Genta, Aventis Sign Biotech Deal
LINDA A. JOHNSON
Apr. 29, 2002
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TRENTON, N.J. (AP) _ Genta Inc. has signed a deal worth up to $480 million with European pharmaceutical giant Aventis to jointly finish testing and bring to market Genta's experimental drug Genasense, which appears to help other cancer drugs work better.
The collaboration announced Monday between tiny, money-losing biopharmaceutical company Genta and Aventis, a powerhouse in cancer drugs, vaccines and other medicines, is believed the second-biggest ever in the biotech.
``This validation from Aventis is very important'' for Genta, said Jessica Greenstein, biotechnology analyst at ThinkEquity Partners in Minneapolis. ``It's what Genta investors have been waiting for.''
Genta, of Berkeley Heights, is researching four different types of cancer drugs, but has yet to bring a drug to market. Founded in 1988, it has about 70 employees at its headquarters 20 miles southwest of Manhattan. Last year, it lost $47 million.
Aventis, on the other hand, has about 75,000 employees worldwide, annual revenues of about $20 billion and blockbuster drugs such as Allegra for allergies, Lovenox for preventing dangerous blood clots and Taxotere, for advanced breast cancer and non-small cell lung cancer.
Aventis, based in Strasbourg, France, was drawn to the deal partly because its own laboratory research showed combining Genasense with Taxotere made the latter more effective.
``They work synergistically,'' said Thomas Hofstaetter, senior vice president for business development at Aventis, which has its North American pharmaceutical headquarters in Bridgewater.
When cancer drugs start working on a tumor cell, the cells fight back by building up levels of a protein called Bcl-2 that prevents cell death. Genasense works by blocking production of Bcl-2, making it easier for other treatments to kill cancerous cells, said Bruce Seeley, head of new product licensing at Aventis.
``So it enhances the potential of chemotherapy,'' Seeley said. ``It is going to be explored in combination with radiation therapy or hormonal therapy'' eventually, as well as with other cancer drugs made by Aventis and competitors.
Under the collaboration, a joint team will work on completing late-stage patient tests of Genasense _ for the skin cancer melanoma, a rare blood cancer called multiple myeloma, a type of leukemia and non-small cell lung cancer. The team then will work on getting approval from the U.S. Food and Drug Administration, Seeley said.
Dr. Raymond P. Warrell Jr., Genta's chief executive, said the collaboration should ``maximize the blockbuster potential of Genasense'' worldwide.
Genta is to receive $60 million in cash and convertible debt right away, another $75 million shortly for reaching the next milestone in the development process, and further payments totaling $345 million, mostly in cash, for achieving other milestones en route to bringing the drug to market. Aventis then would help with advertising and distribution.
Greenstein said the terms are ``excellent'' for Genta, and the drug could be on the market by the middle of next year.
In the biggest U.S. biotech collaboration, Bristol-Myers Squibb Co. is paying ImClone Systems Inc. $1.9 billion for 20 percent of ImClone and much of the revenues from its experimental cancer drug, Erbitux. However, ImClone's problems in seeking approval for the drug, and a subsequent public squabble with Bristol-Myers, already have led BMS to write off more than one-third of that investment.
Genta shares rose $1.06, or more than 9 percent, closing at $12.78 on the Nasdaq Stock Market, while Aventis shares dipped 86 cents, closing at $68.69 on the New York Stock Exchange.
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