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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: John O'Neill who wrote (19721)	4/28/1998 7:17:00 AM
From: Henry Niman	Respond to of 32384

Speaking of approaches, here's an interesting FT article that came out over the weekend: BRITISH BIOTECH: McCullagh's single-minded vision By Jonathan Guthrie Keith McCullagh, chief executive of British Biotech, christened his last sailing boat Bumpy Ride. That was prescient: he is battling a storm that besets a company formerly seen as the flagship of the biotech sector. The whirlwind has been whipped up by Dr Andrew Millar, head of clinical research. Dr Millar was dismissed on Monday for allegedly revealing to shareholders confidential information on internal strategy debates. Those shareholders included Perpetual and Mercury Asset Management, which jointly hold about 20 per cent. Since the dismissal of Dr Millar, it has emerged that the US Securities and Exchange Commission is investigating the accuracy of statements by the company on the development of the anti-cancer drug, marimastat. It has also been suggested that British Biotech heard of objections from European drugs regulators about the anti-pancreatitis treatment, Zacutex, nine months before telling investors that approval for the drug was likely to be delayed. The company said, however, it was in regular contact with regulators during trials, and it was not normal practice to share all correspondence with investors. Dr Millar has said Mr McCullagh turned down his requests for emergency reviews of trials on both marimastat and Zacutex. But the crux of Dr Millar's complaints is that the strategy shaped by Mr McCullagh was plain wrong: that the hefty spending plans of the company were too heavily predicated on the success of a handful of drugs trials. The protagonists in what has become a toe-curlingly public confrontation present a piquant contrast. Dr Millar is a straight-laced scientist, who seems genuinely bewildered by the controversy that surrounds him. Mr McCullagh, a former vet and research scientist, is an entrepreneur. His burning desire is to turn the business he founded with 11 staff in 1985 into a world-class pharmaceuticals business. Not for British Biotech the half-measures of merely discovering and developing drugs, before handing them over to big pharmaceuticals companies for the tricky task of commercialisation. Instead, Mr McCullagh's vision is of an integrated company, maximising revenues by distributing its drugs through its own salesforce. Success depends largely on one product, marimastat. Its job is to inhibit the production by the body of an enzyme which encourages tumour growth. Marimastat has forecast peak sales of over œ800m. Nick Woolf, a pharmaceuticals analyst at Bank America Robertson Stephens described it as "first in its class. Competitors are years behind British Biotech." The first set of results from final phase III clinical trials on marimastat will be published in the first half of next year. If these are good, the company will have no problems refinancing on the expectation of regulatory approval to sell the drug, paving the way to profitability in the early part of the next decade. What alarms some analysts is that these early results will be from trials of marimastat against one of the toughest forms of the disease: pancreatic cancer. But Mr McCullagh said pancreatic cancer was a natural choice: "The disease is very difficult to treat, and that is why we picked it. If it works it will be a major break-through." Anxious to avoid the impression he is betting the kitty on one horse, he said another seven cancer trials "are equally important." But Mr McCullagh could be unseated by fund managers sympathetic to Dr Millar, who are lobbying for him to be replaced. The irony is that some of the personal characteristics that have helped him create a company that last year was close to joining the FTSE 100 appear to have contributed to its current problems. One of these characteristics is what James Noble, who stepped down as finance director of British Biotech last February, describes as: "a tremendously consistent vision of the company's future. From day one, he has wanted it to be an international pharmaceuticals company like Glaxo." Colleagues who do not share that vision say they have sometimes received short shrift. A leading investor in biotechnology companies said: "We look for the messianic type, but he needs to have disciples who help him keep his feet on the ground. Keith is often unable to hear what people say to him." Mr McCullagh denies this, saying communication is a vital part of managing a team made up largely of scientists: "They are highly intelligent and rational so they need to be given good reasons for management decisions." He believes in "creating definite rules and structures, which are still loose enough for innovation to flourish." Communications between the company and the outside world have been strained this week. The main public response of British Biotech to media criticisms has been to threaten Dr Millar with legal action if he reveals "further" confidential information. It has also taken out an injunction to prevent The Times newspaper from publishing a confidential report on share dealings by a group directors that included Mr McCullagh. The lack of public comment on Dr Millar's disclosures has infuriated many analysts. Mr Woolf said: "I am upset that all these revelations have dribbled out and that the company did not disclose the information promptly as it should have done." However, Mr McCullagh said "I am satisfied that the responses and comments we have given were appropriate and correct." He was stoical about the volatility of shares in British Biotech. "The market works on pure sentiment. We have had periods when the market has been over-enthusiastic and other when the shares have been over-sold." This is understandable. A market happiest assessing companies with earnings and tangible assets has struggled in valuing loss-making businesses, whose only real assets are ideas. Analysts have also had problems adjusting to companies run by former scientists rather than career managers. Even the fiercest critics of British Biotech among the analysts now believe its shares are undervalued at a price only 30p above a break-up value of 20p. Some believe Mr McCullagh will have to go before the price recovers. Others think the company has no future without him. Mr McCullagh has no time now to sail Blue Genes, the craft which has replaced Bumpy Ride. He has always worked a 12-hour day, with only a day and a half off at the weekend. Since Dr Millar was suspended in March, even this respite has disappeared. Fund managers and analysts supportive of Dr Millar would like Mr McCullagh, who is 54, to spend more time sailing. But they will have a tough fight. Mr McCullagh said: "I do not take [the attempt to displace me] seriously. I am the chief executive. I have the support of the board and I expect to continue."

