Biota Holding (BTA) To Merge with Nabi Biopharmaceuticals And List

Biota Holdings Limited focuses on the research and development of new human drugs for the treatment of viral respiratory diseases.

Biota’s marketed products are used for the treatment of influenza along with an influenza diagnostic test kit.  The Company is also developing products for the treatment of RSV and rhinovirus.

Small Cap Biota Holding announced that it plans to merge with Nabi Biopharmaceuticals to form a combined company to be listed on Nasdaq.

Chairman Jim Fox said “We believe this is a necessary step to increase our options for the development and commercialization of our product portfolio and will ultimately improve the recognition of the underlying value of our product portfolio for our shareholders.”

Under the merger Biota shareholders will own about 74% of new company, whilst Nabi will own the remaining 26%.

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ResMed (ASX:RMD) is a leading developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders such as sleep apnoea.

Today RMD announced a 12% increase in 1Q11 revenue to $314.8 million. However net profit was down 11% to $50.5 million.

Although the result was affected by adverse exchange rate movements, RMD was also hit by a weak 1% increase in flow generator sales.

The sales result missed analyst estimates, causing it to become the worst performer in today’s share market action.

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Mesoblast (ASX:MSB) is a world leader in the development, manufacture and commercialisation of biologic products in the broad field of regenerative medicine.

MSB has the worldwide exclusive rights to a series of patents and technologies developed over more than 10 years relating to the identification, extraction, culture and uses of adult Mesenchymal Precursor Cells (MPCs).

MSB’s stock has been one of the hot stocks since the start of the year on market excitement over the therapeutic power of MPCs.

A unique business

The commercialisation of MPCs allows adult stem cells to be extracted from the bone marrow of donors, grown into therapeutic quantities and administered to non-related patients.

MSB’s lead products will target cardiovascular conditions, diabetes, inflammatory conditions of lungs and joints, eye diseases, bone marrow cancers, bone fractures, cartilage degeneration and musculoskeletal conditions.

The company aims to generate a series of high margin, off-the-shelf adult stem cell products that are obtained from a single donor, commercially expanded and frozen, and subsequently used in potentially thousands of unrelated, or allogeneic, recipients at the time and place of need.

Bone marrow approval

Mesoblast recently received approval from US authorities to begin an advanced trial of a treatment that could boost the number of bone marrow transplants for patients who cannot find a matched donor.

Following the approval, MSB has commenced the Phase III trial for bone marrow regeneration in patients with blood cancers.

MSB aims to produce a product that can be used in bone marrow transplants where a perfectly matched donor cannot be found.

Hearty hopes

Another key driver for MSB will be the results of its Phase II congestive heart failure trials in November.

Clinical results have thus far been encouraging, and if the full results turn out to be positive, MSB is likely to request a Phase III trial from the US Food and Drug Administration (FDA).

We believe a positive Phase II result will help deliver a significant jolt to MSB’s share price, as it moves the group closer to receiving regulatory approval to market its product.

Moreover, given the large number of reported heart problems in the US, Phase III approval can open up a huge market for MSB.

The Lonza and short of it

On 27 September, MSB announced an alliance with Swiss-based Lonza Group for the clinical and commercial production of its MPC product.

Under the deal, Lonza will supply MSB’s product requirements, in return for MSB having exclusive access to Lonza’s Cell Therapy facilities in Singapore.

The alliance is a critical plank in Mewsoblast’s strategy to market its product, as it creates certainty in the ability of the group to manufacture its MPCs.

Another interesting aspect of the alliance was Lonza using its intellectual property to help lower MSB’s manufacturing costs.

This would be in keeping with MSB’s aims to generate higher margin products, and would also provide it with the flexibility to develop new technologies.

Looking ahead

Whilst market excitement grows surrounding the therapeutic potential of MPCs, MSB has turned heads with its unique product innovation.

With regulatory approvals continuing to roll in and a global manufacturing alliance locked in, MSB is in a good position to bring its MPC technology to market.

The bone marrow product could be the company’s first revenue generating biologic therapy in the US and Europe.

MSB has huge revenue potential and exclusive rights to a series of patents and technologies relating to MPCs.

Furthermore, a successful outcome for MSB’s Phase II congestive heart failure trial could make MSB one of the stocks to watch in coming weeks.

