Life Science Weekly inSite (Oct. 24 - 30)

Life Science Weekly inSite (Oct. 24 - 30)
A weekly round-up of biotech’s top stories from around the world
By Suvarna Bhatt, Feature Editor

The top headline this week was news of a potential deal-breaker for ImClone's takeover by Eli Lilly. According to news on Tuesday, a pension plan company has filed a legal challenge against ImClone in an effort to block Eli Lilly’s proposed $6.5 billion purchase of the company. The company, the State-Boston Retirement System of Massachusetts argues that the deal is flawed and unfair to ImClone stockholders. The pension plan company and some individual ImClone shareholders are hoping to stop the merger from moving forward. They are accusing ImClone’s board of directors of breaking their fiduciary responsibilities when they agreed to the buy-out deal.

The second largest news this week in biotech was world that Wyeth would narrow its early-stage research to a half-dozen therapeutic areas. The giant company said it would continue to sell existing products and conduct research on drugs already in development. Wyeth said it will focus on specialized medicines and conditions that require treatment by specialists. The company emphasized its new direction is not a cost-reduction effort at all and the money spent and the number of employers won’t be affected.

The largest acquisition of the week was GlaxoSmithKline’s agreement to buy Genelabs Technologies for $57 million yesterday. The California-company is geared toward developing drugs that would work against the hepatitis C virus (HCV). The acquisition will strengthen Glaxo’s efforts in developing drugs for HCV. Glaxo said it would purchase all of Genelabs’ outstanding common stock for $1.30 per share which is more than 5 times the price of Genelabs’ share at the close of the NASDAQ on Wednesday.

Chad Therapeutics shook things up on Wednesday, but not in a good way. The company announced in a press release that it has suspended operations due to an inability to raise additional capital. Chad has been looking for more financing to support the marketing of it’s sleep disorder products to no avail. The company’s proprietary FloCHANNEL Diagnostic System received FDA marketing clearance just a few months ago in July. The company is looking for other funding resources but reports that current prospects are not promising. Chad can not assure it will be successful in raising the funds it requires to restart operations. The Board of Directors is considering liquidation of the company under Chapter 7 of the federal bankruptcy laws.

Biogen Idec is haunted by more trouble with its drug, Tysabri. On Wednesday, the company notified regulators of a new case of a potentially deadly brain disease in patient with multiple sclerosis who is being treated with the drug. Biogen and its partner, Elan Corporation said in July that two cases of the brain infection, called progressive multifocal leukoencephalopathy (PML) were reported in Europe. These were the first cases to be reported since Tysabri was taken off the market in 2005 after three other patients developed PML. Tysabri re-entered the market one year later with warnings of the drug’s potential side-effects. Biogen’s shares fell about 12 percent on Wednesday in after-hours trading.

VioQuest Pharmaceuticals provided a strategic alternatives review and operations update on Monday. The company said it will not be able to complete its financial statements and file its Form 10-Q by November 14, 2008. Buried in a press release, the company announced a need for capital and announced that Michael D. Becker, President and Chief Executive Officer, and Christopher P. Schnittker, CPA, Vice President and Chief Financial Officer of VioQuest have provided written notice to the Board of Directors of their intent to terminate their employment with the company.

Seattle-based company ZymoGenetics splashed into top headlines on Tuesday after the company announced that a test of one of its drugs targeted at kidney disease has been discontinued. The company observed an increased risk for severe infection when the drug was used. The test was being conducted by Merck Serono, which acquired the rights to the drug earlier this year from ZymoGenetics. Stock in the company fell more than 28 percent on Monday.

MethylGene also made headlines on Monday when it announced it reacquired rights to MGCD0103 from Celgene and announced its intentions to develop a strategic plan to focus on the development of a proprietary clinical pipeline. MethylGene will begin to discontinue its discovery research activities which will result in a step by step workforce reduction. The company said about half of the staff of 109 full time employees will be affected by the reduction. The company says it will have enough resources to carry out its planned development and operations until the third quarter of 2010.

In top news last Friday, The European Medicines Agency recommended the suspension of marketing Sanofi-Aventis' new weight-loss drug, Acomplia. The European regulator of medicines said there is an almost doubling in the risk of psychiatric disorders in obese or overweight patients taking the drug compared to patients taking a placebo. The drug won approval in the European Union in 2006. It has not yet received approval in the Unites States.

The second to last top story came from Abbott Laboratories last Friday. Abbott was told the FDA wants more time to review its experimental cholesterol drug, TriLipix. Although the drug is expected to be approved by the end of this month, Abbot says it still expects the drug will be approved on time since the company had not been asked to provide more data—merely that the regulatory agency needs more time to review drug data.

That’s it for this week's leading biotech news from the BioSpace news desk…stay tuned for the following week’s top movers and shakers…

Suvarna Bhatt is a Feature Editor for BioSpace.com. Click here to contact her.