Biz Break: Zynga launches “Willy Wonka” slots game; Medivation surges on takeover speculation

Top Of The Order: 

Medivation Speculation: Drug and pharmaceutical companies know all too well how quickly investors can make your day or break your heart. One day, the Food and Drug Administration is giving the OK to your next creation; the next, your exclusivity on a product is expiring and you’re facing competition from generic brands.

And some days, you wake up to some good old-fashioned takeover speculation. Which is what helped the shares of San Francisco-based Medivation surge by 23 percent Thursday to close at $45.99.

[graphiq id=”dkKrKOKbY7X” title=”Medivation Inc. (MDVN) Stock Price” width=”600″ height=”617″ url=”https://w.graphiq.com/w/dkKrKOKbY7X” link=”http://listings.findthecompany.com/l/14030626/Medivation-Inc-in-San-Francisco-CA” link_text=”Medivation Inc. (MDVN) Stock Price | FindTheCompany”]

What happened was that Medivation has reportedly hired J.P. Morgan to help it fend off takeover overtures from an unknown number of possible suitors. Because success in the pharmaceutical market is often based on a company having one or two breakthrough drugs, companies often look at acquiring competitors who already have products on the market, thus reducing the work needed to come up with a new pill or treatment on their own.

In the case of Medivation, what makes it attractive is Xtandi, a prostate-cancer drug that it makes along with Japan’s Astellus Pharma. Xtandi accounts for more than $1 billion in sales for its makers. And in the minds of many, including some members of Congress, Xtandi costs way too much. So much that earlier this week, Democratic Presidential candidate Vermont Sen. Bernie Sanders, and Reps. Lloyd Doggett and Peter Welch sent a letter to the directors of the Department of Health and Human Services and the National Institutes of Health, asking those agencies to work toward cutting the price of Xtandi.

The thought of congress taking steps to rein in the cost of Xtandi was enough to send Medivation’s shares to fall 12 percent this week prior to Thursday’s acquisition-speculation surge.

Oh, and for those keeping score at home, Sanders, Doggett and Welch said Xtandi costs about $30,000 for a year’s worth of treatment in Canada, while in the U.S., the same drugs go for almost $130,000. At those prices, you wouldn’t want to mistakenly drop one of Xtandi’s proverbial pills down the drain.

Middle Innings:

Will They Take Chocolate Coins?: Online social-gaming company Zynga has been in a state of flux through most of this year. Probably Exhibit A of that came earlier this month when Zynga founder Mark Pincus stepped down from his second stint as the company’s chief executive, and was replaced by former Electronic Arts executive Frank Gibeau.

Prior to Zynga’s CEO switch, the company said it would launch 10 new games designed to improve its place in the mobile-gaming market. On Thursday, Zynga went all Oompa-Loompa with the launch of its new “Willy Wonka & The Chocolate Factory Slots” title, which is available on several platforms, including iOS and Facebook.

Zynga needs to do something to regain the status it once had in the gaming market after the success of titles such as “Farmville” and “Mafia Wars”. Slots games are seen as an area of potential growth for Zynga, with other titles that require players to buy coins to play and move up levels in the game. But “Willy Wonka” will be a free-to-play slots game. It’s also the first title to be released under Zynga’s agreement with Warner Bros. Interactive Entertainment.

Fitbit Gets Into Shape: Fitness device maker Fitbit shook off concerns Thursday that it might have a bit of a downturn following the holiday shopping season as the company said its newest fitness tracking wristbands have been a hit with consumers.

Fitbit said it has shipped more than 1 million units each of its Fitbit Blaze and Fitbit Alta devices in the first month that the devices have been available. The Blaze retails for $199.95, while the Alta costs $129.95. The early sales figures were enough to give investors some faith that Fitbit might end up reporting better-than-expected results for its current quarter, as Fitbit shares rose 13 percent to close Thursday at $15.15.

In February, Fitbit threw a spanner into the works, when it gave a first-quarter outlook that included expectations for a profit of a penny a share on $430 million in revenue. That forecast fell short of Wall Street analysts’ estimates for earnings of 23 cents a share on sales of $485 million.

A Marriage Made In Blue: IBM, which still is known as Big Blue by many, said Thursday it’s acquiring San Francisco-based Bluewolf Group, a provider of cloud consulting services, and a partner of Salesforce.com. Financial terms weren’t disclosed, but reports put the purchase price at $200 million. The move was viewed as a way for IBM to become a consulting partner with Salesforce, and Marc Benioff, Salesforce’s CEO, played the role of the father of the bride-to-be and gave his approval to his child’s new spouse.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks did Thursday…

Movin’ On Up: Besides Medivation, Aemetis shares rose 12.3 percent, Nimble Storage climbed by 7 percent, Imperva shares added almost 6 percent and SolarCity rose 5 percent.

In The Red: Pandora Media shares fell more than 5 percent and losses also came from Ruckus Wireless, Yelp, QuinStreet and Inphi.

The SV150 Index of Silicon Valley’s biggest companies rose almost 11 points to 1,628.

The tech-focused Nasdaq Composite Index gained less than 1 point to close at 4,869.

The blue chip Dow Jones Industrial Average fell 31 points to 17,685.

And the broad-based Standard & Poor’s 500 Index gave up 4 points to close at 2,059.

Quote Of The Day: “I’m not sure whether I’m an actor who races or a racer who acts.” — Steve McQueen.

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Photo: Screenshot from Zynga’s “Willy Wonka & The Chocolate Factory Slots” game. (Courtesy: Zynga)

 

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