Biotech Day In Review: CuraGen Gets $155 Million For Gene Sequence Division

by: Centient Biotech Investor
CuraGen (CRGN) sold its majority-owned 454 Life Sciences division to Roche (OTCQX:RHHBY) for $155 million. Roche Diagnostics has been the worldwide distributor of the Genome Sequencer systems produced by 454. Of the $155 purchase price, $140 million will be paid in cash, and another $14.9 million will come from the exercise of stock options.

Roche will put $25 million into escrow for 15 months. CuraGen will receive $85 million before fees and expenses, and $14 million of that will be held in escrow. Investors were not pleased with the terms; they sold the stock down to a 20% loss as CuraGen fell 77 cents to $3.07.

NeoPharm (NEOL) said the FDA will require another clinical trial before approving Cintredekin Besudotox for recurrent glioblastoma multiforme [GBM], a form of brain cancer. NeoPharm said it will “consider its options” about the drug. NeoPharm fell a further 11%. It was off 20 cents at $1.67.

Enzon Pharma (NASDAQ:ENZN) began treating patients in a Phase I trial of its HIF-1 alpha antagonist (EZN-2968). The drug will be administered to patients with advanced solid tumors or lymphoma. Enzon in-licensed the drug from Santaris (NASDAQ:SNTS) in July 2006 along with several other drug candidates.

Alnylam Pharma (NASDAQ:ALNY) sold a non-exclusive license for RNAi research products to Bio-Rad. The products are part of the Kreutzer-Limmer patnet family, which covers small interfering RNAs (siRNAs) and their use to mediate RNAi in mammalian cells.

Baxter International (NYSE:BAX) released final Phase I/II data for its avian flu vaccine. Without the use of an adjuvant, the vaccine was very immunogenic at low doses, and it was effective against diverse H5N1 strains. Baxter will move the drug into a Phase III test, whose results are expected at the end of 2007.

Targeted Genetics (TGEN) gained 66% on news that its Q4 revenues were up 100% or $2 million. The increase was enough to swing Targeted from a $3.6 million loss to a profit of $800,000. The company has $14.1 million in cash, which will not be enough to fund operations for 2007. Targeted rose $1.70 to end at $4.27.

Pain Therapeutics (NASDAQ:PTIE) will buy back $20 million of its stock in open market purchases. The company had $204 million in cash at the end of 2006.

Hollis-Eden (HEPH) filed an Investigational New Drug application to begin a trial of a next-generation drug for metabolic disorders, including diabetes, obesity and dyslipidemia. If HE3286 passes its safety tests, Hollis-Eden expects to put the drug in tests for type 2 diabetes and rheumatoid arthritis. In pre-clinical studies, HE3286 has reduced inflammation, which is common to both metabolic and autoimmune disorders.

Avanir Pharma (NASDAQ:AVNR) will restructure its operations to focus on approval of Zenvia, its treatment for diabetic neuropathy that is currently in a Phase III trial. Avanir will hand over its partnership responsibilities in the Macrophage Migration Inhibitor Factor [MIF] program to Novartis (NYSE:NVS), and stop further development of reverse cholesterol transport enhancing compounds with AstraZeneca (NYSE:AZN). In the latter collaboration, all compounds will revert to Avanir. The company may also sell off some of its programs to raise cash. Avanir fell 15%, losing 22 cents to close at $1.20.

Biotech opened higher, sold off, and then ended the day with a gain. The Centient Biotech 200™ climbed 12 points to 3863, a rise of .33%. The S&P 500 was .37% higher, and Nasdaq was up a miniscule .03%.

Disclosure: none.