Mixed bag of small cap winners and losers in first half

Analysis

EP Vantage’s review of share price performance in the first half of the year for small, micro and nano cap companies throws up a similar list of risers and fallers as at the first quarter stage, but with some notable exceptions (InterMune tops small cap gainers once more in first quarter, April 6, 2010).

These include the sudden disappearance of previous high-flyers InterMune and Neurosearch, as sky-high expectations of regulatory approval and clinical trial success, respectively, were dashed in the second quarter. In their place come the likes of Cardiome Pharma, boosted by positive clinical data and European advisory panel review of atrial fibrillation (AF) drug, Brinavess (vernakalant), and Sawai Pharmaceuticals on the back of an increasingly attractive generics scene in Japan (see tables below).

Small cap analysis

Questcor topped the small cap gainers, boosted by a positive FDA advisory committee review of its only product, Acthar, for the treatment of infantile spasms and as chief executive, Don Bailey, told EP Vantage the company is ramping up its promotional effort behind a product with a wide array of potential uses.

Shares in Danish biotech, Bavarian Nordic, gained massively in May following the FDA’s landmark approval of Dendreon’s prostate cancer vaccine candidate, Provenge, raising hopes for clinical and partnering success for Bavarian’s own phase III prostate cancer vaccine, ProstVac.

Small cap ($250m-$2.5bn) pharma companies: top risers and fallers in H1 2010
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-09 30-Jun-10 % change YE 2009 H1 2010 EP Vantage comment and analysis
 1   Questcor Pharmaceuticals ($)  4.75  10.21  115%  293  633 EP Vantage Interview - Questcor fighting Acthar's corner
 2   Cardiome Pharma (C$)  4.66  8.78  88%  282  531 Cardiome, Pharming and Archimedes receive good news from Europe
 3   Sawai Pharmaceuticals (¥)  5,310.00  8,490.00  60%  892  1,427 EventAnalyzer: Daily Market Movers (31 May 2010)
 4   Bavarian Nordic (DKr)  143.50  221.00  54%  308  474 EventAnalyzer: Daily Market Movers (3 May 2010)
 5   Salix Pharmaceuticals ($)  25.39  39.03  54%  1,428  2,224 Salix shares get fatter on gastric problems following Xifaxan approval
Top 5 Fallers
 1   Antisoma (£)  0.33  0.06  (82%)  339  56 Antisoma rethinks strategy after lung cancer drug fails pivotal trial
 2   Medivation ($)  37.65  8.84  (77%)  1,273  301 Dimebon explodes on Medivation
 3   Affymax ($)  24.74  5.98  (76%)  591  144 Affymax reeling from Hematide safety scare
 4   ChemGenex Pharmaceuticals (AUS$)  0.99  0.30  (70%)  257  77 Omapro adcom surprise sends ChemGenex shares tumbling
 5   Cell Therapeutics ($)  1.14  0.38  (67%)  673  247 Testing times for Cell Therapeutics after adcom rejection of Pixuvri

Micro cap analysis

Idenix is gradually clawing back some of the big losses it suffered last year as the market places more faith in its hepatitis C pipeline franchise, perhaps triggered by some positive early stage clinical data for a couple of candidates in April.

Neurocrine’s long awaited recovery from the dark days of its failure with insomnia drug, indiplon, was sparked by recent positive data for endometriosis drug, Elagolix, and subsequent partnering deal with Abbott Laboratories.

The sale of Regpara's (cinacalcet) royalty stream to DRI Capital for $38m in March appears to have coincided with an upturn in market valuation for NPS Pharmaceuticals, which has since successfully raised a further $57m from a stock offering which seems to have been taken well by its shareholders.

Avexa was the only new entry in the micro cap fallers, having finally thrown in the towel on development and partnership plans for its HIV drug and lead pipeline candidate, apricitabine (ACT).

Micro cap ($100m-$250m) pharma companies: top risers and fallers in H1 2010
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-09 30-Jun-10 % change YE 2009 H1 2010 EP Vantage comment and analysis
 1   Idenix Pharmaceuticals ($)  2.15  5.00  133%  143  364 EventAnalyzer: Daily Market Movers (11 June 2010)
 2   Pharmacyclics ($)  3.14  6.66  112%  160  340 TopoTarget delivers deal and delights investors 
 3   NanoViricides ($)  0.85  1.80  112%  113  238 EventAnalyzer: Weekly Market Movers (to 19 Feb 2010) 
 4   Neurocrine Biosciences ($)  2.72  5.60  106%  120  307 Positive endometriosis data could be start of Neurocrine resurrection
 5   NPS Pharmaceuticals ($)  3.40  6.44  89%  165  379 EventAnalyzer: Daily Market Movers (2 Jun 2010)
Top 5 Fallers
 1   Novelos Therapeutics ($)  2.52  0.11  (96%)  221  10 Failure of Novelos’ lead drug proves talk is cheap
 2   Avexa (AUS$)  0.16  0.03  (79%)  124  26 Avexa’s partnering problems could be contagious in HIV space
 3   KV Pharmaceutical ($)  3.67  0.84  (77%)  191  44 EventAnalyzer: Daily Market Movers (26 Mar 2010)
 4   Vernalis (£)  0.87  0.31  (64%)  140  47
 5   GenVec ($)  1.20  0.46  (62%)  128  59 GenVec failure highlights gene therapy risks 

Nano cap analysis

New riser entries were PROLOR Biotech and Inhibitex. PROLOR received an Israeli government grant of $1.6m in April, to support development of its growth hormone candidate MOD-4023. Inhibitex reported initial safety data for its shingles candidate FV-100, as reviewed by an independent Data Safety Monitoring Board (DSMB).

Of the new top faller entries in this half of 2010, Marshall Edwards reported that its oral phenoxodiol did not meet primary or secondary endpoints in the phase III OVATURE trial.

Nano cap ($25m-$100m) pharma companies: top risers and fallers in H1 2010
Share price (local currency) Market capitalisation ($m)
Rank Top 5 Risers 31-Dec-09 30-Jun-10 % change YE 2009 H1 2010 EP Vantage comment and analysis
 1   Somaxon Pharmaceuticals ($)  1.08  3.60  233%  27  123 Somaxon wins approval for Silenor and hunt for partner begins
 2   Emisphere Technologies ($)  1.06  3.14  196%  46  135 Novel delivery of GLP-1s a challenge but alternatives lining up
 3   PROLOR Biotech ($)  2.45  6.89  181%  87  319 EventAnalyzer: Weekly Market Movers (to 26 Mar 2010)
 4   Inhibitex ($)  0.92  2.55  177%  57  157 EventAnalyzer: Weekly Market Movers (to 23 Apr 2010)
 5   Rexahn Pharmaceuticals ($)  0.68  1.43  110%  49  118 EventAnalyzer: Weekly Market Movers (to 12 Feb 2010)
Top 5 Fallers
 1   ARYx Therapeutics ($)  3.21  0.42  (87%)  92  14 Broken promises force ARYx to assess strategic options
 2   Marshall Edwards ($)  7.00  1.26  (82%)  50  9
 3   Antisense Therapeutics (AUS$)  0.06  0.01  (76%)  30  7
 4   Silence Therapeutics (£)  0.19  0.05  (73%)  96  22
 5   Nile Therapeutics ($)  1.21  0.33  (73%)  33  11

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