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Published in U.S. 1 Newspaper on March 8, 2000. All rights reserved.
Good News for Biotechs: Liposome
While the scientists probe the mysteries of the human
genome, biotech stocks are heating up. Two companies, Liposome and
Medarex, are making news now. Liposome has been bought by Elan Corporation,
Ireland’s biggest drugmaker, at a price estimated at $15.28 per share,
and an additional $2.50 per share if the company’s breast cancer drug,
Evacet, wins approval by the European Union. Medarex had a "follow-on"
public offering and netted $388 million, with the stock rising more
than $20 in the first day (and more than $70 for the week!).
Only three months after it collected $3 million in tax credits by
selling its losses to Public Service Enterprise Group, Liposome announced
the merger with Elan Corporation, the Dublin-based biotechnology company
that specializes in drug-delivery systems. Liposome manufactures and
markets cancer-fighting drugs. The merger, announced this Monday,
March 6, gives Liposome shareholders .3850 of an Elan share for each
share of Liposome common stock. The transaction is valued at $575
Liposome will remain a separate division of Elan, which will use its
European sales-force to market two of the Princeton company’s most
promising drug therapies — AbelcetR, an alternative treatment
for cancer patients, and Evacet, a treatment for breast and other
cancers that was denied approval by the U.S. Food and Drug Administration
in the fall of last year. Liposome will retain its facilities and
300 employees, including 190 workers in Princeton at the headquarters
on Research Way. But CEO Charles Baker is expected to leave.
Although Elan already markets pain-reducing drugs for cancer patients,
the merger signaled the company’s continued move into oncology and
exploration of different drug delivery techniques.
As the name implies, Liposome uses tiny fat droplets to deliver its
anti-cancer drugs, therefore minimizing toxic side effects. One of
its most important drugs, AbelcetR, is a lipid-based formulation of
amphotericin B used to treat severe fungal infections in patients
who reject conventional cancer treatments. That drug alone pulled
in roughly $86.2 million for the company in 1999, making Liposome
one of the few biotechnology companies to make a profit.
On the other side of the Liposome coin, though, Evacet, the drug for
treating breast and other cancers, was rejected by the U.S. Food and
Drug Administration in September, causing Liposome’s shares to fall
56 percent in six months. Following that debacle the company announced
that it was considering buyout offers.
Liposome officials have said the company still believes in Evacet,
and with Elan’s backing, Liposome will now continue to develop Evacet
for markets outside the U.S. If it is approved by the European Union,
Liposome shareholders will get a cash payment from Elan of $98 million.
Following the merger announcement, Elan’s shares fell 1.7 percent
— to 41.3 euros in Dublin — but remain up 45 percent for the
Princeton Forrestal Center, Princeton 08540-6619. Charles A. Baker,
chairman and CEO. 609-452-7060; fax, 609-452-1890. Home page: http://www.lipo.com.
On the heels of being featured in Business Week’s breathless
account of biotech’s resurgence ("Move Over, Dot-Coms. Biotech
is back," in the March 6 issue), Medarex, the State Road-based
biotech, pushed its planned follow-on public offering onto the table.
It priced a public offering of common stock at $172 on Friday. That
day its Nasdaq shares went up to $206 and closed at just over $194.
The underwriters, led by Morgan Stanley Dean Witter, exercised an
overallotment option so the offering totaled 2,399,204 shares and
netted $388 million.
As Business Week points out, this surge is fueled in part by dotcom
profits, which are burning a hole in successful investors’ pockets,
and in part by interest in biotechs from the big pharmas. The biotech
mania may seem eerily like the one in 1990 that lasted just one year
before cratering. The difference is that now these companies finally
have some products ready for market and are beginning to show some
Medarex, for instance, has signed deals with 15 companies that want
to use its special mouse, engineered to have a human immune system.
Its competitor, Abgenix, has signed 17 deals. "Even though there
is no clinical proof that the antibodies being developed by Abgenix
and Medarex work better than other kinds," says the article, "investors
are scrambling to grab a piece of the action."
- Medarex (MEDX), 707 State Road, Princeton Gateway,
Suite 206, Princeton 08540. Donald L. Drakeman, president. 609-430-2880;
fax, 609-430-2850. Home page: http://www.medarex.com.