To: John O'Neill who wrote (19721)	4/28/1998 7:26:00 AM
From: Henry Niman	Respond to of 32384

Here's what FT said about BBIOY yesterday: BRITISH BIOTECH: Millar talks of his worries about trials By Jonathan Guthrie Dr Andrew Millar, the recently-dismissed head of clinical trials at British Biotech, the troubled biotechnology company, revealed yesterday he had been worried about results of trials on the company's acute pancreatitis drug Zacutex in November 1996. Dr Millar, who was dismissed a week ago for discussing the company's internal strategy debates with shareholders, said he raised his concerns about Zacutex with Peter Lewis, a main board director. The FT has received a copy of a letter the company received in May last year from the European Medical Evaluation Agency listing five serious objections to the trials which stood in the way of Zacutex receiving approval for sale in the EU. The agency said that it was concerned that no information was given on the screening process used to select patients and that the reconstruction of missing data by British Biotech should be explained. Dr Millar was worried that the results of a US trial of Zacutex - identified by the number 215 - were not consistent with positive results from a small UK study trial 214. As a result he "unblinded" the study - found out which group of patients were taking the placebo and which were taking the drug. He told the FT the results were "inconsistent with the Trial 214 and inconsistent with great optimism that the drug would be effective". He said he kept Dr Lewis up-to-date with results from November to April 1997 but he did not share his knowledge with subordinates running the trial so that bias could not be introduced. Although British Biotech had received the letter from the EMEA last May, it did not announce until February this year that approval for the drug was likely to be delayed. British Biotech said last week it was in continuous discussion with drugs regulators and it was inappropriate to share all the correspondence with investors. Documents obtained by the FT show the strength of the objections raised by the EMEA. It said that evidence that Zacutex reduced deaths among acute pancreatitis sufferers was insufficient because it related only to a sub-group of patients. The EMEA also questioned what it saw as inconsistencies in methodologies used in the trial and asked for information on the effect of different levels of dosage. The FT has also obtained a copy of a memo sent by Dr Millar to directors including Keith McCullagh, chief executive of British Biotech, on October 13 1994 which raised concerns about potential harmful side-effects in patients taking the anti-cancer drug batimastat. In January 1995, Mr McCullagh sold a large position of shares in British Biotech. In February, the company announced delays in the development of batimastat, which was subsequently dropped. Dr Millar was dismissed for discussing internal strategy debates at British Biotech with executives of Perpetual, the investment manager with a 9.5 per cent stake in the company.

To: John O'Neill who wrote (19721)	4/28/1998 7:32:00 AM
From: Henry Niman	Respond to of 32384

