Biotech Day in Review: Allergan Expands Obesity Franchise

Allergan (AGN) paid $97 million to acquire EndoArt SA, a Swiss company that makes remote-controlled implants to treat morbid obesity and other conditions.

Allergan already had a number of treatments for obesity, including gastric bands and balloons, the latter being approved only outside the U.S. In its Q1 report, Allergan will write down a sizable portion of the purchase price as in-process research and development. Allergan was off by 96 cents at $112.47.

Genentech (DNA) struggled today under a double burden: its partner Roche (RHHBY) released data from trials of Avastin showing a low dose of the drug was just as effective in lung cancer as a high dose; and a Wall Street Journal article questioned whether a $2,000 injection of Lucentis was more effective for macular degeneration than a $40 shot of Avastin (see story). Genentech has been very successful at introducing new drugs for intractable problems, but its pricing has been aggressive, and it needs to maintain that pricing to meet its equally aggressive revenue goals. Genentech ended the day at $85.70, a loss of $2.04.

The GlaxoSmithKline (GSK) drug Advair produced disappointing results in patients suffering from chronic obstructive pulmonary disease [COPD]. Although Advair cut the risk of death by 17.5% over three years, the improvement was below the level of statistical significance. The data appeared in the latest edition of the New England Journal of Medicine. The drug reduced by 25% the incidence of other problems that required steroids, antibiotics or hospitalizations, and Advair improved lung function. GSK slipped 69 cents lower to $56.41.

Hollis-Eden (HEPH) released positive data from pre-clinical tests of a steroid compound in animal models of prostate and breast cancer. The compound, HE3235, stopped the growth of established prostate tumors and reduced tumor incidence in breast cancer. Hollis-Eden rose 5 cents to $5.56.

Ikaria and INO Therapeutics were both absorbed into a new investment company called Ikaria Holdings in a transaction valued at $670 million. The venture brought in $300 million in new capital, and most of that, apparently, went to INO Therapeutics, though details were sketchy. Ikaria is developing the use of hydrogen sulfide to induce hibernation and metabolic control in patients. The idea is to slow down biological processes and damage until a problem (stroke, heart attack, etc) can be addressed. The use of hydrogen sulfide is still in the pre-clinical stage. INO has a number of gaseous drugs on the market, including nitric oxide to treat hypoxic respiratory failure in newborns.

According to Emergent BioSolutions (EBS), the National Institute of Allergy and Infectious Diseases has canceled its request for proposals to supply anthrax vaccines. Emergent had submitted a proposal. Emergent BioSolutions dropped $1.17 to $13.86.

GlaxoSmithKline [GSK] has begun telling doctors that rosiglitazone, a drug for type 2 diabetes, has increased the incidence of fractures in female patients. The fractures occurred in the hands, wrists and feet of patients.

Cell Genesys (CEGE) and Medarex (MEDX) reported that GVAX, the immunotherapy for prostate cancer from Cell Genesys, produced encouraging results in a Phase I trial. The drug is being administered as an adjunct to MRX-010, an antibody that Medarex is developing with Bristol-Myers Squibb (BMY). The combination has been given to 12 patients so far. Of six in the highest dose group, five have shown anti-tumor activity, including a drop of at least 50% in PSA levels. Cell Genesys slipped 2 cents lower to $3.54, and Medarex was down 3 cents at $14.57.

The loss in Genentech, together with a 1% drop in Amgen, took its toll on biotech yesterday. The Centient Biotech 200™ fell 31 points to 4054, a loss of .76%. The S&P 500 slid just .09%, and Nasdaq actually closed higher, with a gain of .26%.

Disclosure: Centient management holds a position in Genentech shares and does consulting work for Genentech.