Biotech Stocks Day-in-Review: Genentech Closes Third Deal This Week

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 |  Includes: AMGN, LLY, MTP, RHHBY, VRX
by: Centient Biotech Investor

For the third time this week, Genentech (Private:DNA) announced a deal with another biotech. This time, Genentech will partner with Swedish biotech BioInvent on a cardiovascular compound. Genentech will pay $15 million upfront, and the deal contains provisions for up to $175 million in milestone payments, plus royalties on sales in North America.
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BioInvent will retain rights to the drug, now known as BI-204, outside North America. BI-204 is in pre-clinical development for myocardial infarction or stroke. In pre-clinical tests, the compound reduced atherosclerotic plaque. BI-204 blocks a major mediator of vascular inflammation that is thought to help form unstable plaque in the vessel wall. Genentech slipped a little after yesterday’s post-earnings-announcement runup, dropping 57 cents to $86.83.

Stent maker Xtent [XTNT] set terms for its upcoming IPO. The company will seek to place 4.7 million shares in a $16 to $18 range, giving the company a market capitalization of $387.6 million at the midpoint. The company has been the beneficiary of $76 million in venture capital through its history, and existing investors paid an average of $4.22 per share. Xtent lost $17.9 million during the first 9 months of 2006.

Point Therapeutics (POTP) released interim data from its Phase II trial of talabostat, a drug candidate being given to patients with metastatic pancreatic cancer. Talabostat was administered as an adjunct to Gemzar from Lilly (NYSE:LLY). So far, in 21 patients with six months of follow-up, 48% have survived at least six months, which is the endpoint of the test. Of 31 patients who could be evaluated for tumor response, one had a complete response and two showed partial response.

The data was sufficiently positive to meet the prespecified threshold to complete the trial. The news sent Point Therapeutics 21% higher, rising 21 cents to $1.03.

Valeant Pharma (NYSE:VRX) in-licensed the Canadian rights to Xyrem from Jazz Pharma. Xyrem treats cataplexy, a sudden loss of muscle tone that results from narcolepsy. Valeant will make an upfront payment and pay royalties on sales. Valeant, which already has a neurology sales force, will launch the drug in mid-2007. Valeant was up 47 cents at $17.79.

Biotech closed at a new record high, helped in part by Amgen (NASDAQ:AMGN), which moved up almost 2%. The Centient Biotech 200™ gained 24 point to close at 4078, a rise of .58%. That level was 5 points over the old high, which was set during the first quarter of 2006. The S&P 500 climbed .49% and Nasdaq was up by .72%.

Note: We called Friday's closing price a record, but we overlooked a 4088 closing price, set on February 27, 2006. At Friday's final level of 4078, we still have 10 points to go before setting a new record. We regret the error.

Disclosure: Centient management holds a position in Genentech shares and does consulting work for Genentech.