Takeover talk takes overAustralian Financial...

Takeover talk takes over
Australian Financial Review
01/11/07

...Preceded by takeovers in Resources sector...

Over in the biotech world it is still a far harder slog, with liver cancer drug developer Progen Pharmaceuticals losing a key supporter this week after AMP Capital Investors revealed it had ceased to be a substantial shareholder.

This is said to be a result of recent changes to AMP’s investment team.

Coincidentally, Northcape Capital, which has employed the departed AMP fund manager responsible for the holding (though he is yet to actually start) has emerged in recent days as a substantial shareholder in Progen, so it looks like the boutique fund manager is filling the void left by AMP.

Unfortunately Progen shares are now trading at $2.60, way back from the $5.74 price at which the company raised money in June and Progen’s price of more than $7 a share in May.

Investors are waiting for some newsflow with regards to a deal with a big pharmaceutical company, while clearly some aren’t going to be too happy if the price remains at current levels by the time the annual meeting comes around at the end of this month.

There has also been talk that shareholders are agitating for someone to buy the company (perhaps an Asian pharmaceuticals group), but maybe the situation will become clearer over the next month. Encouraging progress on Progen’s PI-88 drug made it on of the more closely followed biotechs by institutional investors (though not many are), but it looks as though that momentum has been lost.