Posted by TAP on 1/14/2002, 8:45 am A Blockbuster Cancer Foe? Antisense treatments for diseases such as cancer have been a promising part of biotechnology ... for more than 10 years. The technique identifies the flawed genetic messengers inside a cell that are instructing the cell to misbehave in a way that causes a disease. Researchers then try infiltrating the cells with "antisense" snippets of genetic code that specifically pair up with the harmful messages, blocking their harm. The trick has proven harder than it first looked, and the field of antisense stock plays has narrowed to two Nasdaq-listed firms: Isis Pharmaceuticals and Genta. While biotech stocks were flat last year, Isis and Genta nearly doubled to recent prices of 19 and 13, respectively. Isis is targeting a number of diseases; Genta has zeroed in on cancer with a molecule it calls Genasense. The Genta drug blocks cells from producing a rogue protein called BCL2, which is a factor in a surprising variety of cancers. BCL2 helps cancer cells survive by jamming the self-destruct process otherwise triggered by chemotherapy, radiation or immune therapies. Investors have made large bets on the Berkeley Heights, New Jersey, company, which has nearly 66 million shares outstanding. Some eight million shares were sold short, at last count. The Aries hedge funds managed by Lindsay A. Rosenwald, on the other hand, reported owning 27 million shares as of September -- worth about $270 million at the time. Genta shares stumbled in December on reports that doses of Genasense in a leukemia test had put a couple of patients into intensive care, with low blood pressure and fever. To make the drug tolerable, doctors had to reduce dose levels by half, says Michael Andreeff, a hematologist at M.D. Anderson Cancer Center in Houston, where the 14-patient trial was coordinated. Studies are proceeding in leukemia patients at the lower dose, as well as clinical studies against myeloma and melanoma, says Dr. Raymond P. Warrell Jr., who left a teaching post at Sloan Kettering to become Genta's chief executive. Warrell spoke to Barron's just after meeting with the Food and Drug Administration, whose reviewers requested no basic change in Genasense trials. Accompanying Warrell at the meeting was Dr. Kanti Rai, a distinguished leukemia researcher from Long Island Jewish Medical Center. While no patient staged a major recovery in the leukemia trial, Rai says he saw enough signs of Genasense's effectiveness to feel that the Genta drug could prove a blockbuster when combined with chemotherapy in larger drug trials. Dr. Finbarr E. Cotter, a hematologist who has tested Genasense at the Royal London School of Medicine, also thinks the drug will prove a winner against several forms of cancer when combined with chemo or antibody drugs. From his contacts with doctors in Vienna who are testing Genasense with a chemo drug against melanoma, he thinks people will be "pleasantly surprised by the results." Genta CEO Warrell says he's in the last stages of partnering with a large drug firm. "The shorts need to make their money quickly," he says, "because a happy event is going to catch them." --Previous Message--
Word on the message boards is the hegde-funds that have GNTA shorted upwards of 8 mil shares had informed Barrons with some lies about the company and its drug and shorted the stock more Friday hoping for negative article but the writer for Barrons did some DD of his own and came up with article below which has GNTA volume and share price running strong. Note the comment from GNTA CEO in last paragraph that confirms the last Strong Buy report from brokerage Thomas Weisel that a partnership is close at hand. The thing to keep in mind is the IMCL mishap lately had put pressure on GNTA and bio-tech sector ....GNTA is not going to make the same blunder as IMCL and also IMCL ran to $70+ level partly from the fact that its short interest was also at a peak when its partnership deal with Bristol Myeyers was announced.
: ·Hello TAP members...as some of you may
: remember back in Dec '99 TAP sent
: a stock alert out on GENE when it
: was trading between $9-10 stating
: that it was the stock to own for
: 2000. Gene went on to sky rocket
: to $75 before the tech-bubble
: burst and is now trading around
: $7. The perception for drug
: discovery companies such as GENE
: like the market itself has changed
: since then and the momentum has
: shifted to companies that will
: make and market their own drugs.
