Biotech Stocks Day-In-Review: Coley Drops After Ending Hepatitis C Program

Coley Pharma (COLY) axed its hepatitis C program, ending development of Actilon. The company will lay off 22% from its workforce or 33 people. In concurrent Phase I and Phase II tests, Actilon did not offer a substantial improvement over the current standard of care, interferon plus ribavirin.

Coley will turn its attention to a preclinical program specializing in synthetic RNA-based drugs that stimulate Toll-like receptors. Discontinuing the hepatitis C program will save Coley about $15 million per year in research expenses. The company says it has enough money to continue for three years without a fresh infusion of capital. Given the news, Coley did well to drop by only 11%. The stock was off $1.12 at $8.77.

The data safety monitoring committee recommended continuing a Phase II trial of an EntreMed (ENMD) drug. MKC-1 is being given to patients with metastatic breast cancer who have failed other therapies. The committee did not recommend any changes in the protocol, but said the levels of safety were appropriate for the nature of the disease. EntreMed in-licensed the drug from Roche (RHHBY) for breast cancer, while Roche is continuing to develop MKC-1 for non-small cell lung cancer and hematological malignancies. EntreMed moved up 4 cents to $1.66.

Medarex (MEDX) and Israeli biotech Compugen (CGEN) will collaborate to develop monoclonal antibodies to fight oncological and autoimmune diseases. The two companies will share development responsibilities and any revenues that their discoveries produce. Compugen will use its antibody-target discovery engine to identify targets, and Medarex will contribute its UltiMAb technology to humanize the antibodies. Medarex slipped 3 cents lower to $13.26, but Compugen was up 8%, gaining 20 cents to end at $2.64.

Pharmion (PHRM) submitted Thalidomide Pharmion for approval in Europe. The drug is seeking to be indicated for untreated multiple myeloma. Because of the birth defect side effects of Thalidomide, the submission includes the Pharmion Risk Management Programme as part of the documentation. Pharmion licensed the ex-US rights to the drug and its risk reduction protocols from Celgene (CELG). Pharmion rose 75 cents to $30.00.

Novavax (NVAX) said its virus-like particle vaccines were effective against two strains of avian flu (Indonesian and Vietnamese) in pre-clinical animal tests. A single vaccine produced an immune response against both forms of the H5N1 virus. The vaccines will begin human tests later in 2007. Novavax moved 12 cents higher to end at $4.21.

Neurocrine (NBIX) will re-submit its application for approval of its sedative indiplon before the end of Q2. The revised filing includes further analyzes of data and a review of the data by independent consultants. Neurocrine expects the FDA to spend 6 months reviewing the application. Instead of conducting a 3-month safety and efficacy study, Neurocrine will get ready for commercialization and a Phase IIIb/IV trial. It will also evaluate indiplon for sleep maintenance. In May 2006, Neurocrine received an approvable letter for the two smaller doses of indiplon, but the larger XR dose was deemed not approvable. The XR version targeted sleep maintenance. Neurocrine climbed 93 cents to $13.88, an increase of 7%.

Akorn (AKN) released positive data of a Phase III trial of Akten. The drug met its endpoints for ocular anesthesia and duration of effect. The company will file for FDA approval of Akten under 505(b) rules. Akorn was 12 cents higher at $6.29.

Shire (SHPGY) will out-license the North American rights for an HIV compound, SPD754, to the Australian biotech Avexa. Shire will receive an upfront payment of $10 million, plus milestones and royalties. Shire will also receive 8 million additional shares of Avexa, which will bring its ownership to 8% of the company. Avexa had previously in-licensed the non-North American rights to the drug. Shire inched up a penny to $66.07.

Accuray [ARAY], a company that is developing an intelligent robotic radiosurgery system that treats solid tumors, set the terms for its IPO. The company will make 13.3 million shares available in a $14-$16 range. At the midpoint, Accuray would be worth a substantial $885 million, plus the IPO would raise almost $200 million before fees and discounts.

Synta Pharma [SNTA] made its first filing to hold an IPO. Synta is developing drugs for chronic inflammatory diseases and cancer. Like Accurary, Synta will shoot for a $14-$16 range, offering 6 million shares. At $15 per share, Synta would be worth $500 million.

Optimer Pharma [OPTR], an anti-infectives company, will offer 5.25 million shares in a $12-$14 range in its IPO. The proposed range values the company at approximately $295 million.

In today’s session, the Centient Biotech 200™ dropped 23 points to 4076, a loss of .57%. The broad market went the other way, with the S&P 500 higher by .35% and Nasdaq practically flat, with a minuscule gain of .01%.

Disclosure: none.