SunTrust Update on Amarin: We see a high probability of AMRN prevailing in the NY courts and would be buyer of its shares going into that decision
After Amarin 52 million private placement with Baker Brothers Holding. Analyst raised Amarin to $10 dollars.
Sep 28, 2013,
Is Synageva BioPharma a buy? Baker Bros. Advisors, a hedge fund managed by Julian and Felix Baker with a focus on biotechnology, increased its stake in Synageva BioPharma Corp (NASDAQ:GEVA). In a filing with the SEC, Baker Bros. disclosed ownership of 10.3 million shares of Synageva, which is higher than the previously held amount of some 9.2 million shares. The value of the current position, which represents 34% of the company, amounts to $641.1 million at the current price of company’s stock.
Alexion agrees to acquire Synageva Biopharma (GEVA) in transaction valued at $8.4 Billion
And The Baker Brothers was a major holder in GEVA. Baker Brothers now making huge investment in Amarin.
Baker Brothers Investments own more than 10 million shares of GEVA
News today, Alexion agrees to acquire Synageva Biopharma (GEVA) in transaction valued at $8.4 Billon
Alexion (ALXN) and Synageva (GEVA) announced that they have entered into a definitive agreement pursuant to which Alexion will acquire Synageva for consideration of $115 in cash and 0.6581 Alexion shares, for each share of Synageva, implying a total per share value of $230 based on the nine day volume-weighted average closing price of Alexion stock through May 5, 2015. The transaction has been unanimously approved by both companies’ boards, and is valued at approximately $8.4B net of Synageva’s cash. The transaction is expected to accelerate and diversify Alexion’s growing revenues, and Alexion expects to achieve annual cost synergies starting this year and growing to at least $150M in 2017. In addition, the transaction is expected to be accretive to non-GAAP earnings per share in 2018. The completion of the exchange offer and the merger are subject to customary closing conditions, the tender of a majority of the outstanding shares of Synageva common stock and receipt of required regulatory approval. The transaction is expected to close mid-2015. The merger agreement provides that Alexion may, in certain circumstances, determine to alternatively effect the transaction through a one-step merger, in which case a meeting of Synageva stockholders would be held to vote on the transaction. In connection with the Transaction, Synageva shareholders, including affiliates of Baker Brothers Investments, have entered into voting and support agreements with Alexion covering approximately 33.5% of Synageva’s outstanding shares. Alexion has received committed financing of $3.5Bfrom Bank of America Merrill Lynch and J.P. Morgan in connection with the transaction.
GSK lost Tier 2 coverage of 131M lives and stopped direct promotion of Lovaza
in January. Vascepa began 2015 with 125M lives under Tier 2 coverage.
Lovaza generated ~2.9M TRx in 2014; we estimate each 10% conversion
from Lovaza to Vascepa could add ~$40M to $60M to AMRN’s sales. Current
contracts and co-pay programs allow Vascepa to be either at parity or cheaper
than genericd, which combined with its superior clinical profile allow AMRN to
offer a better value proposition. Lovaza TRx (including generics) was up +1.8%
yoy in 1Q15, but declined -8.3% vs. 4Q14, compared to +72.6% and +3.8%
respectively for Vascepa. We believe AMRN is leveraging Kowa’s detailing
effort of 60K high volume prescribers not covered by AMRN to steadily gain
share via expanded Tier 2 coverage.
SUNTRUST EARNINGS PREVIEW
Our 1Q15E sales are $18.9M, slightly above the Street’s $18.7M on +73%
TRx growth, with an in line loss per share is (-$0.11). The focus is on
sustainable Vascepa volume growth, expanding Tier 2 formulary coverage, &
new starts/Lovaza patient switches. The ANCHOR CRL on 4/28 was in line with
expectations. This turns investor attention to the ongoing REDUCE-IT study for
label expansion, with an interim look expected in 2016. Future deals similar to
Eddingpharm in other ex-US regions are free call options that will place upward
pressure on its shares. Maintain Buy/$6 PT.