My Home About Me

by Richard Daverman, PhD
Centient Biotech Investor



After the closing bell, Genentech (DNA) reported an earnings increase of 68% over the year-earlier first quarter. The company made a profit of $421 million or 39 cents per share on revenue of $2.84 billion, a 43% jump. Excluding special expenses, Genentech earned $792 million or 74 cps, which was 7 cents above the average expected by analysts. The average estimate of revenue was $2.74 billion. In March, Genentech said it expected US sales to be flat with Q4 of 2006 at $2.05 billion. In after-hours trading, Genentech lost a little ground, moving 39 cents lower to $82.30.

Cell Genesys (CEGE) raised $60 million by selling 10.8 million common shares and warrants for an additional 2.2 million shares. The company will use the proceeds to fund its Phase III trial of GVAX, its immunotherapy for prostate cancer. GVAX is also in Phase II tests as a treatment for pancreatic cancer and leukemia. Investors were not pleased with the refinancing; they sold the stock off by 75 cents or 12%; it closed at $5.33.

Vical (VICL) reported that Vaxfectin, its vaccine adjuvant, provided a substantial boost to flu vaccines in mice. When added to Fluzone vaccine from Sanofi-Aventis (SNY), Vaxfectin caused a 60-fold increase in antibody response. Previously, Vical had said the adjuvant was effective in ferret models.

Nuvelo (NUVO) announced that NU206, a secreted protein in preclinical development, stimulated gastrointestinal (GI) epithelial cells. The epithelial lining is damaged in patients with inflammatory bowel conditions such as Crohn’s disease and ulcerative colitis. In animal tests, the compound decreased the severity of chronic colitis and reduced its symptoms, including weight loss, diarrhea and rectal bleeding. Nuvolo has been on the rise this week, based on rumors that Bayer (BAY) would resume tests of alfimeprase as a treatment for stroke. The drug failed two Phase III trials in late 2006. Disappointed that the news was not more positive, investors pushed Nuvelo 97 cents lower to $4.43, an 18% drop.

Genaera (GENR) cut its headcount by 30% while focusing on trodusquemine, its obesity treatment. The compound will begin a Phase I trial in Q2 of this year. The company will also continue its partnership with MedImmune (MEDI) that is developing an anti-interleukin-9 (IL9) antibody for asthma. Beside the workforce reduction, Genaera will also sell some assets. The company entered 2007 with $33.8 million in cash, which it says is enough for 2007.

A trial of Revlimid from Celgene (CELG) was halted, though the reasons for the stop were not disclosed. Recently, the Southwest Oncology Group announced that a low dose of dexamethasone, a steroid, plus Revlimid was more effective than a high dose of the steroid. It may be that the halt is an opportunity for patients to switch from one regimen to another.

Roche (RHHBY) signed a deal worth up to 195 million euros with French biotech Transgene S.A. to develop therapeutic vaccines for Human Papilloma Virus-mediated diseases. Transgene will contribute its lead candidate, which has completed Phase II tests as a treatment for cervical intraepithelial neoplasia. Transgene received 13 million euros upfront; the rest will be awarded if milestones are met.

Biotech took a small hit in today’s session. The AMEX Biotech index fell .38% while the S&P dropped .66% and Nasdaq was off by .74%.


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

Source: CentientInvestor.com



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