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Eveillard’s First Eagle Seizes 45% of Pharamaceutical Company, Aradigm

December 19, 2012 | About:
As of Dec. 18, investing Guru Jean-Marie Eveillard, along with his mutual fund firm, First Eagle Investment Management, has reported increasing the firm’s stake in the pharmaceutical company, Aradigm Corp. (ARDM), by 173.61 percent, according to GuruFocus Real Time Picks.

First Eagle originally started with 38 million shares, upon presenting the stock as a new buy in 2009. But after buying more chunks of Aradigm this month, the firm stands with 114 million shares of the company, representing 45.36 percent of shares outstanding.

This is the second transaction made with Aradigm since acquiring the stock; the first transaction was made Dec. 11, with a purchase of about 3.6 million shares.

With a market capitalization of $25.5 million, Aradigm is focused on the development and commercialization of drugs delivered by inhalation of the treatment of severe respiratory diseases, such as bronchiectasis, cystic fibrosis, anthrax infections and smoking cessation.

One day after First Eagle’s first transaction, Aradigm announced a private placement for $6 million, targeting two existing shareholders, First Eagle being one of them. Aradigm set out to sell 50 million of its shares of common stock, at $0.12 per share.

Proceeds from the placement will be used to further the development of the medicine, ciprofloxacin, an antibiotic used to treat different types of bacterial infections, frequently experienced by cystic fibrosis patients.

Aradigm president and CEO, Igor Gonda, stated in a press release, “We are very pleased for the support demonstrated by our shareholders in this private placement. These proceeds will enable us to further our product development and formation of partnerships for commercialization."

In Aradigm’s third quarter, the company reported lower total operating expenses due to lower clinical costs for its ciprofloxacin program. Its total revenue amounted to $0.3 million, compared to year-over-year data of $0.2 million.

By the end of the quarter, the company had cash, equivalents and short-term investments that totaled $4.1 million.

Eveillard is the only Guru who has holding of Aradigm’s stock, which is down about 6.25 percent in this morning’s trading. Currently, Aradigm is priced at $0.12 per share.

It has a P/E (ttm) ratio of 0.4 and a P/S ratio of 29.2, which is close to its three-year high.

To view his latest trades, visit Jean-Marie Eveillard’s Stock Picks. Also view his undervalued stocks, high-yield companies and top growth stocks.

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About the author:

Dianne Tordillo
Dianne Tordillo is staff writer for GuruFocus.com. She reports on a variety of financial news, primarily dealing with investor portfolios and stock trades. Her articles also highlight insider trades, as well as the many useful features of GuruFocus.

Visit Dianne Tordillo's Website


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