: TAP believes GNTA which some of
: you are already invested in will
: be the stock to own for 2002. GNTA
: was brought to TAP's attention by
: one of our members back in April
: of 2000 at which time was sent out
: as a stock to watch trading around
: 9 3/4 while GENE was soaring to
: new highs. On 8/22/00 GNTA was
: trading around 6 3/4 at which time
: TAP decided it was time to make it
: a New Pick. based on the news the
: company had at the time. Today TAP
: has decided that GNTA trading
: around $15 currently is definately
: the stock to own for 2002 in the
: bio-tech sector and wants to make
: sure all members have a chance to
: hop on board because according to
: todays Strong Buy Recommendation
: the train could be leaving the
: station very soon. Below is the
: coverage initiated by brokerage
: Thomas Weisel with a $32 price
: target. The key information in
: this report is the part about a
: partnership deal being close to
: conclusion. TAP believes that if
: the deal has enough 000's in it
: that the $32 /12 month price
: target could be met and exceded
: within 2 weeks of announcement
: just as GENE ran past its $65
: target back in '00 when it was in
: its heyday. Speculation is rampant
: on the GNTA message boards
: especially after lucrative
: ISIP/AMGN and IMCL/BMY deals were
: made in '01 and the recent
: articles on bio-tech sector
: mentioning GNTA as a prime
: candidate to be next in line with
: its unequaled 4 phase 3 trials
: currently in progress. Also the
: recent addition of Dr Zenner,
: former CEO of Hoffmann-LaRoche to
: Genta's BOD has some guessing that
: LaRoche may be the most likely
: partner. Regardless who the
: partner may be if they lock up all
: phase 3 indications for Genasense
: the deal could be a blockbuster
: for GNTA. One quick note....though
: this brokerage isnt one of the
: bigger of the half dozen who have
: initiated coverage on GNTA, price
: target is the highest yet of all
: and the volume and price movement
: today is impressive. The analyst
: happens to have the M.D. title
: next to his name which makes his
: comment about GNTA management more
: credible IMO. Also there is a
: large short position in GNTA of
: almost 8 mil shares (about 28% of
: float) as of 12/10/01 and a short
: squeeze could be in the making
: especially should a partnership
: deal materialize.
: We are initiating coverage of six
: anticancer companies that we
: propose are going to play a major
: role in the future of cancer
: treatment: Amgen (AMGN; Buy);
: Genentech (DNA; Market Perform);
: Idec Pharmaceuticals (IDPH;
: Attractive); Imclone Systems
: (IMCL; Market Perform); Genta,
: Inc. (GNTA; Strong Buy); Aphton
: Corporation (APHT; Buy)
: Analyst: Patrick Mooney, M.D.
: 212.271.3761
: Genta, Inc. (GNTA; $13.89; Cap $760m;
: Strong Buy) - Initiating Coverage
: with a Strong Buy Rating
: · We are initiating research coverage
: of Genta, Inc. with a STRONG BUY
: investment rating and a 12-month
: price target of $32 per share.
: Genta is our top pick in the
: biotechnology cancer treatment
: space.
: · Genasense, the companys lead
: anti-sense product candidate, is
: highly specific with limited side
: effects, conferring an immediate
: advantage over its competitors in
: the cancer treatment space. We
: believe that Genasense will be
: rapidly adopted as an adjuvant
: anticancer drug and could exceed
: $1 billion in worldwide sales.
: · Genasense is in late-stage clinical
: development in four
: registration-directed trials. Data
: from all four trials should be
: available by mid 2Q02. We view it
: as likely that the compound will
: achieve FDA approval by 1Q03.
: · Genta is close to concluding an
: ex-North America partnership for
: Genasense. We expect this deal to
: include substantial upfront cash
: and double-digit royalties. We
: expect this deal to conclude by
: 1Q02.
: · Genta's management team is arguably
: one the best in the oncology drug
: development business. We have a
: high level of confidence in this
: team.
: · Our valuation is based on a 12x
: EV/Revenue multiple of 2004
: revenues, discounted back 2 years
: at 30%.
: Estimates: FY'01 $ 0.10 m, ($0.68) ;
: FY02 $ 1.85m, ($0.60)
: DISCLAIMER
: TAP has taken a postition in GNTA
: common stock and is not
: compensated in any way by any of
: the companies mentioned above.
: Investing in any equity involves
: risk to capital for which TAP will
: not be responsible for should you
: decide to invest. Information
: above is forward looking and
: speculative and TAP cannot be
: responsible for any information
: contained herein although believes
: it to be accurate.
:
:
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