Biotech Index Hits A Multi Year High

The AMEX Biotech Index (BTK) hit a multi year high today at $765.26

CV Therapeutics Inc (CVTX) after Tuesday's closing bell reported a third-quarter net loss of $62.7 million, or $1.23 a share, compared with $55.9 million, or $1.26 a share, during the same period a year ago. The Palo Alto, Calif.-based biopharmaceutical company posted operating revenue of $12.2 million vs. $4.14 million. Analysts polled by Thomson First Call had forecast a third-quarter loss of $1.44 a share on revenue of $12 million. Additionally, the company said it recorded $8.2 million of net product revenue for sales of its chronic angina treatment Ranexa during the quarter, compared with $1.2 million during the previous quarter ended June 30.

Biomira Paying $3 Million in Cash, Plus Stock and Milestones for ProIX Pharmaceuticals

Biotechnology company Biomira Inc. said Tuesday it bought privately held ProIX Pharmaceuticals Corp. in a cash and stock deal.

The Canadian company said it will pay $3 million in cash and just under 17.9 million shares of common stock for ProIX, which is based in Tucson, Ariz., and Houston. Additionally, Biomira will pay an another $5 million worth of common stock when ProIX starts a Phase III clinical trial of a product. Another payment of $10 million in common stock is due upon approval of a product for a major market.

ProIX is developing novel cancer treatments. Biomira said the acquisition will help boost its clinical development programs, which also focus on treating solid tumors.

ProIX is expected to have one product, called Stimuvax, in Phase III clinical trials by year end.

Shares of Biomira rose 9 cents, or 7.7 percent, to close at $1.26 on the Nasdaq. The stock has traded between 85 cents and $2 over the past year.

The Food and Drug Administration accepted Bionovo Inc.'s protocol for an early-stage clinical trial of BZL101, a drug for metastatic breast cancer.

Emeryville-based Bionovo (OTCBB BNVI) said Tuesday that the Phase I/II trial will be run at 10 centers in the United States. The company will enroll the first patients in the trial next year in the first quarter. Dr. Debu Tripathy of the University of Texas Southwestern Medical Center in Dallas will be the principal investigator in the trial.

Tripathy worked previously on Herceptin trials for Genentech Inc. (NYSE DNA)

Biopharmaceutical firm Dyax Corp. said Wednesday the company has a granted a non-exclusive license to its library of antibodies to ZymoGenetics Inc.

Dyax (Nasdaq DYAX), headquartered in Cambridge, Mass., has issued non-exclusive licenses to other companies in the past as well. The arrangement allows Dyax to generate near-term revenue as well as potential milestones and royalties on future products, the company said in a statement on the agreement.

Seattle-based ZymoGenetics will pay Dyax upfront and annual technology license fees, clinical milestone payments, and royalties on net sales of products that may result of ZymoGenetics use of the Dyax library, Dyax said.

Biotechnology company Biogen Idec Inc. said Tuesday its third-quarter profit surged on strong drug sales to beat Wall Street expectations, and raised guidance for the full year.

Net income grew to $156.6 million, or 45 cents per share, from $27.2 million, or 8 cents per share, a year ago, when the company incurred hefty merger and restructuring costs. Excluding one-time charges and stock option expenses, the company reported a profit of 60 cents per share for the latest quarter.

Revenue rose 18 percent to $703.5 million from $596.2 million last year, driven by sales of interferon drug Avonex, which grew 19 percent to $445 million, and sales of arthritis treatment Rituxan, which increased by 12 percent to $204 million from last year.

Analysts surveyed by Thomson Financial expected earnings per share of 49 cents on revenue of $681.3 million. Estimates exclude both one-time charges and stock option expenses.

Biogen Idec also raised its earnings per share guidance above $2.20 for the year, excluding items. Previously, the company forecast earnings of $1.95 to $2.10. Analysts forecast earnings per share of $2.09.

Merck & Co. Inc. on Monday said it agreed to acquire biotechnology firm Sirna Therapeutics Inc. for $1.1 billion in cash to gain a stronger foothold in the promising drug-development technology of RNA interference.

Merck agreed to pay $13 per share for Sirna -- more than double Monday's Nasdaq closing stock price of $6.45.

After the stock market closed, shares of Sirna nearly doubled in extended trading to $12.67. Shares of the stock doubled during several minutes of after-hours trading following the announcement and before Nasdaq halted trade.

Sirna has been working to create a new class of medicines based on RNA interference technology and has shown "great promise" in the area of cancer research, Merck said.

"RNA interference is a hot area of drug development, although it will probably take another five years for any significant drug using the technology to gain visibility," said Mehta Partners analyst Shaojing Tong. He speculated Merck was buying Sirna more for its know-how than its few early-stage experimental drugs.

RNA, or ribonucleic acid, is the molecule that transmits the genetic information encoded in DNA.

By using chemically altered double-stranded RNA molecules as drugs, the technology is meant to block production of proteins linked to an array of diseases -- including cancer, hepatitis C and respiratory ailments.

Merck has an ongoing drug-development partnership with Alnylam Pharmaceuticals Inc. , which many analysts consider the leader in RNA interference because of its large number of patents.

But that partnership suffered a setback last year when Alnylam suspended development of its experimental drug to treat the leading cause of blindness. Alnylam cited competition from other recently approved treatments for the condition, the "wet" form of macular degeneration.

Sirna's lead product, now in mid-stage trials, is attempting to fight the same eye condition. The drug, Sirna-027, is being studied as part of a collaboration with Allergan Inc. into diseases of the eye.

Sirna also has a strategic alliance with GlaxoSmithKline for the development of compounds for the treatment of respiratory diseases.

Sirna also has programs in areas such as infectious diseases, metabolism, and dermatology, Merck said.

Earlier this month, Americans Andrew Fire and Craig Mello won the Nobel Prize in Medicine for their discovery of RNA interference.

Focusing on RNA interference technology has given Sirna a novel approach to discovering drugs with the potential to produce highly specific, potent, and long-lasting effects, Merck said.

The deal is expected to close in the first quarter of 2007.

Repligen Corp. said Monday it has started a clinical study to evaluate the usefulness of RG1068, synthetic human secretin, in non-invasive tests to detect early stage pancreatitis.

The Waltham, Mass-based pharmaceutical company (Nasdaq RGEN)) said the study aims to discover if patients with pancreatic disease have reduced pancreatic fluid production in response to stimulation by secretin. The secretin would be used when a patient has an MRI, or magnetic resonance imaging, of the pancreas, which is less invasive than endoscopy, a procedure often used evaluate and treat diseases of the pancreas and gallbladder.

"The use of a non-invasive procedure such as MRI to quantify pancreatic fluid production following secretin administration harnesses the natural biologic properties of the hormone and may improve the diagnostic quality of the MRI image," the company said in statement.

Point Therapeutics Inc shares jumped 22% to $1.53 in Monday morning trade after the Boston-based biopharmaceutical company said new data in an osteosarcoma model demonstrated that mice treated with talabostat, the company's lead product candidate, had a four-fold decrease in the number of primary tumors compared to saline treatment.

In a separate experiment, the company said mice treated with talabostat had a 20-fold decrease in the number of metastatic lung nodules. The studies were presented at the annual meeting of the International Society for Biological Therapy of Cancer Development in Los Angeles.

Genta Inc. said Monday the Food and Drug Administration will take another 90 days to review its marketing application for the cancer drug Genasense after the drug developer presented the agency with additional data.

Shares of Genta rose nearly 6 cents, or 8 percent, to 86 cents in pre-market activity on the INET electronic exchange. Shares have fluctuated between 35 cents and $3.48 over the past 52 weeks.

In September, an FDA advisory panel recommended that the agency not approve Genasense, questioning the significance of the drug study's primary endpoint. Uncertainty about the data drove Genta's share price down 63 percent over two days to close at 51 cents on Sept. 6.

The agency will now render a decision on the drug by Jan. 29, rather than Oct. 29, according to the company. Genta requested a meeting with the FDA and said the agency will consider the new data in the application.

Genta said the new information reinforces the conclusion that Genasense significantly increased the number of lasting remissions in leukemia patients compared with using chemotherapy alone.

Maxygen Inc. said Friday it expects to receive about $17.8 million in cash in exchange for its equity interest in Avidia Inc. in connection with Avidia's acquisition by Amgen Inc.

Redwood City-based Maxygen (NASDAQ MAXY) said that in addition, it may receive up to $2.8 million more based on contingencies relating in part to the development of Avidia's lead drug, an interleukin 6 inhibitor designed to treat inflammation and autoimmune disease.

The acquisition of Mountain View-based Avidia by Thousand Oaks-based Amgen (NASDAQ AMGN) was completed on Oct. 24.

Under an agreement that Maxygen entered into with Avidia at the time of Avidia's formation, Maxygen retains exclusive rights to use Avidia technology to develop and commercialize products directed to more than 10 targets.

In July 2003, Maxygen, Dr. Pim Stemmer and a third-party investor formed Avidia as a spinout company from Maxygen. In connection with the spin-out, Maxygen transferred to Avidia certain technology and obtained exclusive licenses to use Avidia technology to develop and commercialize human therapeutic products for certain specific targets.

In September, Amgen agreed to buy venture-backed Avidia, a company with a drug candidate for autoimmune disease in Phase I trials, for $290 million in cash.

Biotech Sector Continues To Surge

The AMEX Biotech Index (BTK) made a tremendous move over the past 30 days, advancing by more than 100 points.

Biotechnology company Genzyme Corp. said Friday it extended a $580 million tender offer for AnorMed Inc. by one day in order to coincide with the expiration of a regulatory antitrust waiting period.

Cambridge, Mass.-based Genzyme pushed the offer date to the morning of Nov. 7 from Nov. 6. The waiting period under the Hart-Scott-Rodino Act expires just before midnight Nov. 6, barring a request for more information or early termination by the Federal Trade Commission.

As of Oct. 27, just over 52,000 AnorMed shares had been tendered and not withdrawn to Genzyme, the company said.

AnorMed has already agreed to the all-cash buyout offer, which breaks down to $13.50 per share. Genzyme won a bidding war against Millennium Pharmaceuticals Inc. for the Canadian biotech firm, which is developing Mozobil, aimed at promoting stem cell production.