Here's more on BBIOY's trials: BRITISH BIOTECH: Clinical trials and tribulations Jonathan Guthrie reports on the problems at British Biotechnology after the dismissal of Dr Andrew Millar When British Biotechnology dismissed Dr Andrew Millar, its head of clinical research, on Monday, it looked to critics as if the UK's flagship biotech company was dropping the pilot halfway through the hazardous journey into port. The job of Dr Millar was to supervise the clinical trials on which the fate of the company now hangs. Final tests - phase III trials - are being conducted on two blockbuster products. They are marimastat for cancer, with a potential market of up to œ4bn a year, and Zacutex, a drug for acute pancreatitis, with possible revenues of over œ1bn. If the drugs work well, regulators will approve them for sale. The resulting revenues should produce fat dividends, the company hopes, from 2002 onwards. This would justify the patience of investors for tolerating years of losses. But the outlook for British Biotech will be bleak if final trial results, expected in the first half of next year, are poor. Dr Millar could not increase the efficacy of the drugs. But he could ensure the tests were run in a way that would help convince regulators to approve them. According to one fund manager with a stake in the company: "His job was one of the most important at British Biotech, because the whole valuation of the company depends on whether clinical trials are conducted to a high standard." That job now falls to Dr Peter Jensen, who in January was appointed head of research, a position senior to that of Dr Millar. His task would look easier if previous results had been better. But discouraging early data on marimastat hit the shares in November 1996. Zacutex has had bigger setbacks. Last July, US trials were extended by a year because of disappointing results in Europe. In February the company announced that European drugs regulators were delaying approval for Zacutex pending results from the US trials. Investors fear that Zacutex and marimastat could suffer the fate of batimastat, a cancer drug dropped by British Biotech in 1995. This helps explain a slump in the share price that has cut the market capitalisation from œ1.9bn in 1996 - when inclusion in the FTSE 100 seemed likely - to œ370m now. The dismissal of Dr Millar has meanwhile dragged into the open a debate on corporate strategy that British Biotech would prefer to have kept private. Dr Millar was fired for giving executives at Perpetual, the investment manager with 8 per cent of British Biotech, details of this debate at their instigation. Dr Millar wanted British Biotech to sell drugs through distribu-tion deals with big pharmaceuticals companies. Harnessing their marketing muscle would mean giving them a chunk of sales revenue. But in return British Biotech would make big sav-ings on overheads, which have grown steeply in recent years. His views clashed with executives keen to keep as big a proportion of sales revenue as possible for British Biotech by selling through their own salesforce. They feared he was weakening the hand of the company in future negotiations with potential partners by discussing the issues openly. Katie Arber, head of corporate communications at British Biotech said: "We are still evaluating how to approach the North American market with marimastat, which could include partnerships in several possible forms . . . but the strategy of the company in Europe is to develop and market its products itself, building up operations country by country." Many stock market analysts are uncomfortable with go-it-alone marketing in any territory. It is a job they think big pharmaceuticals companies should do. Their doubts about Britsh Biotech have merely deepened with the dismissal of Dr Millar, and the news that the US Securities Exchange Commission is investigating whether press releases on marimastat test results were over-optimistic. There are also concerns that British Biotech waited nine months before alerting the market to the objections of European regulators to test results on Zacutex. But the company said it corresponds frequently with regulators during trials. It said investors would be swamped, and rivals helped, if every exchange was published. British Biotech may now be locked on to a course from which it is too late to turn aside.

To: John O'Neill who wrote (19721)	4/28/1998 11:06:00 AM
From: WTDEC	Read Replies (1) \| Respond to of 32384

John, why do you say LGND's approach is more complex than injectable cytokines? While the STAT technology may be harder to develop, it may result in a better, more specific way to treat disease than injected cytokines. We know small molecules would be less costly and easier to administer than injections. That said, I am not a scientist so I hope Henry, our resident expert, will correct my understanding. Regards, Walter

To: John O'Neill who wrote (19721)	4/29/1998 6:49:00 AM
From: Henry Niman	Respond to of 32384

Here's more from FT on BBIOY: BRITISH BIOTECH: Millar discloses motives Dr Andrew Millar, the sacked director of clinical research at British Biotech, yesterday faxed an "open letter" to the Financial Times. It attempts to explain his motives in making a series of damaging disclosures about the company. We reproduce an edited version: "I was never intent on being destructive as is evidenced by my initial, confidential approach to shareholders. There still is a very clear, simple and constructive way ahead for the company. Marimastat (the lead drug of British Biotech) is a very interesting drug which must be researched, but it could take a few years or more before we know whether it works on cancer or not. This is totally at odds with the business plan. This must be changed to safeguard the future of the compound, and therefore the company, its employees and its shareholders. I presently estimate the chance that marimastat is a useful medicine in cancer at about 40 per cent. This is a personal view, but, to my mind, for a drug at this stage, it is a very good prospect. There are other diseases in which it may work and these too look good prospects. Properly managed British Biotech remains a good bet. I am surprised, given what I thought 18 months ago, to say that I fear early data on the anti-pancreatitis drug Zacutex misled us. The current data need to be carefully reviewed and, if incompatible with success, this very expensive project should be shut down and the money spent on something with decent prospects. The employees at British Biotech have had a terrible time over the last few weeks and I apologise for that. If the plans of the company are changed their long-term futures will be much surer and the shareholders' prospects better. There are parts of the company which are clearly extravagant and constructive ways of dealing with them must be found. I originally intended to continue as a full-time employee at British Biotech when I started this process with the shareholders. I would still like to be involved in rebuilding the company and taking it forward, although the exact way in which that can be achieved needs to be defined. I would like to take this opportunity to address some broader issues. I see a need for: regulations that ban the disclosure of detailed clinical results in press releases on unlicensed compounds; compulsory meetings between regulators and drugs companies, at end of phase II drug trials and before the start of phase III trials; an experienced and qualified medical director on the board of all public companies undertaking clinical research. Finally, if you will allow me a little self-indulgence, I would like to say that truth can appear to be painful, but it is a powerful weapon and honesty is an impenetrable armour." British Biotech said yesterday that it was preparing a detailed report for shareholders answering concerns raised by Dr Millar.

