The Zacks Analyst Blog Highlights: AbbVie, Amgen, Regeneron, Pharmacyclics and Repros Therapeutics

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Oct 23, 2014, 09:30 ET

CHICAGO, Oct. 23, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the AbbVie (NYSE:ABBV-Free Report), Amgen (Nasdaq:AMGN-Free Report), Regeneron (Nasdaq:REGN-Free Report), Pharmacyclics (Nasdaq:PCYC-Free Report) and Repros Therapeutics (Nasdaq:RPRX-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Biotech Stock Roundup

Tax inversion deals are no longer looking so attractive given the notice issued by the U.S. Department of Treasury in September. In fact, AbbVie (NYSE:ABBV-Free Report) has dropped its plans to acquire Shire and will be paying a break-up fee. Meanwhile, Amgen (Nasdaq:AMGN-Free Report) is being urged to consider splitting into two companies which would create more value.

Recap of the Week's Most Important Stories

1. AbbVie called off its plans to acquire Shire: the company's decision to step back from the deal had a lot to do with the Sep 22 notice issued by the U.S. Department of Treasury related to tax inversion deals. The Shire acquisition would have allowed AbbVie to benefit from lower tax rates. However, the changes proposed by the Department of Treasury could very well destroy the financial benefits of these types of transactions.

With the termination of the deal, AbbVie will have to pay a breakup fee of $1.635 billion. Although the company announced a $5 billion share buyback plan and boosted its dividend, AbbVie remains highly dependent on Humira for growth. While the pipeline should start delivering, quite a few companies are working on developing biosimilar versions of Humira (Read more: AbbVie Drops Shire Deal, Announces Buyback, Ups Dividend).

2. Amgen is being urged by hedge fund manager Daniel Loeb to split into two companies. This is not the first time that this opinion has been voiced. Loeb suggested that Amgen is likely to benefit if it splits into two companies with one focusing on the cash-generative mature products and the other on R&D-intensive growth products. Amgen's shares were up almost 5%. Companies that adopted the split route in the recent past include Abbott Laboratories and Theravance.

3. Regeneron (Nasdaq:REGN-Free Report) and partner Sanofi are facing a patent infringement lawsuit from Amgen regarding their PCSK9 inhibitor, alirocumab. Through this lawsuit, Amgen is trying to delay the entry of competitors in the highly lucrative cholesterol management market. Amgen has been ahead in the race having filed for approval of its PCSK9 inhibitor, evolocumab, this August.

However, Regeneron and Sanofi are targeting a year-end filing for their PCSK9 inhibitor and are planning to seek priority review, which means both drugs could gain approval around the same time (Read more: Amgen Sues Sanofi and Regeneron over PCSK9 Candidate).

4. Pharmacyclics (Nasdaq:PCYC-Free Report) was in the news last week with the company signing an agreement with Roche under which its cancer treatment, Imbruvica, will be evaluated in combination with Roche's Gazyva (Read more: Pharmacyclics, Roche Ink Deal for Cancer Combo Therapy). Moreover, Imbruvica gained EU approval for two types of blood cancer and Pharmacyclics is now looking to get Imbruvica's label expanded in the U.S. for Waldenstrom's macroglobulinemia, a slow-growing, currently incurable, rare type of B-cell lymphoma.

5. Repros Therapeutics' (Nasdaq:RPRX-Free Report) shares plunged almost 40% on news that its upcoming meeting with the FDA for its testosterone treatment, Androxal, scheduled for the first half of November, will be a Type C guidance meeting instead of a Type B Pre-NDA meeting. According to the FDA, a preliminary review of the company's briefing document showed that there was not enough clinical information for the meeting to be a Type B Pre-NDA meeting. The news is disappointing as this may well lead to a delay in the company's plans to file for regulatory approval by year end.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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