Shares of Genzyme fell 87 cents to $68.80 in afternoon trading on the Nasdaq while shares of AnorMed shed 2 cents to reach $13.41 per share.

A Citigroup analyst on Friday cut her rating on Invitrogen Corp., after the maker of laboratory research products reported lower-than-expected results for the third quarter and issued disappointing guidance.

Invitrogen on Thursday said it swung to a third-quarter loss due to a charge, but booked $311 million in revenue, in line with consensus estimates.

Excluding the charge, but including stock-option expense, the company earned 72 cents per share, while analysts polled by Thomson Financial were expecting higher profit of 78 cents per share. In a conference call, the company guided for a fourth quarter similar to its third-quarter performance.

Citigroup analyst Elise Wang in a client note cut her rating to "Hold" from "Buy" and slashed her target price to $68 from $86.

"All else equal, we would be buyers if the stock drops into the low to mid-$50s range," wrote Wang.

The Wall Street estimate for fourth-quarter revenue is $337.8 million, much higher than the $311 million the company implied.

She said Invitrogen's disappointing guidance stems from lower margins of 58 percent, compared with the analyst's 62 percent forecast, due to manufacturing variances and an unfavorable product mix.

"Furthermore, although the company indicated it has nearly completed its strategic review of its business, management did not provide sufficient clarity on the potential steps it may take to improve next year's outlook given recent operating margin pressures," Wang wrote.

Idenix Pharmaceuticals Inc., a maker of drugs to treat viral and infectious diseases, on Friday reported a wider third-quarter loss as expenses rose sharply.

The company, which earlier this week received approval for a hepatitis B drug, posted a loss of $19.7 million, or 35 cents per share, missing Wall Street's consensus estimate of a 34-cent loss by a penny. Last year, the loss totaled $13.7 million, or 28 cents per share.

Revenue increased 26 percent to $19.6 million from $15.6 million, falling short of the average analyst estimate of $22.1 million.

Research and development costs rose to $26.1 million from $21.5 million, while selling and administrative expenses jumped 77 percent to $15.9 million.

Idenix said it expects to finish the year with $170 million to $190 million in cash, cash equivalents and marketable securities.

The company's shares added 9 cents to $9.97 in recent trading on the Nasdaq.

Drug developer Schering-Plough Corp. said an ongoing study of its hepatitis C treatment showed sustained viral suppression in 56 percent of patients after nearly a year on the drug.

The company's statement comes on the heels of an announcement by possible future competitor Idenix Pharmaceuticals, touting the effectiveness of its hepatitis C treatment in a clinical trial. Both companies are presenting data at the annual meeting of the American Association of the Study of Liver Diseases in Boston.

The 48-week study involves more than 2,200 patients receiving Peg-Intron and Rebetol, following failed treatment with other combination therapies. Both drugs are already approved by the Food and Drug Administration.

Shares of Schering fell 40 cents to $22.38 on the New York Stock Exchange in morning trading. Shares of Idenix rose 9 cents to $9.97 on the Nasdaq.

Critical Therapeutics, Inc. (Nasdaq CTRX) today announced it has entered into definitive agreements with institutional investors to sell 7,455,731 shares of common stock and warrants to purchase 3,727,865 shares of common stock for an aggregate purchase price of $20 million. The warrants to purchase common stock have an exercise price of $2.62 per share and will be exercisable at any time on or before October 26, 2011.

The Company expects that the net proceeds of the offering will be approximately $18.5 million after deducting the placement agent's fees and all estimated offering expenses that are payable by the Company, excluding the proceeds, if any, from the exercise of the warrants issued in the offering. The Company currently intends to use these proceeds to fund its efforts to obtain U.S. Food and Drug Administration approval for, and to prepare for commercial launch of its controlled-release formulation of zileuton if approved, to fund development of the intravenous formulation of zileuton and for other general corporate purposes.

In connection with this offering, on October 26, 2006, the Company entered into a placement agent agreement with Lazard Capital Markets LLC, pursuant to which it agreed to act as the Company's placement agent and the Company agreed to pay a fee of $1.2 million upon the closing of the offering. Copies of the final prospectus may be obtained from Critical Therapeutics, Inc., 60 Westview Street, Lexington, Massachusetts 02421, Attn: Vice President, Investor & Media Relations or by contacting Lazard Capital Markets LLC at 30 Rockefeller Plaza, 60th floor, New York, NY 10020.

The Company has filed a shelf registration statement relating to these securities, which the Securities and Exchange Commission has declared effective.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company and these securities cannot be sold in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.

About Critical Therapeutics

Critical Therapeutics, Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of products for respiratory, inflammatory and critical care diseases. The Company owns worldwide rights to the asthma drug ZYFLO® (zileuton tablets), as well as the controlled-release and intravenous formulations of zileuton. ZYFLO is the only 5-lipoxygenase inhibitor approved for marketing by the U.S. Food and Drug Administration.

Shares of Millennium Pharmaceuticals rose Thursday as the company substantially narrowed its third-quarter loss, and said it expects its full-year loss to be half that previously forecast.

The early morning release also revealed plans by the Cambridge, Mass., company to cut back spending on its research and development, including cutting 14 percent of it staff, leaving about 1,000 employees. The cuts are being made so the company can increase focus on its only commercial drug, Velcade. Millennium also said it is expanding an agreement with a subsidiary of Johnson & Johnson to co-promote the drug within the United States.

Shares of Millennium rose 61 cents, or 585 percent, to $11.07 in afternoon trading on the Nasdaq. The stock has traded between $7.83 and $11.46 the last 52 weeks.

The company's earnings report was a mixed bag. Its loss for the three months ended Sept. 30 narrowed to $13.7 million, or 4 cents per share, compared with a loss of $73.8 million, or 24 cents per share, in the corresponding quarter last year.

On an adjusted basis, the company said its loss was 2 cents per share.

Analysts polled by Thomson Financial expected a loss of a penny per share.

Revenue fell 48 percent, to $104.1 million from $201.7 million. Analysts expected revenue of $111 million. Sales of Velcade, a bone cancer treatment, increased to $53.2 million.

The quarterly improvement was mostly attributable to lower restructuring charges, Millennium said. It updated full-year guidance, and now expects to lose between $50 million and $60 million, compared with previous projections for a $95 million to $115 million loss. Velcade sales estimates were lowered to about $220 million from between $225 million and $250 million, while royalties projections were boosted to between $130 million and $135 million, from $115 million and $125 million.

The earnings guidance boost is based on an expected $25 million milestone payment from Johnson & Johnson and a $19.5 million payment from AnorMed Inc. for the termination of a buyout deal.

JP Morgan analyst Geoffrey Meacham reaffirmed an "Underweight" rating for Millennium, saying weak Velcade sales overshadowed earnings upside. He also expects Velcade sales to further erode because of competition from Celgene's Revlimid.

"More robust promotion of Velcade is unlikely to dramatically alter this dynamic," he wrote in a note to investors.

Drug developer Celgene Corp. said Thursday its profit grew in the third quarter as sales nearly doubled.

The company earned $20.4 million, or 5 cents per share, compared with $668,000, or break-even on a per-share basis, a year ago. Excluding stock option expenses, the company earned 15 cents per share.

Analysts polled by Thomson Financial expected profit of 14 cents per share, excluding stock option expenses.

Revenue jumped 89 percent to $223.1 million from $113.9 million a year ago. Analysts forecasting revenue of $228.5 million.

Sales of the company's lupus and multiple myeloma drug Thalomid were $108.4 million, while multiple myeloma and anemia treatment Revlimid brought in $101.3 million in sales.

Research and development costs jumped 29.8 percent to $64.1 million during the quarter. The company is conducting several Phase II and Phase III clinical trials for Revlimid as a candidate in treating several types of cancers. The company also is conducting several early stage studies on a variety of compounds.

Titan Pharmaceuticals Inc. said Wednesday it started a Phase III clinical trial of a drug to treat opioid dependence, and discontinued a Phase II trial of a drug for congestive heart failure.

South San Francisco-based Titan (AMEX TTP) has about 50 workers and seeks drugs for nervous system disorders, heart disease and bone diseases.

This drug, Probuphine, is meant to replace current treatments for opioid dependence with better results because of a more even delivery of the drug. More clinical studies will start next year as part of this program.

Titan will stop a Phase II trial of a treatment for congestive heart failure, though it will analyze data from the trial. The Department of Veteran's affairs will also terminate its own cooperative study of the congestive heart failure treatment.

Titan did not elaborate on its reasons for ending this trial, saying only it intended to focus on the Probuphine trial.

Biotech drug developer Targeted Genetics Corp. said Wednesday it has been issued an additional patent related to its adeno-associated virus vector technology.

The announcement sent shares of Targeted Genetics up 6 cents, or 3 percent, to $2.01 in morning trading on the Nasdaq. Over the past year, Targeted Genetics shares have traded between $1.71 and $7.

The patent describes the use of adeno-associated virus vectors that are more efficient for expression of therapeutic genetic constructs, Targeted Genetics said.

The company is developing treatments for inflammatory arthritis, HIV/AIDS and other acquired and inherited diseases.

Ariad Pharmaceuticals Inc., a developer of cancer treatment drugs, said Wednesday it completed the sale of 3.1 million of its common shares to sole underwriter Credit Suisse Securities LLC at $4.65 per share for proceeds of $14.5 million.

The company will receive proceeds of $14.3 million after deducting expenses of the offering.

Credit Suisse has the option to buy up to an additional 466,942 shares in the offering, which expires on Nov. 18.

Shares of Ariad shed 4 cents to $4.62 in morning trading on the Nasdaq.

Biotech drugmaker ImClone Systems Inc. said Wednesday that it named financier Carl Icahn as its new chairman and reported its third-quarter earnings rose 85 percent-- results that far exceeded analysts' expectations.

The company said Joseph L. Fischer resigned as interim chief executive, a position he has held since the beginning of the year, and as a board member. Icahn had been seeking to remove him and three other directors from the board.

Fischer will be replaced by a newly formed Executive Committee of the Board, chaired by board member Alex Denner, who works for Icahn.

The three other directors Icahn sought to expel -- Dr. Vincent T. DeVita Jr. , John A. Fazio and William R. Miller -- will not run for re-election to the board at the next annual meeting in the first quarter of 2007 , the company said.

As a result, Icahn withdrew his proxy statement filed in September to remove half of ImClone's board. Now that three of the six directors Icahn sought to remove are gone, the board is primarily comprised of his allies. Icahn owns about 14 percent of the company.

ImClone's net income grew to $57.3 million, or 65 cents per share, from $31 million, or 35 cents per share, a year ago.

Revenue rose 42 percent to $150.7 million from $106.5 million last year. ImClone's only product, cancer drug Erbitux, is marketed with Bristol-Myers Squibb Co., which owns roughly 17 percent of the biotech company.

Royalty revenue from Bristol-Myers rose 69 percent to $78.6 million from $46.6 million last year. Bristol-Myers reported Erbitux sales of $174.6 million, compared with $107 million a year ago.

Analysts surveyed by Thomson Financial expected earnings per share of 45 cents per share on revenue of $163.3 million.

Banc of America analyst David Witzke, who rates the company a "buy," said in a research note that ImClone beat his forecast and the Street's because of significantly lower-than-expected research and development and selling, general and administrative costs.

ImClone's R&D costs fell 9 percent to $26.4 million, and SG&A expenses declined 19 percent to $16 million from last year.

Witzke said Fischer's resignation is a positive development because he had lost the confidence of investors and the internal management team.

However, Cowen & Co. analyst Eric Schmidt, who rates ImClone "Underperform," said in an interview that Icahn's rise to chairman may be "too little, too late."

"I agree in part with (Icahn) that the company was poorly run, but he may have missed his window of opportunity," Schmidt said.

In a note, the analyst called reported earnings per share "an essentially meaningless figure," and that the only number of significance was the $174.6 million in end-user Erbitux sales, compared with his estimate and analyst consensus of $185 million.

Schmidt said that ImClone seems poorly prepared to defend itself from Amgen Inc.'s competing drug Vectibix and that the shake up at ImClone will aid Amgen in its sales. Schmidt also rates Amgen as "Outperform."

Icahn appointment comes following the departure of former chairman David M. Kies and board member William W. Crouse resigned earlier this month amid squabbles between the company and Icahn.

In September, Icahn moved to remove half of Imclone's board because he said they have done a deplorable job running the company.

Among Icahn's criticisms was the failure of the board to lure a talented industry executive to ImClone's helm.

ImClone was at the center of the insider trading scandal that sent domestic diva Martha Stewart to prison for several months. The company's founder and former chairman, Sam Waksal, remains in prison.

Shares of ImClone rose 21 cents to $29.66 on the Nasdaq.

Life sciences company Cambrex Corp. on Tuesday said it has agreed to sell two of its businesses to Switzerland's Lonza Group AG for $460 million following a review of its operations.

Cambrex said it is selling its bioproducts and biopharma businesses, which accounted for 42 percent of revenue in 2005, to focus on its human health operations.

The bioproducts business makes and sells research, therapeutic and analytical testing products that are based on cell biology and used in drug discovery and biotherapeutic manufacturing. The biopharma business handles contract biopharmaceutical manufacturing and process development.

Cambrex plans to use the $450 million in proceeds from the sale, plus an additional $125 million to $150 million from expected new lines of credit to pay a special dividend to shareholders. Cambrex currently expects the special dividend to be about $13.50 to $14.50 per share.

Cambrex said the decision to focus on its human health business, which makes active pharmaceutical ingredients and intermediates used in over-the-counter and prescription drugs, as well as intermediates for cosmetics and food additives, follows a review begun in February. Cambrex said it plans to reduce overhead at the human health business by $8 million per year while boosting its position in certain niche markets through internal development and acquisitions.

Lonza's chief executive, Stefan Borgas, said the acquisition was the largest in his company's history, and the company aims to build itself into one of the world's largest suppliers of ingredients to the pharmaceuticals industry.

Tuesday's announcements comes just days after Cambrex announced the sale of units based in Cork, Ireland and Landen, Belgium.

The U.S. biotechnology industry is verging on profitability and outperforming pharmaceutical companies in some areas but faces tough challenges, biotech industry experts said Monday.

The number of U.S. approvals of new drugs last year hit 18 for biotech companies, versus only 11 for traditional drug companies, consultants told about 800 attendees at the sixth annual joint conference of the New Jersey and Pennsylvania biotech trade groups.

Two of the top 10 medicine makers in the world by revenue now are biotech companies, Genentech and Amgen.

Revenues of U.S. biotech firms topped $50 billion last year, up almost 16 percent -- double the 8 percent growth rate of their big brother drug makers. And biotech firms are getting a bigger share of venture capital in the life sciences field: 17 percent last year, about four times the percentage in 1999.

U.S. biotech companies are still in the red, but their combined net loss dropped 40 percent to about $4 billion in 2005.

"The sector is closer to profitability than at any point in the past," said Keith Brownlie, a life science industry expert at consultant Ernst & Young.

He noted the biotech industry this year marked its 30th anniversary, with its birth considered to be the April 1976 founding of Genentech Inc. of South San Francisco.

In New Jersey, the 29 publicly traded biotech companies had a combined $1.45 billion in revenues last year, up 11 percent from 2004, and their market capitalization jumped 38 percent to nearly $17 billion. Their combined net loss was down 16 percent to $494 million.

In eastern Pennsylvania, 11 publicly traded companies saw their combined revenues climb 18 percent to $1.42 billion, and their market capitalization rose 11 percent to $6.9 billion. Their combined net loss was rose 20 percent to $488 million.

Most biotech companies in the neighboring states are privately owned, and figures on their performance were not available.

While venture capital has generally been difficult to raise as investors seek safe options, Brownlie said New Jersey and Pennsylvania biotechs pulled in $506 million last year, up from $161 million in 2004.

Despite that, about two-thirds of investment in U.S. biotech companies now comes from mergers and acquisitions.

"Companies are saying that M&A is their exit strategy," Brownlie said.

That's because if a company survives to get a drug on the market, the pressure to then turn a profit each quarter limits investment in developing another drug to an unworkable level, said C. Boyd Clarke, a general partner at Five Lakes Venture Partners and former chief executive of Neose Technologies of Horsham.

Unless you can afford to buy rights to a product in late-stage development from another company, Clarke said, "you're going to look for someone to buy you."

The experts said this is one reason the industry now has some Fortune 500 companies and many small startups, but fewer mid-size companies.

Other looming challenges for biotechs include increasing pressure from both government and managed care insurers to hold down prices of genetically engineered drugs, which are more expensive to make than chemically synthesized pills, normal ups and downs in business cycles and, in this region, creating a more entrepreneurial culture, a panel of experts said.

Brownlie said pending changes in U.S. patent law could hamstring small biotech firms.

Amgen Inc.'s third-quarter earnings surged 15 percent and exceeded Wall Street expectations Monday even as the world's largest biotechnology company ramped up research spending.

Amgen reported earnings of $1.1 billion, or 94 cents a share, compared with $967 million, or 77 cents a share, in the same period last year.

Excluding special charges, including stock option expenses, the Thousand Oaks-based company said it would have earned $1.22 billion, or $1.04 cents a share.

On that basis, the earnings exceeded Wall Street analysts' expectations by 6 cents, according to a survey by Thomson Financial. The company also increased its earnings-per-share guidance for the year to $3.85 to $3.95, from $3.75 to $3.85.

Amgen's revenue for the quarter rose 15 percent to $3.61 billion from $3.15 billion in the same quarter last year. Sales of the company's flagship drug Aranesp soared 27 percent to $1.07 billion in the quarter. Aranesp treats anemia, including in cancer patients undergoing chemotherapy treatment.

The company released the financial report after the markets closed.

The rosy earnings report came even as concern mounted that it will be difficult for the company to sustain the profit momentum it has enjoyed over the last several years as patents expire over the next decade and amid competitors' legal challenges.

That's why the company has dramatically increased research spending, including a 49 percent jump to $835 million from $559 million in the third quarter. For the year, the company said it expects to increase research and development spending by 30 percent to 40 percent over last year and is beefing up its scientific staff.

"Every company in our business has to continually invest in their own future," Chief Executive Kevin Sharer said in a telephone interview with The Associated Press. "We have some big patents that are going to expire in the U.S. and we want to be ready for that."

Amgen Inc. (AMGN), the world's largest biotechnology company, on Monday reported higher third-quarter profit, fueled by double-digit increases in sales of its anemia drugs.

The company, which last month won U.S. approval for its highly anticipated new colon cancer drug, Vectibix, posted a net profit of $1.10 billion, or 94 cents per share, compared with a profit of $967 million, or 77 cents per share, a year ago.

Excluding stock options expenes and other items, Thousand Oaks, California-based Amgen posted adjusted earnings of $1.04 per share, while analysts on average had expected 98 cents per share, according to Reuters Estimates.

Biotech drug developer Replidyne Inc. and drugmaker Forest Laboratories Inc. said Monday the Food and Drug Administration won't approve their antibiotic faropenem medoxomil without further clinical trials.

The companies estimate that the required studies will add at least two years to the development of the antibiotic.

Replidyne and Forest, which partnered on the drug in February, are trying to get the antibiotic approved for acute bacterial sinusitis, community-acquired pneumonia, acute exacerbation of chronic bronchitis and uncomplicated skin infections.

While data from 11 late-stage clinical trials and more than 5,000 patients were submitted to the FDA, the companies believe that the FDA has recently started preferring superiority studies -- where a new drug has to be shown better than standard care -- for antibiotics.

The FDA recommended new clinical studies for all indications sought; there were no safety or manufacturing concerns.

Replidyne said it is in a strong financial position to continue developing the antibiotic with Forest. The companies plan to discuss development plans further with the FDA.

Forest shares fell $3.47, or 6.7 percent, to $48 in premarket activity on the INET electronic exchange, after closing Friday at $51.47 on the New York Stock Exchange. Replidyne shares, which trade on the Nasdaq, closed Friday were unchanged in premarket activity.

Biopharmaceutical company Iomai Corp. said Monday it is going to raise about $10 million through a private placement of common shares to Essex Woodlands Health Ventures and New Enterprise Associates.

"The funding from Essex and New Enterprise gives us additional resources with which to continue our clinical programs designed to show the clinical benefits of the Iomai vaccine patch," President and Chief Executive Stanley C. Erck said in a statement.

Iomai said it has not registered the securities with the Securities and Exchange Commission, but must file a resale registration relating to the stock issued in the transaction.

Shares of Iomai fell 17 cents, or 3.1 percent, to $5.28 in midday trading on the Nasdaq. The stock has traded in a 52-week range between $2.61 and $7.03.

Carl Icahn scored two victories in his ongoing battle with biotech company Imclone Systems Inc. as the company announced Friday he was chosen to head the committee searching for a new chief executive and his selection for new board member was approved.

Icahn, who owns about 14 percent of the drugmaker, has been waging a campaign to oust some board members he believes have done a deplorable job running the company. Among his criticisms was the failure of the board to lure a talented industry executive to ImClone's helm and to fully capitalize on the promise of cancer drug Erbitux, the company's only product.

On Thursday, the board appointed Icahn head of the committee to select a new CEO. ImClone spokesman David Pitts said the board agrees with Icahn that the company needs a CEO with biotech experience.

Interim CEO Joseph Fischer has a contract that extends through 2007, but Pitts said the company wasn't necessarily expecting him to stay that long.

Additionally, Dr. Peter S. Liebert, a nominee chosen by Icahn, was named to the company's board of directors. Liebert is chief of pediatric surgery at Stamford Hospital in Stamford, Conn., and since 1981, has been clinical associate professor of surgery at the College of Physicians & Surgeons of Columbia University.

Liebert's appointment follows weeks of squabbles between the company and Icahn. In September, he filed a proxy to remove six of ImClone's 12 board members. This month two of Icahn's targets _ Chairman David M. Kies and board member William W. Crouse _ resigned. Icahn is still seeking the removal of the other four.

With Liebert's appointment, Imclone said it would reduce the size of its board to 11 directors from 12.

California remained biotechnology's favorite place of business last year as other states unsuccessfully tried to woo a disease-fighting industry that has yet to turn a profit, according to a report issued Thursday by an industry booster.

The California Healthcare Institute found that biotech, broadly defined to include diagnostic companies and makers of medical equipment and devices, accounted for $62 billion in revenue in the state last year. The report didn't say how much the industry lost in that time.

Nearly half of the $5.9 billion in venture capital invested in the industry nationwide flowed to California companies. Many of the companies are developing so-called biological drugs to combat such diseases as cancer, diabetes and arthritis. These biological drugs are often derived from genetically engineered microbes, rather than chemicals used in traditional pharmaceuticals.

California scientists also landed $3.6 billion in National Institutes of Health grants in fiscal year 2004, the report found.

"California's biomedical industry is a vital and growing component of our state's high-tech economy," Gov. Arnold Schwarzenegger said in a foreword to the report.

With the average salary rising to $70,400 from $60,000 a decade ago, Florida, Arizona and other states have put biotechnology atop their economic development lists.

Yet, for all its prestige, biotechnology remains an unprofitable, niche industry that analysts said can't single-handedly boost a sagging economy. Despite being home to 2,700 companies, most employ fewer than 100 workers.

With 260,000 of California's 15 million workers, it's a bigger employer than the aerospace, movie and computer industries individually but smaller than the labor force in government, manufacturing and services.

"It's an industry not growing very rapidly in terms of the number of jobs it's adding," said Joseph Cortright, a Portland, Ore.-based economist. "It's a relatively small component of the metropolitan economy."

Biotechnology companies are clustered around just a few cities, the three biggest being San Francisco, San Diego and Boston. To a smaller extent, Austin, Texas, Seattle and North Carolina's Research Triangle are home to other companies, but Cortright doesn't see biotechnology clusters sprouting in new places.

In the California Healthcare Institute report, compiled by PriceWaterhouseCoopers, there was scant mention of profitability _ something that has eluded a large majority of the state and country's biotechnology companies.

Since the industry's inception 30 years ago, U.S. biotechnology companies have lost a combined $52 billion.

The losses continued to mount last year when the sector finished another $2.1 billion in the red, according to a report issued earlier this year by Ernst & Young. The Ernst report did note that the rate of loss was slowing compared with losses of $4.9 billion in 2004 and $6.4 billion in 2003. That report didn't break out losses by state.

"From a profit standpoint, these companies have very long gestation periods until they actually start selling products," said Ernst & Young partner Tracy Lefteroff, the report's author.

He predicted the industry as a whole will break even within five years and begin showing an overall profit within 10 years as smaller companies begin receiving regulatory approvals for their drugs.

A handful of biotechnology companies, such as Genentech Inc. of San Francisco and Amgen Inc. of Thousand Oaks, have hit it big after modest beginnings, making their initial investors wealthy.

But they remain an exception.

What's more, the high prices of their drugs, especially to treat cancer, are coming under political pressure and several patents on pioneering drugs are set to expire, opening the industry to generic competition for the first time.

"Though the biomedical industry is a solid, significant and growing component of the state's economy, California's life science leadership is fragile," David Gollaher, the institute's chief executive said in statement.

In the report, Gollaher said that "there are storm clouds in the California and national political environment that could dampen the industry's prospects."

Gollaher said several drugs and medical devices recalled last year could prompt the Food and Drug Administration to demand more and costlier data to ensure that products are safe and effective.

Biotech compay Amgen (NASDAQ AMGN) announced that a U.S. Federal District Court in Boston today denied Roche's motion to dismiss Amgen's patent infringement lawsuit against Roche. The court today also denied a motion by Ortho Biotech to intervene as a co-plaintiff in the case.

"The judicial process can now move forward towards resolution of the substantive issue of patent infringement and we look forward to addressing the merits of this case," said David Scott, Amgen's senior vice president, general counsel and secretary.

Amgen continues to believe that Roche's peg-EPO product violates Amgen's patents and does not provide any clinical or patient benefit over Amgen's innovative therapies, EPOGEN® (Epoetin alfa) and Aranesp® (darbepoetin alfa).

Amgen revolutionized anemia treatment with the introduction of EPOGEN. EPOGEN, along with Aranesp, represent over four million combined patient-years of experience. Amgen has continued to invest heavily in research to improve the lives of patients with kidney, cancer and cardiovascular disease.

ARIAD Pharmaceuticals, Inc. (Nasdaq ARIA) announced today that it proposes to offer 3,112,945 shares of its common stock pursuant to its effective shelf registration statements. The underwriter will be granted an option to purchase up to an additional 466,942 shares of ARIAD's common stock to cover over-allotments. All of the shares in the offering are being sold by ARIAD. Credit Suisse Securities (USA) LLC is acting as sole underwriter for the offering.

ARIAD is engaged in the discovery and development of breakthrough medicines to treat cancer by regulating cell signaling with small molecules.

Biotech company Encysive Pharmaceuticals (Nasdaq:ENCY) today announced that it has secured a commitment for up to $75 million in a common stock equity financing from Azimuth Opportunity Ltd. During the 18-month term of the commitment, Encysive may sell at its sole discretion registered shares of its common stock to Azimuth at a predetermined discount to the market price. Encysive will determine the timing and amount of any sales of its stock, subject to certain conditions. Acqua Capital Management is an advisor to Azimuth Opportunity.

Encysive intends to use the net proceeds from any such sales of common stock for general corporate purposes, including for developing and commercializing the Company's products.

The shares are being offered pursuant to an effective registration statement filed with the Securities and Exchange Commission on June 4, 2004. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities. There shall not be any sale of these securities in any state or jurisdiction where such an offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction.

About Encysive Pharmaceuticals

Encysive Pharmaceuticals Inc. is a biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. Our research and development programs are predominantly focused on the treatment and prevention of interrelated diseases of the vascular endothelium and exploit our expertise in the area of the intravascular inflammatory process, referred to as the inflammatory cascade, and vascular diseases.

The AMEX Biotech Index continues its strong uptrend and seems poised to test the 52 week high and possibly make a double top breakout.

Nastech Pharmaceutical Co. said Thursday that it filed with the Securities and Exchange Commission to issue up to $125 million in common stock from time to time.

The company said while it has no current plans to sell the shares, the shelf registration statement filed with the SEC would allow it to do so in the future.

Proceeds from any future sale would be used for general corporate purposes, including the funding of clinical research and development programs, clinical development of product candidates, capital expenditures and working capital needs, the company said.

Nastech helps develop medications that can be administered by inhaling them. The company is developing an osteoporosis drug and recently received a federal grant to develop influenza treatments.

Shares of Nastech fell 15 cents to $16.81 in after-hours activity on the INET electronic exchange, after closing up 2 cents at $16.96 on the Nasdaq.

Swiss biotechnology company Serono SA reported a third-quarter profit increase of 20 percent Thursday on higher revenue, especially from its flagship multiple sclerosis drug Rebif.

Serono, which is being bought by German pharmaceutical and chemical company Merck KGaA, said profit for the quarter was $170.6 million, up from $142.4 million in the year-ago period.

The Geneva-based company said sales rose 9.5 percent to $699.1 million.

"We have delivered an excellent quarter with strong performance of our leading product, Rebif, and our company has again generated strong cash flow," said Chief Executive Ernesto Bertarelli.

Worldwide sales of Rebif increased by 18.7 percent to $374.8 million.

Shares in Serono rose 0.2 percent to close at 1,081 Swiss francs ($856.92) on the Zurich exchange Thursday.

Accentia Biopharmaceuticals Shares Soar Following Data on Long-Lasting Cancer Remission

Shares of Accentia Biopharmaceuticals Inc. surged Thursday on heavy volume after the drug developer reported its BiovaxId cancer treatment caused long lasting periods of remission in patients during a clinical trial.

Accentia shares skyrocketed $1.57, or 54 percent, to $4.44 in afternoon trading on the Nasdaq, at more than 11 times its average volume. Since going public on Oct. 28, the stock has changed hands between $1.96 and $8.86.

During the clinical trial, 20 patients, or 80 percent, responded to BiovaxId following chemotherapy by having their cancer go into remission with durations of 20 months to 51 months.

Accentia's drug uses a patient's own cancer cells to formulate a therapy that primes the immune system to recognize and attack the cancer.

In the trial, the long period of remission characteristically followed a shorter first one. Patients enrolled had relapsed Follicular Non-Hodgkins Lymphoma, an immune system cancer where the disease is grouped in clusters in the lymph node.

The company recently received an orphan drug designation for BiovaxId from European regulators for Follicular Lymphoma, meaning if the drug is approved for that purpose, the company will get 10 years of marketing exclusivity.

Pfizer's 3Q Profit More Than Doubles Compared With Year-Ago Quarter Hit by Big Charge

Pfizer Inc. said Thursday its third-quarter profit more than doubled from a year ago when results were hurt by an acquisition charge, but predicted flat revenue growth and more cost cutting in the years ahead.

The world's largest drugmaker said the challenging operating environment is pushing it to slash costs beyond the program announced last year designed to cut $4 billion in expenses by 2008. Specifics are set to be announced next year.

Analysts had been hoping Pfizer's new CEO would be more aggressive in lowering its expensive. Its shares rose 22 cents to $28.32 in morning trading on the New York Stock Exchange.

"We recognize that the world around us is changing dramatically and that we need to accelerate the scope and speed of change to transform Pfizer," said Jeffrey B. Kindler, who took over the helm from Henry McKinnell, who had drawn strong criticism for his style, rich retirement package and the company's sliding stock price.

Kindler said that as a result of the cost-cutting, Pfizer will be able to deliver high single-digit earnings per share growth in 2007 and 2008. The company had already pledged to meet such targets and on Thursday reiterated it would earn $2 a share.

The new plan means Pfizer's operating expenses next year will fall below those of 2006, according to company vice chairman David L. Shedlarz.

Pfizer said the strengthening dollar combined with pricing policies in several European countries means it now expects revenue in the next two years to be on par with those expected in 2006. Previously, Pfizer had said predicted moderate growth.

Pfizer said it earned $3.4 billion, or 46 cents a share, in the July-September period compared with $1.6 billion or 22 cents a year earlier. In the third quarter of 2005, Pfizer took a $1.4 billion acquisition charge for its purchase of Vicuron Pharmaceuticals Inc.

After tax adjustments, Pfizer earned 54 cents a share in the latest quarter, beating by 9 cents the estimate of analysts surveyed by Thomson Financial.

Revenue rose 9 percent to $12.2 billion, beating the expectation of analysts who predicted $11.4 billion.

Lipitor revenue rose 15 percent to $3.3 billion, despite moves from health plans to switch patients to a cheap generic version of Zocor, another cholesterol-lowering agent.

Meanwhile, sales of antidepressant Zoloft plunged 43 percent to $459 million as it struggled with generic competitors launched over the summer.

But revenues of Celebrex, a pain reliever that had been hard hit by safety concerns, increased 20 percent to $537 million. Erectile dysfunction drug Viagra sales jumped 10 percent to $423 million. Its sales had been weak recently because of competition and a sluggish overall market for the products.

Deutsche Bank analyst Barbara Ryan reiterated her buy rating on the stock and her $33 a share price target, noting that Pfizer can continue to maintain growth through cost cutting and using its ample cash flow to buy new companies and technologies.

"Pfizer exceeded expectations again, despite top line pressures, we expect this to continue, due largely to its superior financial flexibility and cost cutting," she wrote in a report.

For the nine months, Pfizer's net income rose 85 percent to $9.9 billion or $1.35 a share, from $5.4 billion or 72 cents a share, a year earlier. Revenue rose 3 percent to $35.8 billion.

Vical Incorporated (Nasdaq) today announced that it has received a commitment from an investment fund of Temasek Holdings (Private) Ltd, an Asia investment firm headquartered in Singapore, to purchase $25.0 million of its common stock in a registered direct offering, under which Vical will sell approximately 5.0 million shares pursuant to an effective shelf registration statement at a price of $5.02 per share, with no commissions. The transaction is expected to be completed on October 19, 2006. Proceeds from the transaction will be used for further development of Vical's pandemic influenza DNA vaccine candidate, including funding of Phase 1 human clinical testing, as well as for other general corporate purposes.

Vijay B. Samant, Vical's President and Chief Executive Officer, said, "We are pleased that Temasek Holdings has selected Vical as an addition to its investment portfolio. We look forward to the benefits of Temasek's substantial resources and international perspective as we progress in our program to develop a DNA vaccine against pandemic influenza."

About Vical

Vical researches and develops biopharmaceutical products based on its patented DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. Potential applications of the company's DNA delivery technology include DNA vaccines for infectious diseases or cancer, in which the expressed protein is an immunogen; cancer immunotherapeutics, in which the expressed protein is an immune system stimulant; and cardiovascular therapies, in which the expressed protein is an angiogenic growth factor. The company is developing certain infectious disease vaccines and cancer therapeutics internally. In addition, the company collaborates with major pharmaceutical companies and biotechnology companies that give it access to complementary technologies or greater resources. These strategic partnerships provide the company with mutually beneficial opportunities to expand its product pipeline and address significant unmet medical needs.

Gilead Sciences Inc. (GILD) on Wednesday posted a third-quarter loss as a one-time charge related its acquisition of Corus Pharma Inc. offset higher sales of the company's drugs for HIV, the virus that causes AIDS.

The biotechnology company reported a net loss of $52.2 million, or 11 cents per share, compared with net income of $179.2 million, or 38 cents per share, a year earlier.

ImmunoGen Inc. has inked yet another licensing deal with French pharmaceutical company Sanofi-Aventis.

Cambridge, Mass.-based ImmunoGen ((Nasdaq IMGN) announced on Wednesday that it had licensed non-exclusive rights to Sanofi-Aventis (NYSE SMY) for technology that works to make non-human antibodies appear human to the human immune system.

Sanofi-Aventis will use the technology to develop anti-cancer compounds included in an earlier collaborative agreement with ImmunoGen.

As part of the latest deal, ImmunoGen will earn a $1 million license fee, half of which is due when the contract is signed. The company is also eligible to receive up to $4.5 million in milestone payments, plus royalties.

In August, ImmunoGen announced it had extended its research collaboration with Sanofi-Aventis through Aug. 31, 2008. The companies began their first collaboration in July 2003.

ImmunoGen is developing anti-cancer treatments using tumor-targeting antibodies that deliver treatments directly to cancer cells.

Genzyme Corp. said it had agreed to acquire AnorMED Inc. of Canada for $580 million, beating out rival biotechnology company Millennium Pharmaceuticals Inc. to gain AnorMED's experimental blood cancer drug.

Cambridge, Mass.-based Genzyme agreed to pay $13.50 a share for AnorMED in the biggest hostile takeover in the biotech industry.

AnorMED's drug, Mozobil, is designed to facilitate stem cell transplantation in patients with blood cancers. Analysts expect the drug to generate $100 million to $300 million a year.

Pfizer Inc., the world's largest drugmaker, reports earnings for the fiscal third quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Pfizer let go Chief Executive Hank McKinnell in July under pressure from investors angered over an $83 million retirement package after watching the company's stock price drop about 40 percent over McKinnell's five years at the helm. The company replaced McKinnell with former chief counsel Jeff Kindler, who quickly set the tone to reform the company.

EXPECTATIONS: Analysts surveyed by Thomson Financial expect third-quarter earnings per share of 45 cents on revenue of $11.38 billion.

ANALYST TAKE: Banc of America analyst Chris Schott, who rates Pfizer a "Buy," expects the company to top the consensus by a penny per share on contained expenses. Merrill Lynch's David Risinger also expects Pfizer to report earnings per share ahead of consensus.

Deutsche Bank analyst Barbara Ryan, who also lists Pfizer a "Buy," called the company one of her top picks this earnings season given that management shake-ups at Big Pharma within the past year have made cost cutting more imperative. JPMorgan's Chris Shibutani, who rates the stock "Overweight," believes Pfizer will report in line with consensus as he looks forward to a more detailed management plan to streamline the company.

WHATS AHEAD: A more detailed unveiling of Kindler's plan for Pfizer is expected at a January analyst meeting, or at a Nov. 30 research and development meeting at the earliest, Shibutani said.

STOCK PERFORMANCE: Shares of Pfizer rose nearly 21 percent to close the third quarter at $28.36 on the New York Stock Exchange, compared with a 7 percent rise in the American Stock Exchange's Pharmaceutical Index, which tracks 15 major drug makers. Pfizer shares are up nearly 22 from the beginning of the year.

MEMY Trading Halted.........FDA Requests Further Information

Memory Pharma provides update on Phase 2a trial of MEM 3454 in alzheimer's disease; FDA requires further explanations of revisions Co announces an update on the investigational new drug application filed in Sept 2006 with the FDA for MEM 3454.

The FDA has advised the co that in order to fully review the toxicology reports that were submitted with the I.N.D, the agency requires further explanations of revisions that were made to those reports since they were submitted with the co's first I.N.D for this trial in May, and as a result the proposed Phase 2a clinical trial for MEM 3454 in Alzheimer's disease has been placed on clinical hold. The FDA has also deferred assessment of the adequacy of the Investigator's Brochure for the trial pending submission of the additional information.

MEMY also reported that the FDA confirmed that the clinical hold was not related to any manufacturing issues with MEM 3454 and that the potential impurities issue, previously raised by the FDA in connection with the co's first IND for the proposed Phase 2a clinical trial of MEM 3454, had been adequately resolved. The co believes that no additional studies or data will be required to address the FDA's questions and that, as a result, it should be able to provide to the FDA, by early November, the information necessary to facilitate the FDA's review.

Biotech drugmaker Genta Inc. said Tuesday that its cancer drug Genasense was given an orphan drug designation for the treatment of advanced skin cancer in Australia.

Shares of Genta rose 10 cents, or 12.5 percent, to 90 cents in pre-market activity on the INET electronic exchange, after closing at 80 cents on the Nasdaq Monday.

The Australia Therapeutic Goods Administration granted the designation for the drug to treat Stage IV malignant melanoma. The designation is given to drugs meeting underserved diseases, and grants reduced filing fees for market approval, along with seven years of marketing exclusivity if approved.

The Food and Drug Administration is scheduled to make a decision on the drug on Oct. 29. Earlier in the month, the company designed a study with the FDA to further test the drug in treating leukemia, but wants to meet with the agency on its current marketing application before proceeding.

Genta had previously tried to get Genasense approved for advanced skin cancer, but an FDA advisory panel recommended against it in 2004, and the company withdrew the marketing application.

Eli Lilly & Co. said on Tuesday it has agreed to acquire the biotechnology company Icos Corp. for $2.1 billion to gain full rights to the erectile dysfunction drug Cialis.

Indianapolis-based Lilly said it will acquire all the outstanding shares of Icos for $32 a share in cash, representing an 18 percent premium over Icos's closing share price on Monday of $27.12.

Lilly said it expects the acquisition to increase its earnings and earnings growth rate beginning in 2008 and, after a significant addition to sales in 2007, to modestly accelerate the company's sales growth rate after that.

"With full ownership of Cialis we will be able to realize operational efficiencies in the further development, marketing and selling of this important product," said Sidney Taurel, Lilly's chief executive officer, in a statement.

Cialis was launched in 2003 and generated worldwide sales of $456 million in the first six months of 2006.

Lilly, which currently markets Cialis with Icos through a joint venture, said it has captured more than 25 percent of the erectile dysfunction market in the United States.

The transaction is expected to close in late 2006 or early 2007.

AnorMed Accepts Genzyme's $580 Million Buyout Offer Over Rival Millennium Pharma Bid

Biotech drug maker Genzyme Corp. entered an agreement Tuesday to acquire competitor AnorMed Inc. for about $580 million, trumping a rival offer for the Canada-based company from Millennium Pharmaceuticals Inc.

Last week, AnorMed declared Genzyme's $13.50 per share cash offer superior to Millennium's offer of $12 per share or $515 million in total. AnorMed said that if Millennium did not to match Genzyme's proposal, then its board would enter into a support agreement negotiated with Genzyme.

Cambridge, Mass.-based Genzyme had raised its offer for the company from a previous bid of $8.55 per share, or $380 million.

Millennium may be entitled to a $19.5 million break up fee from AnorMed. Representatives at Millennium were not available for immediate comment.

Genzyme and AnorMed hope to close the transaction soon after the tender offer expires on Nov. 6.

The centerpiece of the acquisition for Genzyme is AnorMed's Mozobil, a drug candidate that promotes stem cell production and is currently in late-stage clinical development trials. Mozobil is expected to hit the market in 2008.

Should AnorMed accept a better offer that Genzyme does not match, Genzyme may also be entitled to a $19.5 million break up fee.

The deal must still gain clearance from AnorMed shareholders and antitrust clearance from regulators. Genzyme expects the transaction to dilute earnings through 2008 and add to them in 2009. Analysts surveyed by Thomson Financial expect earnings per share of $2.74 in 2006, $3.16 in 2007, and $3.65 in 2008.

Shares of Genzyme dropped 29 cents to $68.33 and AnorMed shares fell 39 cents, or 2.8 percent, to $13.41 in morning trading on the Nasdaq.

Biotech companyAcorda Therapeutics (Nasdaq ACOR) announced today that it will expand its sales force to 65 people, including 52 area business managers who will call on specialists as well as primary care physicians who are high-volume prescribers. The Acorda sales team promotes Zanaflex Capsules(TM) (tizanidine hydrochloride).

"This second expansion will allow us to reach a much greater number of specialists with increased frequency and efficiency," said John Librie, VP, Sales and Marketing. "In addition, the Acorda team will be able to address the primary care market opportunity."

The current sales force of 32 people, including 25 area business managers, has an average of 15 years experience in sales and sales management in the biotechnology and pharmaceutical industries. This team currently reaches approximately 3,200 specialists. The expanded sales force will reach approximately 7,400 specialist and primary care physicians.

Physicians who are specialists in areas such as neurology or physical medicine and rehabilitation account for more than 40 percent of the combined Zanaflex Capsules, Zanaflex® and tizanidine market. Primary care physicians account for an additional 40 percent of the same market.

Acorda Therapeutics is a biotechnology company developing therapies for SCI, MS and related nervous system disorders. The Company's marketed products include Zanaflex Capsules(TM) (tizanidine hydrochloride), a short-acting drug indicated for the management of spasticity.

Analysts expect cost control to be a major factor in third-quarter earnings as Big Pharma begins releasing results this week on the heels of recent upper management housecleaning measures within the sector.

Banc of America analyst Chris Schott forecast that Big Pharma will be able to report at least inline sales, and show better-than-expected sales growth in some cases. However, the he said the earnings focus will be on expense control.

"With signs of increased cost cutting and an emerging pipeline, we have become incrementally more positive on the group," Schott said in a research note.

The analyst expects both Merck and Wyeth to come out ahead of analysts' consensus by 3 cents per share, and Pfizer by 1 cent per share.

At investment firm Deutsche Bank, analyst Barbara Ryan said management shake-ups at Big Pharma within the past year make cost cutting more imperative.

The analyst said in a note that the new chief executive at Pfizer, Jeff Kindler, will likely "raise the ante" with new initiatives to cut costs at the world's largest drug maker, causing a ripple effect through the sector.

In September, Bristol-Myers Squibb joined Big Pharma's housecleaning trend by ousting CEO Peter Dolan on the recommendation of federal monitors. Pfizer replaced CEO Hank McKinnell in July, and Merck's CEO Raymond Gilmartin vacated his post early last year.

"The new guard understands that they must improve earnings, or suffer a similar fate, hence aggressive cost cutting is already under way and will likely intensify in the near term, as (Pfizer's) new management team, under the leadership of its new CEO, Jeff Kindler, take a more urgent and substantial strike at their cost base," Ryan said in a recent note.

Ryan lists Merck, Pfizer, and Schering-Plough as her top picks.

Merrill Lynch's David Risinger expects third-quarter earnings for Big Pharma to be generally ahead of expectations. The analyst bases his optimism on an acceleration in U.S. sales volume and progress in cost cutting.

Risinger expects Bristol-Myers, Merck, Pfizer and Wyeth to report earnings per share ahead of consensus.

Analysts surveyed by Thomson Financial expect third-quarter earnings per share of 45 cents for Pfizer, 20 cents for Bristol-Myers, 79 cents for Lilly, 80 cents for Wyeth, 15 cents for Schering-Plough, and 50 cents for Merck.

Roche and InterMune Inc. (ITMN Nasdaq) said on Monday they have agreed to develop and commercialize products from InterMune's hepatitis C protease inhibitor program.

The agreement includes InterMune's ITMN-191, which is expected to enter clinical trials before year end. The companies will also collaborate on a research program to identify, develop and commercialize novel second-generation protease inhibitors for treatment of hepatitis C.

Upon closing, Roche will pay InterMune an upfront payment of $60 million. Assuming the successful development and commercialization of ITMN-191 in the U.S. and other countries, InterMune could potentially receive up to $470 million in milestones, including $35 million within the next 12 months, the companies said.

Biopharmaceutical company Vical Inc. said Monday it plans to sell $12.5 million in stock as part of a direct offering to raise financing for existing drug programs and general corporate purposes.

Vical said it received firm commitments from undisclosed investors to buy 2.5 million shares at $5.02 each.

That is a discount of 1.6 percent from the stock's closing price of $5.10 on Friday, but equal to the closing bid price on the Nasdaq, according to Vical.

The company expects the sale to close Monday.

Biotech stocks tacked on additional gains last week and rose to five-month highs while big pharma investors positioned themselves ahead of a flurry of third-quarter earnings reports. The Nasdaq Biotechnology Index closed the week up 1.9%. The Amex Pharmaceutical Index ended flat for the second straight week.

Federal health regulators approved a new indication for cancer drug Avastin but shares of Genentech ended the week slightly lower as investors were disappointed with third-quarter sales. On Wednesday, the U.S. Food and Drug Administration cleared Avastin as a treatment for non-small cell lung cancer, the most common form of the disease. Earlier in the week, Genentech reported third-quarter earnings above Street estimates, but sales of key cancer drugs Rituxan and Herceptin came in lower from the prior quarter while Avastin came in below the Wall Street consensus estimate. Rituxan is co-marketed by Biogen Idec.

Shares of New River Pharmaceuticals rocketed to a 75% weekly rise after the company and developmental partner Shire said they received an approvable letter from the FDA for NRP104, an experimental treatment for children with attention-deficit hyperactivity disorder. W.R. Hambrecht raised the price target on the stock to $50 from $42 on Oct. 11. The following day, the research firm raised the target to $59 after New River disclosed "astonishingly favorable profit splits" with Shire, which will receive just a third of profit from U.S. sales. "In our view, it cannot get much more visible than this, which is why it is not too late to buy New River shares."

Merck announced a delay for experimental insomnia treatment gaboxadol on Friday but shares closed the week higher as investors took positions ahead of third-quarter earnings and expected FDA approval of new diabetes drug Januvia. Merck and developmental partner Lundbeck said it expects to file for approval of gaboxadol in the middle of 2007 rather than the first quarter of 2007 as previously expected. Morgan Stanley said on Oct. 10 investor attention may be focused on sales of recently launched Gardasil, a vaccine for human papilloma virus, or HPV, the leading cause of cervical cancer. "We remain very comfortable in our long term projection of more than $2.0 billion but the slope of the curve will be tricky to get right," the firm said. Morgan Stanley maintained an "overweight" rating on the stock. "We continue to view Merck as one of the most attractive names in the sector long-term, and we expect it to continue its slow and steady climb," it said. "If management meets its targets, Merck will be worth well over $60 over the next several years."

Genzyme reported third-quarter earnings slightly above analysts' consensus estimate last Thursday morning. The Cambridge, Mass.-based company posted a profit of 73 cents per share, excluding several one-time items. The Wall Street forecast called for earnings of 71 cents per share. Shares closed Thursday down 1.6%. Bear Stearns said it was a strong quarter but investors appear concerned with competition for Synvisc, an arthritis treatment, as well as dialysis drug Renagel. "We believe the Street is ignoring Genzyme's pipeline," said Bear Stearns. The firm has high expectations for new drugs Tolevamer and Mozibil and new indications for Renagel and Myozyme. "We believe none of these opportunities are fully captured in Street estimates, creating perhaps the best 12-month risk/reward in biotech," it said.

Biopharmaceutical company Critical Therapeutics Inc. said Friday H. Shaw Warren, a co-founder and director of the company since July 2000, is retiring and will be replaced by M. Cory Zwerling, a former executive at Bristol-Myers Squibb.

Zwerling will serve for the remainder of Warren's term, which expires at the 2008 annual meeting of stockholders. The 47-year-old will chair a Strategic Advisory Committee established by the board.

Richard W. Dugan, a member of the board since April 2004, was named lead independent director.

Additionally, Robert H. Zeiger stepped down as executive chairman, but he will remain a director.

Critical Therapeutics focuses on treatments for respiratory, inflammatory and critical care diseases. Shares added 4 cents to $2.32 in midday Nasdaq trading.

Canadian drug developer Aspreva Pharmaceuticals Corp. said Friday it expects third-quarter revenue of $48 million, up sharply from the year-ago level, but below Wall Street's target.

Shares of the Victoria, British Columbia-based company sank on the news, shedding $2.02, or 8.1 percent, to $22.87 on the Nasdaq. Over the past 52 weeks, the stock has traded between $11.18 and $34.89.

The preliminary figure marks a 54.8 percent increase over revenue of $31 million during the same period a year ago. The figure also includes the negative impact of preliminary reconciliation payments to Roche, under the terms of a collaboration agreement.

Two analysts polled by Thomson Financial are looking for higher revenue of $54.3 million.

Aspreva also reaffirmed full-year guidance for revenue in excess of $200 million, while expecting CellCept prescriptions to increase by 20 percent to 25 percent.

Analysts expect the company to book $225.9 million in revenue.

Lung cancer treatment gets FDA approval


Genentech Inc. has received federal approval to sell the drug Avastin for treatment of the most common kind of lung cancer.

The U.S. Food and Drug Administration approved the use of the drug in combination with chemotherapy for non-small cell lung cancer, the South San Francisco company (NYSE: DNA - News) said Wednesday. Genentech has a manufacturing plant in Vacaville.

In a clinical trial of 878 people, 51 percent of patients treated with Avastin and chemotherapy were still alive after one year compared to 44 percent of those who only received chemotherapy. The median survival rate was two months longer for patients who took Avastin than those who got chemotherapy alone.

Lung cancer kills 162,000 people per year in the United States, more than any other type of cancer.

Genentech said it would cap the price of the drug at $55,000 per year. Treatment of colorectal cancer with Avastin costs less than $4,400 per month, but lung cancer treatment requires higher doses at a typical cost of $8,800 per month.

The FDA approved use of the drug for colorectal cancer in February 2004.

Published October 12, 2006 by the Sacramento Business Journal

AMEX BIOTECH INDEX (AMEX:BTK) .....One Year Chart

The AMEX Biotech Index has broken through resistance at the 700 level and seems poised to test the 720 level in the near term.

Nabi Biopharmaceuticals Completes Enrollment for NicVax Vaccine Study Ahead of Schedule

Drug maker Nabi Biopharmaceuticals on Thursday said it has completed enrollment ahead of schedule for its mid-stage study of NicVax, a potential vaccine to treat nicotine addiction and prevent smokers from relapsing.

The company said it finished enrollment for the Phase IIB study three months earlier than previously anticipated, and trial results are expected early in the second quarter of 2007.

The NicVax vaccine is designed to prevent nicotine from entering the brain where it would trigger the release of dopamine, a stimulant that is part of what makes nicotine addictive.

Nabi shares rose 32 cents, or 5.1 percent, to $6.58 in morning trading on the Nasdaq. The stock has traded in a 52-week range of $3.06 to $13.04.

La Jolla Pharmaceutical Asks European Regulators to Withdraw Riquent Application

Drug developer La Jolla Pharmaceutical Co. asked the European Medicines Agency to withdraw the company's application for its lupus renal disease treatment candidate Riquent, saying it would need more time to compile additional data the regulatory body requested.

In a statement, the company said it believes already ongoing additional studies would provide the necessary data, but that it would not be available within the timeframe allowed by regulations. La Jolla plans to refile for approval when the new data is compiled.

Approximately 50 percent of lupus patients have renal disease, the company said, which leads to renal failure, a need for dialysis. It is the leading cause of death among lupus patients, according to the company.

Shares of La Jolla fell 6 cents to $3.59 in morning trading on the Nasdaq.

FDA Warns BioMarin Pharmaceutical Over Claims on a Web Site Promoting Orapred Drug

Federal health officials sent a warning letter to BioMarin Pharmaceutical Inc. Wednesday, saying a company Web site makes unsubstantiated claims for the liquid form of the drug Orapred, a steroid used to reduce inflammation in asthma and other conditions.

In the letter from the Food and Drug Administration dated Oct. 11, the agency says BioMarin's Web site "suggests Orapred is safer and more effective than has been demonstrated." According to the agency, the company fails to highlight risks of taking the drug, which is known to cause mood swings and is contraindicated in patients with systemic fungal infections. The Web site also does not mention adverse reactions associated with the drug, which include fluid retention, hypertension, increased appetite and weight gain.

Orapred is primarily used to treat asthma in children because it contains flavor additives to mask the taste of its active ingredient, prednisolone. The drug is also prescribed to control inflammation from other conditions, including types of dermatitis and drug hypersensitivity.

In the warning letter, FDA takes issue with claims that the drug's flavor makes it easier to take. According to the agency, "these claims misleadingly suggests that because of its formulation, patients gag less often when taking Orapred." FDA says there is no documented evidence to support the claim.

BioMarin said Thursday it will comply with FDA by taking the site down immediately. Company spokesman Joshua Grass said BioMarin was surprised by the warning letter because FDA reviewed the content of the site last year and found no problems.

The company entered a North American licensing agreement for Orapred with privately held Alliant Pharmaceuticals in March 2006. In August Biomarin reported receiving a $7.5 million payment from Alliant under the agreement.

Shares of BioMarin Pharmaceutical rose 8 cents Thursday to $16.54 in midday trading on the Nasdaq.

Trimeris' Fuzeon Unpopular Due to Painful Delivery System, Analysts Say

Analysts are skeptical on whether a less painful, needle-free device to administer Trimeris Inc.'s HIV-fusion inhibitor drug will help boost sales, if it is ultimately approved.

The biopharmaceutical company on Wednesday reduced its full-year sales guidance for the drug, Fuzeon, and also said the Food and Drug Administration wants more safety information on an application for a needle-free delivery system of the drug - a device that forces the drug through the skin without using a syringe. As a result, the application might not proceed until the first half of 2007, the company said.

Fuzeon prevents HIV from entering and fusing with the human immune cell and is sometimes used in patients who have become immune to other HIV treatments, said Trimeris.

ThinkEquity Partners analyst Vinny Jindal maintained a "Sell" rating on Trimeris and said Fuzeon's unpopularity is due to "the pain and inconvenience of twice daily" injections. Meanwhile, a smaller gauge needle or needle-less delivery system might not help the drug take off, since competition is heating up in the form of less inconvenient drugs that are in development, noted Jindal.

Goldman Sachs analyst Meg Malloy reiterated a "Neutral" rating on the company in a client note, and said the possible delay in expanding the drug to include the new delivery system is a "modest setback." Instead, the bigger challenge, is getting hard to treat patients to use the drug itself. "Fuzeon growth has long been hindered by administration and injection site reactions," she wrote.

Morgan Stanley Steven Harr likewise noted that the needle-free delivery platform was expected to be a growth driver and reiterated an "Underweight" rating.

"We still see little evidence of acceleration in Fuzeon end-user demand to drive long-term profitability, giving us little reason to own the stock at these levels," Harr wrote.

Trimeris cut 2006 sales forecasts for Fuzeon in the U.S. and Canada to a range of $126 million to $134 million compared with a prior range of $140 million to $150 million.

The needle-free delivery platform, which is being developed in partnership with the Swiss pharmaceutical company Roche, was associated with nerve pain and hematoma in some patients, said Trimeris.

The company also said it expects to post yearly profit for the first time since beginning operations 13 years ago.

Shares of Trimeris closed at $9.06 Wednesday.

Canadian biotechnology company Cardiome Pharma Corp. filed with U.S. regulators on Wednesday to periodically sell up to $150 million in common shares.

The company said in a registration statement with the Securities and Exchange Commission that it would use the proceeds from the shelf offering for working capital and other general corporate purposes, including clinical development and regulatory costs and acquisitions.

Under a shelf registration, a company may sell securities in one or more separate offerings, with the size, price and terms to be determined at the time of sale.

The recent wave of mergers among European pharmaceutical companies is set to continue, Standard & Poor's believes, driven by strong global sales growth and the race to develop top-selling 'blockbuster' drugs.

The recent surge of activity started in July, when Germany's Bayer AG bought domestic rival Schering AG in a deal worth nearly 16.9 bln eur.

Since then Merck KGaA, which lost out in the battle for Schering, has bought the majority stake in Switzerland's Serono SA for 16.6 bln sfr, Nycomed acquired the pharmaceutical arm of Altana AG for 4.5 bln eur and Belgium's UCB swooped on Schwarz Pharma AG, paying 4.4 bln eur.

Standard & Poor's Olaf Toelke said those deals, among mid-sized companies, mainly reflect concerns about critical size.

'All the transactions, including the Bayer-Schering link-up, have taken place in a market dominated by the need to fund ever-increasing R&D budgets in the race for the next blockbuster drug,' the credit analyst wrote.

A key concern for pharma companies at the moment is the productivity of their research and development efforts. The cost of developing a new drug has risen in the last 10 years, as research techniques and compounds have become more complicated, and regulatory requirements more onerous.

Taking into account all the products that never make it to the market, the cost of developing every drug that does reach the shelves is estimated at more than 1 bln usd.

Medium-sized drug makers such as Merck KGaA and Serono, which do not have the huge cash flow of large pharma groups, have been merging so R&D budgets can be increased.

Meanwhile, S&P said that the larger European pharmaceutical companies' above-industry-average global sales growth and strong cash generation is increasing their flexibility for M&A activities.

Companies including Switzerland's Roche Holding AG and
Britain's GlaxoSmithKline PLC reported sales growth of about 10 pct in the second quarter of 2006, compared with an average assumed industry growth of about 6-7 pct, they noted.

'The rated companies should therefore experience a further strengthening of their credit quality on average, in the absence of larger acquisitions,' Toelke wrote.

