Biotech sector consistently erratic
Tim Boreham
The Australian
July 28, 2014 12:31PM
Tim Boreham
Criterion Columnist Melbourne
https://plus.google.com/116956110402704936193
THE erratic fortunes of the biotechnology sector have been highlighted yet again today with a surprise $95 million takeover offer for skin disorders house Clinuvel (CUV, $2.12) and a big clinical trial setback for liver-cancer house Progen (PGL, 35c).
Clinuvel has fielded an unsolicited proposal from Retrophin of the US, offering 0.175 of its own scrip worth $2.14, or $2.17 in cash. This would be via a scheme of arrangement.
Clinuvel for years has been labouring to develop its Scinesse compound for a number of exotic disorders with “unmet clinical need”, notably erythropoietic protoporphyria (EPP).
EPP caters for so-called shadow chasers — there are about 10,000 of them globally — who have an extreme aversion to the sunlight.
While Clinuvel wants to prove its medical street cred, commercialisation lies in off-label uses such as safe tanning.
After all, Clinuvel used to be known as EpiTan on listing in 2001.
For EPP, Clinuvel is “highly confident” of marketing Scenesse in Europe in 2015 (in other words, gaining regulatory approval).
Amid whispers of an alternative proposal emerging, the Clinuvel board says it will “revert with an update at the earliest possible time’’.
Given the languid pace of Clinuvel’s development, an offer at a 30 per cent premium isn’t a bad result. Then again, the company spent around $120m developing the drug to date.
Meanwhile, Progen shares sunk 71 per cent after the licensee of Progen’s liver cancer drug PI-88 reported its phase-three trial results “did not meet the primary endpoint of disease-free survival’’.
The good news? The drug is safe.
The bombshell results were based on results from the first 131 patients in a 218-patient, Asian-based randomised trial.
In 2010 Progen licensed its worldwide oncology rights of PI-88 to Medigen.
Further data analysis is under way to save the show, but it is obviously not a good look.
Our ratings on both stocks are subject to a randomised, placebo-controlled phase-three review.
