Avalon Could Earn More Than $200M in Deal with Merck & Co.A
valon Pharmaceuticals, Inc. and Merck & Co., Inc. will together identify and develop inhibitors for a validated cancer target that has been tough to test outside the cellular context, according to Kenneth C. Carter, PhD, president and CEO of Avalon.
Investors reacted favorably to the news. On the day of the announcement, Avalon (AVRX) shares jumped 94 cents, or 20.6%, to $5.51 in morning trading on the Nasdaq Stock Market. Merck (MRK) added 47 cents, at $44.78, on the New York Stock Exchange.
The pharmaceutical industry has been focused on a drug discovery paradigm that starts with identifying a specific validated molecular target and testing them to identify candidates that can be used for therapeutic intervention, notes Dr. Carter. “Many of these targets are enzymes which facilitate biochemical reactions within cells that can be removed from their cellular context and tested in a high-throughput screening,” he said. “However, the majority of validated targets are not amenable to functional
testing outside the cellular context. These ‘intractable targets’ have frustrated drug developers for decades.”
Dr. Carter also noted that, “The combination of Merck’s considerable drug discovery and development capabilities and Avalon’s unique approach for targeting otherwise intractable cancer pathways should result in the identification of first-in-class drug candidates.”
The AvalonRx® will be used to screen a select set of compounds from Merck’s compound library and identify hits against this target. Avalon will optimize compounds to a preclinical candidate-selection stage. Merck will be responsible for the clinical development, regulatory approval and commercialization of product candidates.
According to the drug discovery, development and commercialization, Avalon may receive milestones exceeding $200 million and royalties on marketed products. The timeline for discovery and preclinical portions of the collaboration is expected to be three years, according to Dr. Carter.
Added Lex Van der Ploeg, PhD, vice president, Merck Research Laboratories and site head, Merck Boston, “We are very pleased with this agreement, and believe this collaboration has potential to provide significant synergy in drug discovery.” – Querida Anderson
OXiGENE Sets Fiscal 2007 PrioritiesO
XiGENE, Inc. (OXGN) is a clinical-stage biotechnology company that develops novel therapeutics for the treatment of cancer and eye disease. OXiGENE recently reported operational and financial results for its fourth quarter and fiscal year 2006.
For the fourth quarter of 2006, OXiGENE reported a net loss of approximately $3.4 million, or $0.12 per share, compared to a net loss of approximately $3.4 million, or $0.16 per share, in the fourth quarter of 2005. For the 12-month period ending December 31, 2006, OXiGENE reported a net loss of approximately $15.5 million, or $0.56 per share compared to a net loss of approximately $11.9 million, or $0.61 per share in 2005.
As of December 31, 2006, OXiGENE reported cash, cash equivalents, and marketable securities of approximately $45.8 million, compared with approximately $58.9 million at the end of December, 2005. Cash utilization for 2007 is anticipated to be between approximately $16 and $22 million in support of the OXiGENE’s ongoing research and development efforts.
According to Dr. Richard Chin, president and chief executive officer of the company, “OXiGENE has developed a clear and focused strategy, demonstrated sound execution on key scientific and development projects and committed to establishing strong partnerships with the addition of a chief business officer. We are pursuing anaplastic thyroid cancer as our lead targeted indication, and we believe we have a development strategy that will make CA4P the first vascular disrupting agent on the market.”