The stock dropped nearly 10 points after a Newark judge dismissed the company’s patent claim to keep its $1.5 billion cancer drug, Taxol,
out of the hands of genetic drug makers. Ivax Corp. will be able to put its own version of Taxol on the market. In an amazing week, Escalon
tripled in value and Integra, NexMed, and Nycomed all soared. (Excerpt of stock table caption).
- AcuTech Consulting Inc., 4301 Route 1 South, Suite
200, Box 255, Monmouth Junction 08852-0255. Larry Aleksandrich, group
manager. 609-750-0788; fax, 609-750-0156. Home page: http://www.acutech-consulting.com.
The consulting firm moved from 116 Village Boulevard to 3,800 square
feet at Princeton Executive Center. It provides consulting, training,
and software services for state and federal process safety and risk
management regulation compliance. It is a value-added reseller of
five software product lines for risk management and process safety.
For instance, Release Rate is a Windows tool that calculates discharge
rates based on accidental releases of stored toxic or flammable materials
from process equipment and piping. Phone and fax are new.
- Physical Acoustics Corp., 195 Clarksville Road,
Princeton Junction 08550. Sotirios Vahaviolos Ph.D., president and
CEO. 609-716-4000; fax, 609-716-0706. Home page: http://www.pacndt.com.
The acoustics emission testing firm, which monitors metal fatigue
using sound, has merged with Scanning Systems International, a systems
integrator of PC-based ultrasonic inspection systems. As a result
of the merger, Richard E. Kazares, former president of SSI, has become
general manager of PAC’s new ultrasonic systems division. Formerly
located in Silver Spring, Maryland, SSI is in the process of being
located to PAC’s Princeton Junction Headquarters. Both companies are
now a part of MISTRAS Holdings.
- Slide Design and Production Inc., 44 South Main
Street, Pennington 08534. Richard Van Fleet, president. 609-737-1123;
fax, 609-737-6345. Home page: http://www.slidedesign.com.
This 10-year-old firm, which specializes in corporate presentations,
is updating itself with a new interactive/web division. The Interactive
Media Group of Slide Design and Production will focus on design, computer
animation, and interactive presentations for corporate websites and
CD-ROMs. It will specialize in interactive training programs, physician
education packages, medical simulations, and video capture.
- WithumSmith&Brown, 100 Overlook Center, First Floor,
Princeton 08540. Leonard H. Smith CPA, shareholder in charge. 609-520-1188;
fax, 609-520-9882. Home page: http://www.withum.com.
A Westfield-based CPA firm, Galinkin, Gelinas & Company, has joined
WithumSmith&Brown, the accounting and consulting company.
Also, a North American taxation group has been formed to use resources
of HLB International, a world wide organization of professional accounting
firms. The new group — HLB North America Tax Services Group —
will help international taxation clients in areas such as transfer
pricing, expatriates, hybrids, E-commerce taxation and local issues.
- CIMserve (Construction Information Management),
2127 Route 33, Suite B, Hamilton 08690. Vincent A. Trossello PE, owner.
609-584-5455; fax, 609-584-5755. Home page: http://www.constructioninfo.-
The data processing consulting firm has moved from North Main Street
in Cranbury to a building it purchased on Route 33. It provides data
to the construction industry for mid-range IBM systems.
- e-vue, 33 Wood Avenue South, Eighth Floor, Iselin
08830. Kenneth Sun, president. 732-590-0102; fax, 732-452-9726.
A spinoff from Sarnoff, e-Vue, has left its parent company and moved
to new facilities in Iselin. The company develops, markets, and distributes
MPEG-4 compliant interactive multimedia technologies.
- Myron K. Parker, 46, on January 28. He was a self-employed
- Edward James Folmer on March 3. He sold real estate for
Weidel and chaired Mansions in May 2000 for the Mercer ARC.
- The Mercer Oak, circa 300, at Princeton Battlefield on
March 3. The tree had sheltered General Mercer at the Battle of Princeton
on January 3, 1977. In recent years it had been supported by wires
and braces. It fell in a windstorm.
- Susanne Marie Guner, 43, on March 4. She had been a strategic
coordinator at Strategic Technology Systems and Base Ten Systems at
1 Electronics Drive.
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