Belgium's Ablynx has responded stridently to a newspaper report which contained "a number of negative statements and quotations" and led to a sharp stock decline.
On January 20, De Tijd, a Belgian newspaper, published online a summary of a full article relating to Ablynx, scheduled to appear in print the following day. The company says the summary, based on an interview with chief executive Edwin Moses, included statements and quotations which "were poorly translated or simply not reflective of the interview that took place."
Ablynx's stock price fell almost 14% in about an hour and over 400,000 shares were traded - two to three times the normal volume. A number of investors then contacted Ablynx directly and they were "clearly completely misled by the summary article and assumed that disappointing news had been announced". The firm insists that no material new information had been provided during the interview with De Tijd.
On January 21, the full article appeared and while this contained "significant errors", Ablynx acknowledged that it is more representative of the actual interview than the online summary", which De Tijd agreed to remove. The company also noted that "to assist investors", it has posted on its website "our English translation of the De Tijd article which we have edited extensively to correct what we believe are material factual errors in statements or quotations".
De Tijd has responded by saying it stands by the article which focuses principally on Pfizer's decision last November to return worldwide rights to Ablynx’s TNF-alpha targeting nanobodies, including those for ATN-103 (ozoralizumab) for rheumatoid arthritis. The Ghent-based group is now looking for a new partner.
The newspaper printed quotes in English from Dr Moses which differ in tone to those printed on the Ablynx website but investors seem to be placated. Ablynx shares ended the day up 13.8% at 3.05 euros.
Analysts expect new deal for RA drug
Meantime, analysts at Edison Investment Research have published a report on Ablynx, noting that it is planning to form more drug discovery collaborations and "intends to be more flexible about the terms of potential partnerships and the stages at which it will partner programmes". This should improve Ablynx’s risk profile, they say, but may also reduce the potential return.
These activities should enable the company to limit its cash burn rate to 20-25 million euros, says Edison, which has lowered its valuation by 44 million euros to 452 million euros, "still over three times its current market cap". They feel Ablynx will out-license ATN-103 in the second half of 2012 but their valuation falls to 212 million euros if a partner is not secured.
