Wednesday, February 23, 2011
SIGA Spikes On Contract Possibilities, Accentia Raising Money, Apricus On The Move, Clinical Data - A Deal That Only Forest Labs Loves
SIGA spiked by twenty percent on Tuesday when news hit the wires that the Biomedical Advanced Research and Development Authority (BARDA) had commenced a new procurement request for a smallpox vaccine to fill government stockpiles, a contract awarded to Siga last year.
The contract was derailed, however, when rival Chimerix filed a complaint stating that Siga did not meet the 'small business' requirements of the contract.
Chimerix essentially won the appeal, but after receiving government money to advance its own vaccine, it looks like this new procurement request by BARDA will all but guarantee Siga receives the first portion of the contract, which will be for 1.2 million doses of the vaccine.
If the Chimerix vaccine is ready by the time the contract moves into the next stage, which calls for up to 12 million doses, then it's possible that BARDA may award some of the contract to Chimerix.
SIGA's spike on Tuesday shows that the market believes that the contract is coming Siga's way, but although there could be some additional significant upside if Siga gets the bulk of the entire contract, a buy here looks a little too much like a 'chase' play for me.
Still plenty of long term potential, however, so a pullback would be opportune.
Disclosure: No position.
ABPI: Accentia Biopharmaceuticals, whose majority-owned subsidiary Biovest International is devloping the cancer vaccine BiovaxID, announced plans on Tuesday to raise up to five million dollars through a registered direct offering.
The Accentia stock price dropped by over ten percent on the news.
The money raised will go towards creating working capital, general corporate purposes - which usually means business lunches at Hooters, and to pay down debt.
Generally I consider Biovest the better buy between these two, but with Accentia now beaten down to a market cap of less than half that of Biovest's, ABPI is actually looking like the buy with the more upside right now. Being the majority owner, Accentia will stand to benefit from BiovaxID and Revimmune as well, if either product ever goes anywhere, where Biovest is relying on Biovax at the current time.
The market cap says it all, for the time being, I'd take a look at ABPI as well as BVTI as a BiovaxID play.
Keep in mind, both of these companies are highly risky, and Biovest has been regurgitating results of the same Phase III trial for years now.
Disclosure: No positions.
APRI: Apricus Biosciences continued on its run to open the shortened trading week, with shares touching as high as $5.39 on Tuesday before settling just below the five dollar mark at the close.
Volume was up by more than five times the daily average, and it looks like this company with a plethora of potential in its pipeline may be getting noticed by the big players, who should still consider the current market cap as well worthy of significant upside.
Increased volume and increased price could lead to some increased good times in the future for shareholders.
The days that this company slips below the radar are limited.
Disclosure: Long APRI.
CLDA: Clinical Data moved in the opposite direction of Apricus on Tuesday, closing down over a couple of bucks after a buyout was announced that made only Forest Laboratories happy.
After numerous big pharma player were discussed as possible acquiring companies when rumors of a Clinical Data buyout were swirling, it turned out being Clinical Data that won the prize, and for a discounted price, to boot.
Generally, buyouts come at a premium; it's rare that you see one come for a discount to where the stock of the acquired company is trading, which is why this particular purchase has raised some suspicious eyebrows.
Does somebody know something that we don't?
For VFC's full response to the buyout, CLICK HERE.
Dislcosure: No position.