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BioTech Navigator, March 1998
On the following pages are featured companies and a list of pharmaceuticals and biotechnology companies who have or are developing drugs or
diagnostics for a disease(s). The list contains competing companies who in our opinion have interesting therapeutics and may not be mentioned in our newsletter due
to lack of space. The companies are either: (a) pharmaceuticals, (b) companies having drug product(s) approved for marketing, and have growing product revenues,
(c) companies having promising drug candidate(s) in late stage clinical trials, and are expected to turn profitable in the next few years and (d) companies in
pre-clinical testing or early stage human clinical trials, and are not expected to turn profitable for years. Some of these companies may not be suitable for every
account, depending on investment objective, risk-tolerance and financial situation.
The stock price of emerging biotechnology companies with no significant commercial products may appreciate in value based on significant clinical
trials progress with potential new drug therapies, not on current revenue and earnings. Depending on the clinical trials phase results, the stock performance of
emerging public biotechnology companies may appreciates several times over the company's initial offering price. This price-appreciation potential creates
significant interest among risk tolerant, growth-oriented investors.
posed products. Magainin has no cur-
rent plans to establish a manufactur-
ing facility. Thus, Magainin expects
that it will be dependent to a signifi-
cant extent on contract manufacturers
for commercial-scale manufacturing
of its proposed products in accordance
with regulatory standards. Magainin
has contracted with Abbott Laborato-
ries (Abbott), with regard to the man-
ufacture of bulk Cytolex. The current
arrangement with Abbott provides for
the development by Abbott of a solu-
tion phase chemical process to manu-
facture bulk Cytolex on a commercial
scale. For bulk production of Cytolex,
Abbott will perform all activities nec-
essary to submit a Drug Master File to
the FDA in support of any filing for
marketing approval of Cytolex. This
arrangement provides forcash pay-
ments by Magainin to Abbott through
early 1998 aggregating approximately
$12,900,000, as well as the issuance
by Magainin to Abbott of up to
500,000 shares of its common stock
and the obligation to pay a royalty on
future sales of Cytolex. Through De-
cember 31, 1996, Magainin has paid
Abbott approximately $8,600,000 un-
der this arrangement.
XOMA Corporation is another
biotech developing products for the
treatment of infections, infectious
complications of traumatic injury and
surgery, and immunologic disorders.
XOMA's current product develop-
ment programs include: Neuprex(TM)
(rBPI(21)), a modified recombinantly-
derived fragment of human bacterici-
dal/permeability-increasing protein
("BPI"), a protein found in white
blood cells that is one of the body's
natural defenses against infections.
and utilizing new molecular genetics
technologies to identify bacterial
pathogenesis genes in order to dis-
cover and develop novel therapeutic
agents. Sounds pretty good.
Apparently others think so too, as
Microcide has entered into collabora-
tive agreements with three major
pharmaceutical companies (Johnson
& Johnson, Daiichi, and Pfizer) to
enhance its discovery and develop-
ment programs. As of December 31,
1996, Microcide's collaborative part-
ners provided them with $17.4 mil-
lion of license fees, milestone pay-
ments and research support payments
and $10.0 million in equity invest-
ments. Assuming each of the collabo-
rative agreements continues until its
scheduled expiration, Microcide will
be entitled to receive an additional
$29.1 million of research support pay-
ments. Microcide has retained full
rights to products that may result
from its internal, self-funded pro-
grams in bacterial cell wall inhibitors,
bacterial pathogenesis genes, and fun-
gal genomics.
Final words:
Bacterial infections are ubiquitous,
serious, and can become life threaten-
ing. The fact that we live with the
constant threat of bacterial infections
is reason enough to make antibiotics
the third largest pharmaceutical mar-
ket. With hope, change in prescrip-
tion practices and new products com-
ing out from the biotech industry, the
incidence of antibiotic resistance bac-
teria arising will decrease along with
serious bacterial infections.
Neuprex is currently in efficacy clini-
cal trials for four different indications.
Results from a Phase II study of Ne-
uprex showed a "positive overall ben-
efit" to patients suffering hemorrhage
due to trauma. XOMA said Neuprex
was "particularly effective" in reduc-
ing the incidence of pulmonary com-
plications compared with controls.
Based on data from the Phase II trial
and a follow-on pharmacokinetics
study, XOMA has designed and be-
gun implementation of the Phase III
pivotal trial.
Another biotech involved in an-
tibiotic development that BTN likes is
Microcide. This company does not
have a product in clinical trials yet,
but has promise. Microcide is taking
a broad approach to developing an-
tibiotics against bacteria, targeting
several different areas to rapidly de-
velop clinically useful antibiotics tai-
lored to treat specific bacterial infec-
tions, as well as antibiotic potentia-
tors, which will overcome resistance
pathways and restore usefulness to
existing antibiotics that have been
rendered ineffective.
Microcide's Targeted Genomics
programs seek to identify the pharma-
ceutically relevant portion of bacterial
genomes that are essential to bacterial
viability in vitro (the Essential Genes
Program) or to bacterial growth and
virulence in vivo (the Pathogenesis
Program). In the Essential Genes Pro-
gram, Microcide has identified ap-
proximately 90 essential gene targets,
which are being incorporated into
their high-throughput, multi-channel
screening system to discover new
classes of antibiotics. In the Pathogen-
esis Program, Microcide is developing
