Three international pharma groups including US giant Eli Lilly make 'friendly approaches' for Ariad Pharmaceuticals

Ever since Ariad Pharmaceuticals’ Ponatinib treatment for leukemia was given the green light by American regulator, the FDA, industry majors have been sniffing around.

As its shares changed hands at $6.50, valuing the Massachusetts-based company at around £800m, dealers heard whispers from across the Pond that at least three international pharma groups including US giant Eli Lilly have made ‘friendly approaches’ to the Ariad board and are prepared to pay up to $20 a share in cash to gain control.



Ariad recently announced the commercial availability of Ponatinib for adult patients with refractory chronic myeloid leukemia, increasing its attraction to global players who wants to enhance its position in the crucial cancer treatment field.



Eli Lilly is said to be well ahead of the field and could soon swallow Ariad with loose change. Other interested parties believed to be keeping a close eye on the situation in case Eli walks away are GlaxoSmithKline, 11.5p off at 1650p, and Shire, 25p better at 3023p.



Shire, which last week announced the sale of Dermagraft – its bio-engineered skin substitute used to treat diabetic foot ulcers – to Organogenesis of the US, was helped yesterday by a BarCap upgrade to overweight and raised target price of 3275p, up from £28. The broker said Shire had scope for more bids and deals and expects additional corporate activity in the Rare Disease pipeline during 2014. It followed JP Morgan’s comment on Tuesday that Shire could use excess cash for bolt-on acquisitions.



AstraZeneca eased a fraction to 3934p, seemingly unimpressed with news of the European regulatory approval of its sodium-glucose cotransporter inhibitor Forxiga for use in a fixed-dose combination with metformin for the treatment of type 2 diabetes.



Although the Bank of England said it was in no rush to raise UK interest rates after the unemployment rate dipped to 7.1, the Footsie drifted 7.93 points to 6,826.33, while the FTSE 250 improved 2.97 points to 16,147.17. Wall Street traded 79 points down at the opening, not helped by the world’s biggest technology services group IBM missing revenue expectations for the fourth straight quarter.



Insurer Standard Life put on 6.2p to 390.1p after RBC Capital upgraded to outperform from perform.



Up 31 per cent since July, UBS advised clients that the current RBS share price already discounts much of the progress expected to be made from recent restructuring over the next 18 months. The shares fell 11p to 348p.



Rival broker Liberum Capital takes the opposite view. It believes RBS has the potential to be highly profitable and low risk by 2017. The bad bank is offloaded, the balance sheet stops shrinking, Citizens is sold, the liquidity portfoilo is run down by £25bn-plus and Direct Line is replaced by an alternative financial investment. Its target price is 445p.



Petra Diamonds sparkled at 134.9p, up 9.9p. It followed a Charles Stanley Securities buy recommendation in the wake of the company’s discovery of an exceptional 29.6 carat blue diamond from the Cullinan mine in South Africa, the second in less than a year. The April 2013 recovery was sold for £10.2m and the latest stone is likely to be priced at a similar value.



Dog of the day was Carclo which was sold down to 177p on a shock profits warning before closing 85p or 31.95 per cent down at 181p. The group said lower-than-expected sales in its Conductive Inkjet Technology (CIT) business would reduce forecast profitability in the second-half.



Shares were trading at 507p this time last year. With touchscreen phones and tablets a ‘must have’ for every man and his dog, buyers bought the stock believing its joint venture with Atmel and demand for the company’s injection moulded plastic parts used in expensive mobile phones would accelerate.



Sold down to 27.5p last Friday following a profits warning and revelation that the board was ‘in constructive discussions’ with its bankers Barclays, Quercus Publishing rallied 2p to 32p. Buyers nibbled on hearing the company had put itself up for sale. It said interested buyers would not be required to go public or stick to the usual 28-day deadline, but would be required to enter into a non-disclosure agreement before being permitted to participate in the process.



Residential property group Grainger firmed 4.1p to 225.8p after receiving planning permission for 53 homes on the former car park at Young Street, Kensington, and 31 at Hortensia Road, Chelsea. The two developments have a gross value of more than £110m and work is expected to start within a year.



AIM-listed utlity cost management consultancy Utilitywise advanced 10.75p to 280p after director Jeremy Middleton acquired 1.15m shares at 260.22p a pop.

Buyers chased Beijing-based CIC Capital 5.71pc higher to 4.62p amid growing speculation that its 48 per cent-owned Emulsion Fuels subsidiary could be hived off later this year.

