Biotech Stocks Day-in-Review: Amgen Strikes Drug Deal With Cytokinetics

Amgen (AMGN) struck a deal with Cytokinetics (CYTK) to develop heart failure drugs based on cardiac myosin. Cardiac myosin is the cytoskeletal motor protein in the cardiac muscle cell that converts chemical energy into a mechanical force that causes the heart to contract. Amgen has an option on the entire cardiac myosin program at Cytokinetics, including CK-1827452, a drug candidate that has completed two Phase I trials. For the option Amgen will pay $75 million upfront, consisting of $42 million in cash and another $37 million investment in Cytokinetics stock.

After the drug has completed its Phase IIa trials, Amgen can in-license the compound and complete its development by paying $50 million more. Additional milestones total $600 million, plus royalties. Amgen does not currently have any drugs for heart failure, but it is testing its anemia drug, Aranesp, among heart failure patients. This program was clouded when recent studies among anemia patients showed Arenesp can cause heart problems. The news was enough to send Cytokinetics 11.5% higher rising 86 cents to $8.34. Cytokinetics has a market cap of $315 million. Amgen traded up 9 cents to $68.40.

Meanwhile, Genentech (DNA) inked a pact with Exelixis (EXEL) to co-develop cancer drug candidate XL518, a small-molecule inhibitor of MEK or mitogen activated protein kinase [MAPK] kinase. Activating the pathway is associated with tumor cell growth. Genentech will make a $40 million upfront payment to option the program. Exelixis, which submitted its Investigational New Drug application for the compound on December 20, 2006, will be responsible for Phase I development. If Genentech exercises its option to develop XL518 further, it will make an unspecified additional payment and take over responsibility for all development. Exelixis will retain the right to co-promote the drug in the US. Exelixis rose 5%. It climbed 47 cents to $9.45, while Genentech rose 67 cents to $81.80.

VaxGen (VXGN) sold its share in Celltrion for $51.3 million to its partners in the venture. Celltrion is a manufacturing facility in South Korea. Including the $49 million in net proceeds, VaxGen said it had $96.6 million in cash at the end of the year. VaxGen recently lost the $877 million contract to provide the US biodefense stockpile with anthrax vaccine when it could not provide a vaccine with the required shelf life. VaxGen shot 11.6% higher, moving up 22 cents to $2.12.

Theravance (THRX) began treating patients in a Phase II trial of TD-1792, a heterodimer antibiotic. The goal is to provide a treatment for complicated skin and skin structure infections that is more effective than the current standard of care, vancomycin. TD-1792 combines the antibacterial activities of a glycopeptide and a beta-lactam in one molecule. Theravance increased 47 cents to end at $31.36.

Medtronic (MDT) reported publication of data showing its Meniett Low-Pressure Pulse Generator was effective long-term in about two-thirds of patients suffering from Meniere’s disease. In patients who were not responsive to traditional medical treatment, the device provided a significant reduction in vertigo frequency. Medtronics slipped 83 cents to $52.57.

CoGenesys, a spin-out from Human Genome Sciences (HGSI), has asked European authorities to allow the start of human studies of Neugranin, a long-acting form of Granulocyte Colony Stimulating Factor [G-CSF]. The drug is aimed at reducing the incidence of infection in patients who are taking myelosuppressive anti-cancer drugs.

Amylin (AMLN) and Lilly (LLY) have received FDA approval to market Byetta, their glucose control drug for type 2 diabetes, as an add-on therapy for patients taking thiazolidinedione [TZD]. In tests, 62% of patients who added Byetta to TZD were able to achieve the goal of glucose levels of 7% or less, while only 16% of the patients who took TZD alone managed a 7% level. Byetta patients also lost an average 3.3 pounds over 16 weeks. Amylin was up 25 cents at $36.32, and Lilly gained 15 cents to end at $52.25.

Biotech spent much of the first session of the new year in positive territory, but a late slump took it slightly lower by the closing bell. The Centient Biotech 200™ was down 4 points at 3919, a loss of .10%. The broad market was split, with the S&P 500 falling .12%, but Nasdaq up by .33%

Disclosure: Author has no position in the above-mentioned stocks.