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Cash-Strapped Jazz Gets Stock Bump From Data On Fibromyalgia Candidate

Executive Summary

Jazz Pharmaceuticals' stock price increased 39 percent on June 25, following the second announcement in a week of a successful Phase III trial for its fibromyalgia candidate, JZP-6 (sodium oxybate). The company's share price quickly retreated, dropping 56 cents on June 26 after analysts at Barclay's Capital downgraded the company because of concerns related to its financial health. Still the 21 percent increase in share value could position the specialty pharma to raise badly needed funds, given it has dwindling cash and defaulted on two recent quarterly interest payments on outstanding debt

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Business And Finance In Brief

Vanda prepares for Fanapt launch in Q4: Vanda Pharmaceuticals is gearing up to launch its atypical antipsychotic Fanapt (iloperidone) in the fourth quarter 2009 and plans to raise the necessary capital via one or more partnerships, execs told investors on an earnings call Aug. 10. The biotech believes it has sufficient cash to fund commercialization of Fanapt through 2009, but is evaluating alternatives to keep funds flowing thereafter. Already Vanda's been the recipient of Novartis' largesse: as Fanapt's previous sponsor, Novartis was owed a $12 million royalty when FDA approved the drug in May. But Novartis agreed to let Vanda pay $7 million instead - with $5 million still due - to maximize the smaller company's short-term finances. Execs expect Fanapt to be priced in line with other antipsychotics, around $450 per month. Because these drugs belong to a protected class under Medicare Part D, insurance plans must cover all - or substantially all - costs of these drugs (1"The Pink Sheet," May, 18, 2009)

Business And Finance In Brief

Vanda prepares for Fanapt launch in Q4: Vanda Pharmaceuticals is gearing up to launch its atypical antipsychotic Fanapt (iloperidone) in the fourth quarter 2009 and plans to raise the necessary capital via one or more partnerships, execs told investors on an earnings call Aug. 10. The biotech believes it has sufficient cash to fund commercialization of Fanapt through 2009, but is evaluating alternatives to keep funds flowing thereafter. Already Vanda's been the recipient of Novartis' largesse: as Fanapt's previous sponsor, Novartis was owed a $12 million royalty when FDA approved the drug in May. But Novartis agreed to let Vanda pay $7 million instead - with $5 million still due - to maximize the smaller company's short-term finances. Execs expect Fanapt to be priced in line with other antipsychotics, around $450 per month. Because these drugs belong to a protected class under Medicare Part D, insurance plans must cover all - or substantially all - costs of these drugs (1"The Pink Sheet," May, 18, 2009)

Earnings Call Snapshots: Vanda, Jazz, WuXi, Lundbeck

Vanda Pharmaceuticals is gearing up to launch its atypical antipsychotic Fanapt in the fourth quarter, after its approval in May; meanwhile Jazz Pharmaceuticals is looking ahead to commercial plans for its fibromyalgia candidate JZP-6 (sodium oxybate), with an NDA filing expected this year.

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