Cardiome Pharma Corp. (NDAQ: CRME) shares moved sharply higher today after the company announced positive phase IIb results for its oral Vernakalant drug. The experimental drug reduced the rate of abnormal heart rhythms in patients with recurrent atrial fibrilation - a condition in which the heart's top two chambers quiver instead of beating regularly, thereby reducing the heart's ability to pump blood efficiently.

Cardiome said it would move forwards with phase III study and seek a development partner or strategic buyer for the entire company. Investors clearly applauded the move since the likelihood of a strategic buyer is substantially higher with every development milestone that they pass. These latest results demonstrated that the dosing group significantly reduced the rate of arrial fibrillation relapse as compared to the placebo group.

"We are delighted to report clearly positive clinical results from our vernakalant (oral) program, which continue to support our belief in the exciting potential of vernakalant as a therapy for atrial fibrillation," said Bob Rieder, Chairman and Chief Executive Officer of Cardiome. "With 949 patients and subjects exposed to vernakalant (oral) in this development program, we now have an extensive safety and efficacy dataset to guide us as we move this exciting clinical program forward and finalize our strategic discussions with interested parties."

Shares of Cardiome Pharma rose 27.46% to $10.63 on the news today.

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Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) shares are finding themselves under increased pressure as concerns about liquidity continue to mount. Many regulators are now calling for government intervention in order to save the government-subsidized entities and preserve the struggling housing market from a larger collapse. Unfortunately for shareholders, federal bailouts are only aimed at saving the company and not necessarily its shareholders.

A government takeover of both organizations is among several options being weighed by the Bush Administration. Officials may push for the firms, which own or guarantee almost half of the $12 trillion in home loans in the United States. Such a government takeover is likely to make the common stock of each company worthless, since paying off shareholders with taxpayer dollars may present a problem to perhaps everyone in the USA (minus those shareholders).

Fannie Mae has lost about 80 percent of its value during the past year while Freddie Mac has tumbled more than 85 percent during the same time. The reason is simply because many of these loans are going bad and requiring the companies to come up with capital that they are unable to raise. The government is expected to wait until these losses hit some $77 billion before it would be compelled to start a rescue.

Others insist that a government bailout would be unlikely because the two institutions have some $1.5 trillion in un-pledged assets and access to the debt market. Some insist that Fannie Mae would have to lose $40 billion immediately and Freddie Mac would have to lose $37 billion immediately in order to be considered insolvent. Housing prices would have to decline 40% nationally and delinquencies would have to rise as much as 10 fold to 12 percent to reach critical levels, according to these analysts.

In the end, there is still a lot of uncertainty as to whether or not the two housing market giants are in trouble. If they are, however, it is clear that shareholders will likely lose out in the event of a bailout. The only people that can hope to get their money back would be bond holders.

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Rohm and Haas Company (NYSE: ROH) shares surged over 65 percent today after rival Dow Chemical (NYSE: DOW) agreed to purchase the company for $15.3 billion. The $78 per share takeover deal includes funds from a Kuwaiti sovereign wealth fund and Warren Buffett's own Berkshire Hathaway. The 74 percent premium may seen hefty to some shareholders, but Dow Chemical executives insist that the strong brands and technologies make the premium worth paying.

The acquisition represents Dow Chemicals' efforts to expand higher-margin specialty chemical markets, which can help protect it from the ups and downs of basic chemical sales. Recently, the company has been struggling with the performance of its basic businesses due to increases in raw material costs that it has tried to pass on to consumers. This deal will make Dow the largest specialty chemical and advanced materials company in the world.

So, just how much will this magic deal help Dow in the future? Well, some analysts are expecting a big boost. Before the deal, analysts have been expecting Dow to earn around $3.50 per share in 2010 and 2011 during the industry trough, but now they are expecting around $4.50 per share. Meanwhile, in 2015 when dow forecasts the peak, EPS is expected to exceed $10 per share. Meanwhile, Dow expects to realize pretax annual cost synergies of at least $800 million per year.

In the end, many investors view this as a very positive move and do not believe that Dow overpaid. The company has entered into a higher-margin business, which should boost growth and earnings multiples. Meanwhile, the move also helps the company realize cost benefits through economies of scale.

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