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Sigma Pharmaceuticals (ASX:SIP) is a manufacturer and marketer of prescription, over-the-counter, and generic pharmaceutical products. It is also the owner of a leading full-line wholesale and distribution business to pharmacies.

Today SIP reported a 1H12 net profit of $26.7 million, which compares to a net loss of $9.2 million a year earlier.

SIP’s strong cash flow generation put a major dent in net interest expense, which was a key driver of the profit result.

EBIT jumped 55% on-year, helped by a 9% lift in underlying revenue.  The healthy sales result reflected market share gains.

An interim dividend of 1.5 cents was declared.  SIP said more would be done in the coming year to keep it ahead of industry changes.

SIP has been one of today’s best performers in the Australian share market.  It has also been one of the top stocks in recent months, having more than doubled in price since March.

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Cochlear (ASX:COH) is a world leader in restoring hearing to profoundly hearing-impaired patients.

The company currently occupies a 70% share of the world market for the profoundly hearing impaired (PHI), selling its products in over 100 countries.

COH shares have been smashed today after the group recalled its latest hearing implant range.

The voluntary recall of COH’s Nucleus CI500 range was in response to a recent increase in implant failures.

The group’s shares have been trading lower by more than 20% so far today, making COH the worst performer in the stock market.

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Acrux (ACR) is an Australian drug business, developing and commercialising a range of pharmaceutical products for global markets.

ACR’s product pipeline includes treatment of hormonal deficiencies, central nervous system disorders, contraception and dermatological conditions – covering areas including men’s, women’s and animal health.

The group’s first product, Axiron, is being marketed in the USA following approval by the US Food and Drug Administration (FDA). Axiron is a spray for men with low sex drive because of decreased amounts of testosterone, restoring the normal level of the hormone in most men.

ACR has products in late stage development, follows a low risk development path and is well funded.

The company recently won approval to market menopause treatment in Sweden. This has been cheered by the market and could lead to further approvals to sell the treatment elsewhere in Europe.

Fundamentally strong

As a company, Acrux benefits from a number of strong fundamentals. ACR boasts faster, lower risk, lower cost development than its peers, because its products contain proven drugs.

ACR’s products are designed to have strong competitive advantage (“patient-preferred and patent protected”) and the group boasts a track record of commercial deals.

The company’s lead product, Axiron, has moved successfully through FDA approval, whilst the group has a range of products in clinical development for a range of therapeutic areas.

The broader environment for ACR is also supportive. As a pharmaceutical and biotechnology player, ACR is part of a relatively defensive sector.

Last year, ACR concluded Australia’s largest ever biotechnology licensing deal by entering into a global and exclusive agreement with Eli Lilly, a top-10 international company with reported revenue in 2009 of US$22 billion.

ACR is understandably focused on driving ahead with its landmark product, Axiron.

Axiron was the first testosterone replacement product approved for administration under the arm.

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Swedish persuasion

Last month, ACR announced it has been granted a marketing authorisation for its Ellavie product by Sweden’s Medical Products Agency.

The move has placed ACR in a strong position to actively engage potential marketing partners for the European market.

The estrogen therapy market outside the US is valued at US$360 million a year and ACR is looking to get a share of this market.

Earnings impress

In February, ACR reported a first half profit of $56.7 million, up from a loss of $2.1 million on year.

This translated to a diluted earnings per share of 34 cents. Revenue for the period jumped to $90.5 million (from $0.6 million).

ACR received US$87 million from Eli Lilly following the Axiron approval. A first distribution of approximately 60 cents per share was declared.

Looking ahead

The fully year profit after tax is expected to be similar to the first half result which equates to a very strong year.

Axiron was launched by Eli Lilly in the US at the end of March and is a significant step for ACR given the potential for the product.

Acrux is eligible to receive further sales milestone payments of up to US$195 million and will receive royalties on worldwide sales of Axiron.

Further approvals to sell Ellaive in Europe would give the stock significant upside.

The company has high cash reserves, sitting at $147 million, leaving it well capitalised for any investments.

A threat is the surging Aussie dollar which impacts ACR negatively on its US dollar earnings.

ACR continues to deliver on milestone projects which should help in generating significant and sustainable cash flows.

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Biota Holdings (BTA) is an Australian based, anti-infective drug development company.

