a boom or bust stock...anyone investing in this company should know that."

Toronto-based OccuLogix said the phase 3 trial of MIRA-1 missed its primary endpoint, and it now plans to evaluate the implications of the data on its application for marketing approval for its RHEO system from the Food and Drug Administration.

OSI Pharma higher, Pfizer off

OSI Pharmaceuticals, Inc. and partner Pfizer, Inc. with Macugen - another treatment for the wet form of age-related macular degeneration - are considered the leaders in that race, however. The OccuLogix news, though, was not a factor in the moves of those stocks, a buyside analyst said, as apparently there is no connection between dry and wet AMD.

But OSI rose again Friday on the heels of announcing Thursday with Pfizer that the European Commission has granted marketing authorization for Macugen. Macugen has been approved by regulatory authorities in the United States, Canada, Brazil, Argentina, Peru, Pakistan and the Philippines, with filings submitted in 15 other countries including Australia, Switzerland and Mexico.

Melville, N.Y.-based OSI develops drugs for the treatment of cancer, eye diseases and diabetes, having gained the eye focus with its unpopular acquisition of Eyetech Pharmaceuticals Inc. last year.

OSI shares (Nasdaq: OSIP) on Friday gained 30 cents, or 1.07%, to $28.37. However, Pfizer shares (NYSE: PFE) lost 50 cents on the day, or 1.94%, to $25.28.

ImmunoGen falls on wider loss

ImmunoGen, Inc. was steered lower Friday amid a light sell-off after reporting late Thursday a wider fiscal second-quarter net loss.

For the quarter ended Dec. 31, the Cambridge, Mass.-based company reported a net loss of $3.5 million, or 9 cents per diluted share, compared with a net loss of $2.2 million, or 5 cents per diluted share, a year earlier. Revenues for the quarter dropped to $6.6 million from $9 million.

ImmunoGen shares (Nasdaq: IMGN) settled Friday off 28 cents, or 6.01%, at $4.38 amid light volume.

A sellside trader said that the stock was propped up to some extent by news in late January that it had gotten a $2 million milestone payment from partner Genentech, Inc. on the submission of an Investigational New Drug application for trastuzumab-DM1. Trastuzumab-DM1 comprises ImmunoGen's cell-killing agent, DM1, linked to Genentech's therapeutic antibody, trastuzumab, which targets over-expression of the HER2 protein in breast cancer.

ImmunoGen develops targeted anticancer therapeutics using its Tumor-Activated Prodrug technology.

"I feel that someday this stock may head up big time; however, until that time, it will be a gentle herding of the sheep this way and that way," said another sellside market source. "I honestly cannot recommend a buy at this point."

CryoCor off on FDA rejection

CryoCor, Inc., which went public just seven months ago, plunged big on Friday on news that the FDA had rejected its application for its new heart device.

In June the San Diego-based medical device company priced its upsized initial public offering at $11 per share in an open Dutch auction IPO managed by bookrunner W.R. Hambrecht - at the low end of the indicative range of $11 to $13, which had been bumped up from $10 to $14. It was boosted to 3.7 million shares from 3 million shares.

CryoCor shares (Nasdaq: CRYO) plummeted $1.84, or 36.87%, to settle at $3.15 on Friday.

The company said the FDA informed it that its Pre-Market Approval application for the treatment of atrial flutter using the Cardiac Cryoablation System is not approvable at present. In a letter, the FDA stated the product's success rate for the treatment of atrial flutter did not meet its chronic efficacy criteria, according to a company news release.

CryoCor said it has enrolled 103 patients in more than 20 centers in a pivotal trial for the device and is proceeding in that direction.

"We continue to believe that the data generated by our pivotal trial support the safety and efficacy of the product for the treatment of atrial flutter," said Greg Ayers, chief executive of CryoCor, in a news release. "We are reviewing and evaluating the PMA data, and expect to continue our constructive discussions with the FDA to determine the appropriate path going forward."

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