To: John O'Neill who wrote (19721)	4/29/1998 6:53:00 AM
From: Henry Niman	Read Replies (1) \| Respond to of 32384

Here's more: BRITISH BIOTECH: Perpetual may face EGM By Jonathan Guthrie Perpetual, the investment manager which holds a 9.5 per cent stake in British Biotech, said yesterday it might call an extraordinary general meeting to demand reforms at the company, including a shake-up of senior management. The move would be a further blow to the board of the embattled company after allegations by Dr Andrew Millar, who was dismissed on Monday as head of clinical trials, about the conduct of board directors and the handling of clinical trials of drugs vital to the company's future. The stock exchange is now believed to be investigating share sales by directors, including founder and chief executive Keith McCullagh, and the US Securities and Exchange Commission is assessing whether press releases on trials of marimastat, Biotech's anti-cancer drug, were over-optimistic. Analysts have called for Mr McCullagh to step down. Bob Yerbury, chief investment officer of Perpetual, who stressed that his views were personal, said: "There will have to be changes. I cannot say whether Mr McCullagh should be replaced. But things cannot continue as before." Perpetual is understood to be seeking the support of other shareholders. It needs another 0.5 per cent to call an EGM. The meeting would consider the appropriateness of British Biotech's commercial strategy. Dr Millar has criticised plans for the company to become a large pharmaceuticals business, selling its drugs through its own sales force. Mr Yerbury said: "My own view is that small biotechnology companies should out-license their products [to big distributors]." He said current spending of about œ60m a year was "out of kilter" with the prospects for drugs under development. He also said the sacking of Dr Millar for discussing company strategy with Perpetual was "inappropriate".

To: John O'Neill who wrote (19721)	4/30/1998 7:18:00 AM
From: Henry Niman	Respond to of 32384

JO, Tinkering with the inner workings of a cell has been going on for some time now, but molecular advances allow such tinkering to now be done much more rationally. Premarin and Tamoxifen have been around for some time now. Both target the estrogen receptor which belong to a huge family of intracellular receptors (IRs). However, the sequence of such structures (glucocorticoid receptor) was first published in 1985 (by LGND exclusive consultant, Ron Evans). Similarly, use of tretinoin (active ingredient in Retin-A, Renova, and Vesinoid) has been studied for several decades, but the sequences of the the retinoic acid receptors (RARs) and RXRs have been known for less than 10 years. LGND really fine tunes well established approaches. Of course any new drug can have unforeseen complications and some of these side effects are specifically addressed with second and third generation products such as SERMs. LGND is extremely well positioned in IRs as well as STATs and the street is slowly starting to wake up.

To: John O'Neill who wrote (19721)	4/30/1998 7:27:00 AM
From: Henry Niman	Respond to of 32384

Here's the publication on the sequence of the Glucocorticoid Receptor: Nature 1985 Dec 19;318(6047):635-641 Primary structure and expression of a functional human glucocorticoid receptor cDNA. Hollenberg SM, Weinberger C, Ong ES, Cerelli G, Oro A, Lebo R, Thompson EB, Rosenfeld MG, Evans RM Identification of complementary DNAs encoding the human glucocorticoid receptor predicts two protein forms, of 777 (alpha) and 742 (beta) amino acids, which differ at their carboxy termini. The proteins contain a cysteine/lysine/arginine-rich region which may define the DNA-binding domain. Pure radiolabelled glucocorticoid receptor, synthesized in vitro, is immunoreactive and possesses intrinsic steroid-binding activity characteristic of the native glucocorticoid receptor. PMID: 2867473, UI: 86092206

To: John O'Neill who wrote (19721)	4/30/1998 7:28:00 AM
From: Henry Niman	Respond to of 32384

Here's more tinkering: Proc Natl Acad Sci U S A 1998 Apr 28;95(9):4991-4996 Localization of nascent RNA and CREB binding protein with the PML-containing nuclear body. LaMorte VJ, Dyck JA, Ochs RL, Evans RM Howard Hughes Medical Institute, The Salk Institute for Biological Studies, La Jolla, CA 92037. [Record supplied by publisher] The cellular role of the PML-containing nuclear bodies also known as ND10 or PODs remains elusive despite links to oncogenesis and viral replication. Although a potential role in transcription has been considered, direct evidence has been lacking. By developing a novel in vivo nucleic acid labeling approach, we demonstrate the existence of nascent RNA polymerase II transcripts within this nuclear body. In addition, PML and the transactivation cofactor, CREB binding protein (CBP), colocalize within the nucleus. Furthermore, we show that CBP in contrast to PML is distributed throughout the internal core of the structure. Collectively, these findings support a role for this nuclear body in transcriptional regulation. PMID: 9560216