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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (2592)	1/17/2001 12:26:20 PM
From: Ian@SI	Respond to of 52153

WSJ Coverage of the Bayer - CRGN news: interactive.wsj.com Abstract... January 17, 2001 Bayer and CuraGen Will Study, Develop Small-Molecule Drugs By VANESSA FUHRMANS and SCOTT HENSLEY Staff Reporters of THE WALL STREET JOURNAL Bayer AG unveiled a wide-reaching biotechnology alliance with CuraGen Corp. that will cost it as much as $874 million (927.1 million euros), taking yet another expensive step to transform its pharmaceutical division into a genetic-research juggernaut. In the first phase of the deal, Bayer will use CuraGen's genomics technology to help it assess which of its compounds have the best chance of becoming marketable drugs over five years. Of the $124 million Bayer will pay, $85 million will go toward an equity stake in CuraGen and the rest toward research funding. In the second phase, the companies plan to discover, develop and jointly sell small-molecule drugs that treat obesity and adult diabetes, sharing costs of as much as $1.34 billion over a 15-year period. Bayer and CuraGen said they would split the investment and profits from drugs resulting from the pact 56% to 44%. ... Boosting Efficiency Those research partnerships have dramatically increased the number of potential biological targets available to the German chemical and drugs group. But like other major drug makers trying to exploit genetic data to develop blockbuster drugs, Bayer is under pressure to find more efficient ways to select with which to go forward in clinical trials. Despite the industry's expensive research efforts, the majority of compounds still end up failing in trials because of toxicity or other side effects. "We want to predict which will be the winners," said Wolfgang Hartwig, head of pharmaceutical research at Bayer. ... That's where CuraGen comes in. In the first phase of the Bayer deal, the New Haven, Connecticut, firm will screen drug candidates in Bayer's pipeline to weed out those likely to have toxic side effects and to fine-tune the development of those compounds that might work better for some people based on their genetic makeup. But like Human Genome Sciences and other companies that started as service providers for big pharmaceutical companies, CuraGen has decided that bigger profits lie in drugs made from its own discoveries. The second phase of the alliance with Bayer gives CuraGen its first partner with expertise in the development of small molecule drugs, the kind that can be taken as pills. CuraGen also has formed a partnership to develop antibody-based drugs with Abgenix, a Fremont, Calif.-based biotechnology concern and has said it would develop protein-based drugs on its own In all three types of drugs, CuraGen has made metabolic disease, including obesity diabetes, a research priority. The company wouldn't disclose what genetic discoveries it may have already made that could lead to obesity or diabetes treatments, but Jonathan Rothberg, Curagen's chairman and chief executive, said it has some 500 pending patents that would cover about 1,000 genes that are amenable to the development of drugs. The company expects to deliver an average of 15 targets a year to Bayer over five years.. 'The Big Leagues' "It moves them up into the big leagues," said Yi Ri, an analyst with Mehta Partners in New York. But, he added, the financial rewards of the obesity and diabetes drug development pact are hard to gauge, he said, because the potential revenues are many years away.