The group specialises in the discovery and development of pharmaceuticals, focusing on research for the treatment of viral respiratory diseases, particularly influenza (flu).

It was one of the shares to sell from mid-February following a disappointing half year result.

However, BTA surged on Friday after it was awarded a US$231 million contract for the advanced development of its laninamivir drug.

Laninamivir is an influenza antiviral, which offers the ability to treat an influenza infection.

The contract will be fully funded over five years and is dependent on Biota Holdings achieving key milestones throughout the period.

BTA rocketed over 35% following the announcement, making it the best performer in the Australian share market.

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Prima BioMed (PRR) is a biotechnology company focused on cancer immunotherapy, which stimulates the body’s own immune system to attack tumours.

Its lead product is the CVac ovarian cancer immune therapeutic or known as therapeutic cancer vaccine.

CVac has completed two successful clinical trials and is progressing toward eventual commercialisation in the US, Australia, Europe, and globally.

This product is a maintenance therapy for patients with ovarian cancer administered post surgery and post chemotherapy to delay relapse and control metastases.

The company’s strategy is to commercialise CVac into the multi-billion dollar global oncology therapeutic market.

PRR has other products in the development pipeline like the Oral HPV vaccine created using dense gas technology.

PRR plans to list on the Nasdaq Global Market in the United States. Subject to approval, the company will have a dual listing of its securities on both the ASX and Nasdaq.

PRR has also been one of the hot stocks recently, with its share price surging more than 50% in the past few weeks.

Projects progressing

CVac results from phase I and phase IIa trials have been very promising. It has also been evaluated for a registration study in breast cancer.

The global market size for ovarian cancer is estimated to grow to US$3.6 billion in the near future.

CVac would be the first of its type in the market and would and would initially aim to take a conservative 10%-25% of the ovarian cancer treatment market.

A conservative 10% market share equates to approximately US$360 million per annum.

CVac also has potential indications in several additional cancers.

Trial for ovarian cancer patients in remission is planned to commence by third quarter 2011.

Financials

Being in infancy, PRR’s financial record is yet to gain traction. The company recently announced the appointment of Ian Bangs as its new CFO to bolster its financial affairs.

For the half ended 31 December, PRR reported a marked increase in revenue to $0.51 million.

The company also saw its net loss narrow to $6.9 million (from $7.9 million) on year.

With PRR progressing rapidly to commercialisation of world’s first ovarian cancer vaccine, we feel this result will be turned around soon.

PRR is well funded with $40 million committed for current work.

Looking ahead

PRR’s CVac addresses a major global unmet medical need. The company has top tier scientific advisors and project managers with a track record of successful commercialisation.

Its long term goal is to develop commercial cancer treatment technologies and programs for global markets.

Successful results will see Prima BioMed capture a significant share of the multibillion dollar cancer vaccine market.

Trials indicate CVac is a strong candidate for treatment of ovarian cancer patients in remission.

Success will provide considerable investment return over the next 2 to 3 years therefore PRR will be one of the stocks to watch.

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Resmed (RMD) is a leading developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders such as sleep apnoea.

RMD operates in over 65 countries through 16 direct offices and a network of distributors, including Australia, France, Germany, New Zealand, Singapore, the UK and the United States.

Last week, RMD announced a 1H11 net profit of US$115.2 million, up 30.7% from a year earlier.

Revenue increased 12.6% to US$359,953, driven by growth in flow generators and masks sales.

Resmed said it expects growth of all of its products to continue to benefit from the growth in the sleep-disordered breathing market.

RMD lost 2.1% last week, underperforming the share market, which gained 0.4%.

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Ramsay Healthcare (RHC) is Australia’s largest private hospital operator, with approximately 30% of the market share.

RHC facilities cater for a broad range of health care needs from day surgery procedures to highly complex surgery, as well as psychiatric care and rehabilitation. The group boasts over 100 hospitals and facilities spread out over Australia, the UK and Indonesia.

On 20 December, Ramsay Healthcare announced that its first half result for the six months ended 31 December 2010 is likely to be 26%-28% higher on year.

This was due to a better than expected performance in the Australian business and a slightly better than expected performance in its UK business.

This has also translated into an upgrade in FY11 EPS growth of between 18% to 20% following a core NPAT guidance of 22%-24% growth.

RHC soared 4.6% on the day of the announcement, making it one of the top stock performers in the Australian share market.

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