It was a busy day for the healthcare industry as the biggest risers and fallers came from the same sector. Shares in Therovance (THRX) plummeted on news of the death of some test subjects in trials for its joint venture with GlaxoSmithKline (GSK), Relovair. The day's biggest gainer, meanwhile, was Inhibitex (INHX) on news that it was being purchased by Bristol-Myers (BMY).
Bristol-Myers to Buy Inhibitex
Shares in Inhibitex saw a massive 140 plus percent jump on Monday after news that Bristol-Myers would be purchasing the company at a substantial premium. Bristol-Myers is reported to be offering $26 a share, a premium of over 160 percent and a figure that would value the company at just over $2 billion. The move, which was agreed on late Saturday, comes as Bristol-Myers attempts to acquire new properties as a part of its "string of pearls" strategy. With the patents due to expire on three of its top four drugs in the next three years, Bristol-Myers is acquiring Inhibitex for its INX-189, a chemical compound in Phase II development that has shown potent anti-viral capacity in treating Hepatitis C. Bristol-Myers shares lost just over one percent in early trading.
Theravance Drops on Bad Clinical News
Drugmaker Theravance plummeted more than 30 percent Monday after news of pneumonia-related deaths during Phase III testing for its new drug Relovair. Relovair, developed as a part of a partnership with GlaxoSmithKline, is a lung drug intended to treat chronic obstructive pulmonary disease, or COPD, a market which remains largely untapped. GlaxoSmithKline, which is trying to find new revenue streams as the patent on its big money-maker Advair is set to expire. Relovair is expected to have a considerable advantage in the large market for lung medications due to its more convenient once-a-day dosing, and Glaxo intends to submit the drug for approval in mid-2012. However, while the results of the trial were good enough for submission to the FDA, they did raise serious questions about the drug's effectiveness when some trials showed a statistically insignificant improvement. What's more, the fact that the study also included some pneumonia-related deaths appeared to spook investors. GlaxoSmithKline also suffered a slip, falling over 4 percent in early trading.
Other Big Moves
Among the other big movers on Monday was Idenix Pharmaceuticals (IDIX), which gained over 40 percent on its share value amid news that NS5A inhibitor, IDX719, used in treating Hepatitis C, was being advanced down the development pipeline. Idenix initiated the Phase I clinical trials for the drug, the first part of which will evaluate safety, pharmacokinetics and food effect in 48 healthy volunteers. On the flip side of the coin was IPC The Hospitalist Company, Inc. (IPCM), which saw shares plunge over 30 percent after cutting its full-year projections for 2011 after market close due to low patient volumes.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer