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Bioscience Breakthrough
2000 will be remembered as the year a new industry began truly to pay it forward
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Business New Haven
12/11/2000
By: Mitchell Young
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If 1999 was the year of the Internet, it looks as though 2000 will be recalled as the year of the Biotech Breakthrough.
It's certainly been a great year for raising money, with regional biotech companies raising more than $1 billion in the public markets and their valuations settling in at more than $4 billion combined by year's end.
And while the market may be beginning to take the eventual success of these companies for granted, New Haven's biotech scientists are nothing if not a intrepid band of pharma revolutionaries, that still travel with the sores of a “great march” on their feet.
What's more dangerous than a guerrilla group? A well-funded guerrilla group. Here in Bio-Haven they're taking on spinal cord damage, cancer, immune system deficiencies and of course the human genome. Truth be told, with a little luck there will likely be some winners from among this fearless band.
Flush with funds, the companies have acquired and spun off new companies and have radically expanded their facilities and research staffs.
Alexion Pharmaceuticals (NASDAQ: ALXN) for example, founded in 1992, increased its research expense to more than $40 million from just under $24 million for the 12 months ended July 31.
In late October, Alexion raised $209 million by selling 2.3 million shares of common stock to US Bancorp Piper Jaffray Inc. Its shares have been trading recently in the $80-$90 range, well above the 12-month low of $12 but below the high of $119.875.
In September the company acquired Prolifaron Inc., a privately held development-stage biopharmaceutical company located in San Diego, Calif., in exchange for $41 million in stock. The company said Prolifaron has an extensive combinatorial human antibody library, technologies and expertise.
Alexion scientists also showed they may well be playing in the big game in confronting one of the greatest challenges of modern medicine. Together with researchers from the Yale University School of Medicine, Alexion researchers issued a report in Nature Biotechnology explaining how they transplanted genetically modified pig cells into surgically damaged spinal cords of rodents. The cells helped spur regeneration of the axons of the spinal cord and contributed significantly to the repair of severed spinal cords in rodents.
Alexion has outgrown its Science Park home and is expected to move into a new facility in Cheshire.
Alexion Pharmaceuticals (NASDAQ: ALXN), , 25 Science Park, Suite 360, New Haven 06511 (203-776-1790, www.alxn.com)
Yr. founded: 1992
Market cap. (11/27): $1.33 billion
12-month stock range: $16.25-$119.875 ($88 on 12/2)
CEO: Leonard Bell, M.D.
No. employees: 110-plus
...
After nearly a decade in the trenches, the folks at Science Park based Genaissance Pharmaceuticals (NASDAQ: GNSC) have begun to seize some high ground. In early August the company had a successful IPO, raising $90 million at an offering price of $13 per share. The stock reached $34.50 but has drifted back to earth ($17.50) as the company reported third-quarter earnings. The company's market cap is nearly $500 million.
Research and development expenses, expanded for the first nine months to$15.6 million compared to $3.9 million for the first nine months of 1999.
Even with this enormous increase in research these gene genies are likely to be at it for a while - as of September 30, the company had $121 million in cash.
Genaissance scientists also got to celebrate Thanksgiving with the November 27 announcement that it had entered into a multiyear worldwide licensing agreement for its HAP technology to a Johnson & Johnson-affiliated company, Janssen Research Foundation. Employing Genaissance technology, researchers try to predict the response to drugs using an individual's own DNA.
Genaissance Pharmaceuticals (NASDAQ: GNSC), 5 Science Park, New Haven 06511 (203-773-1450, www.genaissance.com)
Yr. founded: 1992 (renamed Genaissance 1997)
Market cap. (12/2): $444 million
12-month stock range: $13-$34.50 ($19.375 on 12/2)
CEO: Gualberto Ruano, M.D.
No. employees: 113
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For Neurogen Corp. (NASDAQ: NRGN) of Branford 2000 has been a steady-as-she-goes type of year. The stock finally rebounded to a range between the high 20s and mid-30s following a two-year exile into the low teens. The past year the stock has seen a low of $13.50 and a high just above $51 per share.
The company had few big announcements, save one: CEO Harry H. Penner Jr. has decided to step down. Penner's reign has been highly successful for Neurogen. Revenues increased more than four-fold, market cap has grown to a half a billion or so and a wide variety of major pharmaceutical companies have signed agreements with the Branford firm.
This June the company raised more cash by selling $41 million in new stock in a private placement at $25 per share. As of September 30 it had $115 million in cash on hand.
On the scientific front, Neurogen has expanded it anti-obesity efforts with partner Pfizer to deal with companion animals as a potential treatment population. Neurogen and Pfizer have also claimed progress in its clinical development drug programs to treat anxiety and Alzheimer's disease, with positive results in Phase I trials.
Neurogen Corp.(NASDAQ: NRGN), 35 Northeast Industrial Road, Branford 06405 (203-488-8201, www.neurogen.com)
Yr. founded: 1987
Market cap. (12/4): $534 million
12-month stock range: $14-$51.625 (stock price 12/2 $30.875)
CEO: Harry H. Penner Jr. (announced resignation)
No. employees: 168
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Meriden-based: Packard BioScience (NASDAQ: PBSC) has had a very busy year. The newly public company is a global developer, manufacturer and marketer of instruments, consumables and services for drug discovery, genomics and biochip analysis. Its busy year included forging alliances with a bunch of new partners, a successful IPO, an acquisition here and there, sale of its Canberra division and a major increase in its product line.
Packard BioScience's companies - Packard Instrument Co., BioSignal and CCS Packard - provide instrumentation, reagents, automation and microplate products for pharmaceutical drug-discovery applications.
The market has been listening, and early this spring Packard had a successful IPO that raised $108 million at an offering price of $9 per share. Shares are currently trading at about $17.50 off a high of 28, giving the company a current market cap of approximately $670 million.
Emery G. Olcott, Packard's chairman and CEO, is predicting revenues of about $178 million for the year and is looking for increases of 15 to 20 percent for the company as a whole. Parts of Packard are growing faster that others, of course. “We anticipate that our Packard BioChip Technologies business should grow in excess of 50 percent,” Olcott said.
The company is exiting the nuclear industry with the sale of its 35-year-old Canberra division, which makes equipment to detect and monitor radioactivity, to Cogema Group, a French nuclear service and uranium producer, for $170 million. Cogema is owned in part by the French government.
In other news, the aforementioned Harry H. Penner Jr. is joining the Packard board of directors.
Packard BioScience, 800 Research Parkway, Meriden (NASDAQ: PBSC) www.packardbioscience.com
Yr. founded: 1965
Market capitalization: $680 million
12-month stock range: $8.75-$28 (stock price $10 on 12/2)
CEO: Emery Olcott
No. employees: 1,446
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Among all the heralded New Haven bioscience upstarts, Vion Pharmaceuticals (NASDAQ: VION) may well prove to be the sleeper of the bunch. Its stock has traded between $5 and $30.125 over the past 12 months. But while Vion appears to have sufficient cash ($27 million) to fund its research activities, it is not nearly as flush as some of its New Haven-area peers. The company says it expects to spend approximately $18 million of that grubstake over the next year.
What the company does have in abundance, however, is a novel technology in Phase I human clinical trials that could have an impact on the treatment for cancer.
In September, the company released a study done in conjunction with doctors from New York's Sloan Kettering Cancer Center, showing how its technology could place re-engineered Salmonella bacteria into tumors that would accumulate a radioactive compound making it easier for existing imaging technology to “see” the tumors.
The company is using a similar approach to attack tumors as well. Currently in Phase I safety and tolerability trials on humans with advanced cancer at Beth Israel Deaconess Medical Center in Boston, the Cleveland Clinic Foundation, the National Cancer Institute and the Royal Marsden Hospital in the UK.
The human testing follows success in inhibiting the growth of tumors in mice. The company also asserts that its mighty Salmonella can produce tumor-fighting substances from within the tumor itself.
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Vion Pharmaceuticals, (NASDAQ: VION) 4 Science Park, New Haven 06511 (203-498-4210, www.vionpharm.com)
Yr. founded: 1994
Market cap. $375.6 million
12-month stock range: $5 -$30.625 (stock price $8 12/2)
CEO: Alan Kessman
No. employees: 45
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Finally, New Haven's brightest genomics star has been CuraGen (NASDAQ: CRGN), starting off the year with CEO Jonathan Rothberg being named Business New Haven's Businessperson of the Year.
Its stock has soared from $16.9375 to a stratospheric $128.25. Current price is about $34 per share and the market cap has settled in $1.4 billion neighborhood (a very lovely neighborhood, as you may well imagine).
Also, as a result of a recent stock offering at $43 per share, CuraGen has more than $450 million in the bank. (For more detailed information on CuraGen, see the Business Wire profile in November 27 issue of Business New Haven, available online at www.businessnewhaven.com.
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