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Eisai, the large Japanese Pharma, will acquire privately held Morphotek of Philadelphia for $325 million over its net cash level. Formed in 2000, Morphotek humanizes monoclonal antibodies.

It has two drugs in early stage trials, one for ovarian cancer and another for pancreatic cancer, plus several molecules in pre-clinical tests. In October 2006, Eisai beefed up its cancer portfolio by buying four oncology drugs from Ligand (NASDAQ:LGND).

Adams Respiratory
(ARXT) settled a patent dispute with Mutual Pharma over guaifenesin extended-release tablets. Mutual acknowledged the validity of Adams’ patent, which runs until 2020, and Adams granted Mutual a license to sell the drug after July 1, 2012. Adams climbed 15% higher, rising $4.70 to $35.54.

PDI Inc. (NASDAQ:PDII), which runs a contract sales organization, lost one of its large contracts to market a drug for an unnamed pharmaceutical company. The contract, which runs until May 21, brought in $35 million per year. PDI thought the agreement would be extended to the end of 2007. PDI now expects to burn about $15 million this year, about $5 million higher that projected before the setback. PDI fell $1.01 to $9.43, a loss of 10%.

Pain Therapeutics (NASDAQ:PTIE) in-licensed technology for hemophilia from researchers at Stanford University. The technology uses gene integration to correct the genetic deficiency underlying the malady, so it requires one treatment instead of the periodic replacement procedures (once or twice weekly) that are currently used to treat hemophilia.

The company expects to have a novel drug candidate in 12 months. Pain Therapeutics will pay an upfront fee, milestones and 4% royalty (6% if the first product sale occurs before 2011) to license the technology from Poetic Genetics, which commercializes the work of Dr. Michele Calos. Pain Therapeutics was off 6 cents at $7.40.

Peregrine (NASDAQ:PPHM) reported positive early results from a Phase Ib trial of bavituximab as a second-line therapy for patients with metastatic forms of cancer. In 9 patients, more than half saw either disease stabilization (up to 30% tumor reduction) or objective tumor response (greater than 30% tumor response). Peregrine rose 7 cents to $1.06.

Cubist (NASDAQ:CBST) out-licensed the Japanese rights for its antibiotic Cubicin to Merck (NYSE:MRK). Cubist will receive $6 million upfront and $39.5 million in regulatory and sales milestones. Cubist will supply Merck with the drug. Cubist posted a gain of 44 cents, ending at $20.84.

GPC Biotech (GPCB) gave additional details about the Phase III trial of satraplatin at a scientific meeting in Germany. In the test, satraplatin was administered along with prednisone as a second-line treatment to 950 patients with hormone-refractory prostate cancer. The oral drug provided pain relief and extended progression-free survival. Satraplatin has been under FDA review since February. Spectrum Pharma (NASDAQ:SPPI) licensed the drug to GPC in 2002, and GPC sold the European rights to Pharmion (PHRM). GPC rose 45 cents to $28.57.

Bio Stem (BTEM.OB) will gain access to an inventory of 9,000 cord blood stem cell units when it acquires Cryobanks International [CII]. If these are used for transplantation, they are sold for between $19,000 and $22,500 per unit, making the acquisition worth up to $200 million. Cryobanks has another 3,000 units that it will make available to researchers. Cryobanks has a policy of providing stem cells only for non-controversial, non-cosmetic use, which under present government policy, means they cannot be sold. Bio Stem dropped 39 cents to $1.36, a loss of 22%.

Biotech extended its winning streak to four sessions with a small gain. The Centient Biotech 200™ added on 8 points to close at 3931, a rise of .25%. The S&P 500 was lower by .14% and Nasdaq was off .27%.

Disclosure: none.

Source: Biotech Day in Review: Eisai Buys Morphotek for $325 Million