Trimeris Says Year Sales of Fuzeon Will Be Lower Than Expected, Still Sees Profit for 2006

Trimeris Inc. said Wednesday 2006 sales of its Fuzeon HIV treatment will miss its targets, but the biopharmaceutical added it expects to post its first-ever profit for the year since it began operations 13 years ago.

Sales of Fuzeon, a fusion inhibitor, in the U.S. and Canada are now pegged in a range of $126 million to $134 million for the year versus a prior range of $140 million to $150 million. The revised guidance represents growth of 12 to 19 percent growth over 2005.

"Slower than anticipated adoption of the newest HIV protease inhibitors has provided less momentum than we expected for boosting new Fuzeon prescriptions," said Steven D. Skolsky, chief executive. "Nevertheless, we believe that the proven contribution that Fuzeon is making toward the achievement of undetectable viral load in treatment-experienced HIV patients will continue to drive future worldwide growth of Fuzeon. We anticipate that this, combined with the improvement we've seen in Fuzeon gross margins, will propel the company to its first profitable year since it began operations in 1993."

In the second quarter, North American sales of Fuzeon rose 23 percent to reach $31.1 million, and worldwide sales rose 6 percent to reach $57.2 million.

Separately, Trimeris and Swiss pharmaceutical company Roche said the Food and Drug Administration is seeking more information on their application for a version of Fuzeon to be administered with a needle-free device.

According to a Thomson Financial survey, seven analysts surveyed forecast, on average, a profit of 11 cents per share for 2006.

In after-hours trading, Trimeris shares plunged $1.16, or 12.8 percent, to $7.90.

Biovest International Gets Orphan Drug Designation for BiovaxID in Europe

Biovest International Inc., which is majority-owned by drug developer Accentia Biopharmaceuticals Inc., said Wednesday that a European commission registered its BiovaxID therapy as a rare disease treatment, conferring market exclusivity to treat a rare cancer.

The company said the Commission of the European Union entered BiovaxID into the Drug Register for Rare Diseases for Follicular Lymphoma, an immune system cancer where the disease is grouped in clusters in the lymph node. The designation follows a recommendation by a European Medicines Agency committee to make BiovaxID an orphan drug for the disease.

Orphan drug status in Europe gives the company 10 years of marketing exclusivity for the specific drug use upon approval, along with reduced filing fees and regulatory assistance.

Accentia shares rose 22 cents, or 8.9 percent, to $2.66 in afternoon trading on the Nasdaq. Since going public on Oct. 28, the stock has changed hands between $1.96 and $8.86, and is off nearly 52 percent year-to-date.

Osiris Therapeutics (OSIR) has received regulatory approval to conduct late-stage trials for its lead stem-cell drug in Canada.

The drug, known as Prochymal, is meant to treat a condition known as graft-vs.-host disease in which patients who receive transplants or donated bone marrow experience a life-threatening immune system reaction. No treatments are approved for the condition.

The company's application to expand the trial into Canada was based on safety and efficacy data as well as quality specifications and patient information provided to the regulatory agency, Health Canada.

"This trial is a major undertaking with worldwide implications" Osiris said. "If successful, Prochymal may not only be the first treatment approved for GVHD, but also the first stem-cell drug approved for any indication."

The Food and Drug Administration has granted the drug fast-track status and an orphan-drug designation.

Sanofi-Aventis does not intend to buy U.S. biotechnology company ImClone Systems, the French drugmaker said on Wednesday.

"Following numerous articles in the French and international press regarding Imclone ... (Sanofi) wants to state the following: Sanofi has not made an offer for Imclone and does not intend to make one," a Sanofi-Aventis spokeswoman told Reuters.

ImClone, best known for its Erbitux cancer drug, said on Oct. 4 it had received a takeover proposal from an unnamed big drugmaker but added that billionaire investor Carl Icahn had sabotaged the deal.


The New York Times on Tuesday identified Sanofi as the suitor, citing people involved in the transaction.

Meanwhile, ImClone's Chairman David Kies resigned, pressured by Icahn, who considers the company's management incompetent and is seeking to win control of the board.

Sanofi-Aventis shares fell 0.8 percent to 68.60 euros by 0816 GMT, while the DJ health index slipped 0.2 percent.

Genentech's 3Q Profit Up 58 Pct. on Strong Drugs Sales, Introduction of Eye Disorder Treatment

Third-quarter profit surged 58 percent for biotechnology company Genentech Inc. behind strong drugs sales and the introduction of a new treatment for an eye disorder, the company announced Tuesday.
South San Francisco-based Genentech reported a profit of $568 million, or 53 cents a share, for the quarter, compared to $359 million, or 33 cents a share, for the same period last year.

If not for special expenses, including employee stock options, the company said it would have earned $637 million, or 59 cents per share. On that basis, the company exceeded Wall Street analysts' expectations by eight cents a share, according to Thomson Financial.

Genentech said it expected earnings per share to grow by 65 percent to 70 percent for the full year.

The company's revenue rose 36 percent to $2.39 billion for the quarter, largely because of the continued popularity of Genentech's pricey cancer-fighting drugs. Sales of the non-Hodgkin's lymphoma treatment Rituxan rose 12 percent to $509 million for the quarter while sales for its colon cancer staple Avastin shot up 34 percent to $435 million.

Lucentis, the company's newest drug that treats the eye disease macular degeneration had sales of $153 million in the quarter. The Food and Drug Administration approved Lucentis on June 30.

"We are encouraged by strong initial physician acceptance of Lucentis," said Genentech chief executive Arthur Levinson. "The rapid adoption of the recently available Lucentis product reflects the fact that wet age-related macular degeneration is a key unmet medical need."

The results were released after the market closed. The company's shares fell 68 cents to close at $85.60, and tumbled $1.60 or 1.87 percent to $84 in after hours trading.

Biotechnology company Renovis Inc. said Tuesday it filed a universal shelf registration statement with the Securities and Exchange Commission to sell up to $150 million of its stock, securities and warrants.
The company does not have any current plans for an offering and will establish any terms when they make an offer.

Perform A Background Check On Anyone, Anywhere In The World


The SEC must approve the filing before Renovis can offer stock.

Renovis discovers and develops drugs that treat neurological and inflammatory diseases. Shares closed Monday at $13.59 on the Nasdaq.

Drug developer Genzyme Corp. escalated a bidding war over AnorMed Inc. Tuesday, proposing a $580 million buyout for the Canadian drug company and topping a standing bid from Millennium Pharmaceuticals Inc.

The new proposed bid, which amounts to $13.50 per share, pushes past a $12-per-share, or $515 million bid by crosstown neighbor Millennium. AnorMed has already recommended the Millennium offer to its shareholders. In a statement, Genzyme said it is prepared to formally offer the bid, following a support agreement with the company.

"We are confident that AnorMed's shareholders will find this all-cash offer of $13.50 per share to be a compelling one that fairly rewards them for the value they have created through the development of Mozobil to date," said Henri A. Termeer, chairman and chief executive of Genzyme.

Genzyme's last offer of $8.50 per share was rejected by the company, at which point Genzyme brought the buyout deal directly to shareholders. That offer was set to expire but was extended to Oct. 23. At the same time, Millennium came in with its current bid.

The company said it raised the bid after studying the prospects for AnorMed's late-stage drug Mozobil, for cancer patients undergoing stem cell transplants. AnorMed called the drug promising and said it would commercialize the drug through its existing global transplant business.

AnorMed has until 4 p.m. Oct. 11 Pacific Time to make a decision on the new offer. If it agrees the offer is superior to Millennium's current bid, AnorMed would then have until Oct. 17 Eastern Time to enter into a support agreement. With that support agreement in hand, Genzyme said it would formally increase the bid to $13.50 per share and extend the offer to the morning of Nov. 1.

Millennium's offer is set to expire Nov. 10.

Genzyme's current offer of $8.55 per share is still open for acceptance until Oct. 23.

Shares of Genzyme fell $1.07 to $68.43 in on the Nasdaq while shares of AnorMed rose 55 cents, or 4.1 percent, to $13.85 in morning trading. Shares of Millennium fell 2 cents to $10.02 on the Nasdaq.

Biotech drugmaker ImClone Systems Inc. said Tuesday that its chairman and another board member resigned, following weeks of squabbles between the company and billionaire financier Carl Icahn, who was seeking their ouster. ImClone shares rose nearly 4 percent.

ImClone said in a statement that Chairman David M. Kies and board member William W. Crouse resigned effective immediately. Company spokesman David Pitts said Kies cited "personal and other reasons" while Crouse didn't give a reason for his departure.

Icahn, Kies, and Crouse could not be reached for comment.

But a person close to the company who asked not to be identified by name because of the sensitive nature of the matter, said the departures were not part of any deal with Icahn, who was seeking to remove half of ImClone's 12-member board, including Kies and Crouse.

Two weeks ago, Icahn, who owns about 14 percent of the company, filed a proxy statement to remove half the board because he said they have done a deplorable job running the company.

Last week, ImClone countered that investors should reject Icahn's proposal. Among the reasons cited was that Icahn blocked a $36 a share bid for ImClone from an unnamed pharmaceutical company.

On Tuesday, The New York Times reported that French drug maker Sanofi-Aventis SA had offered to buy ImClone. A spokeswoman for Sanofi-Aventis said the company does not comment on market rumors.

ImClone, which makes the cancer drug Erbitux, put itself on up for sale in January, but took itself off the market in August, saying it did not receive an offer at a fair price.

The latest development in the struggle for ImClone's board comes as Friedman, Billings Ramsey analyst Jim Reddoch lowered his U.S. sales estimates on Erbitux for the second half of the year, citing slower growth. His third quarter estimate fell to $176 million from $190 million while his projection for the fourth quarter sank to $181 million from $204 million.

Reddoch said sales pressure is expected to grow when Amgen Co. introduces a competing product later this year. Indeed, analysts have said it is unlikely that ImClone would fetch $36 a share now because of increasing competition and a recent loss in a patent case over Erbitux.

Kies, a member of the board since 1996, was appointed chairman in February 2004. He is a partner of the New York law firm Sullivan & Cromwell. Crouse, who became a board member in January 2004, is managing director and general partner of HealthCare Ventures LLC, one of the world's largest biotech venture capital firms.

Shares of ImClone rose $1.23, or 4 percent, to $31.13 in morning trading on the Nasdaq.