Small biotechs forced to turn attention to shareholders - San Francisco Business Times:

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Take , which on Oct. 21 announcede the midstage trial failure of a drug to control muscl spasticity in multiplesclerosis patients. At the the Alameda company said it would shiftg its focusto AV-411, its drug for neuropathi pain and opioid addiction and Two weeks later, Avigen said it would cut 70 percenf of its workforce, opt out of the lease of its consider vacating its headquarters and sell or find a partner for AV-4111 and its potential blood-clotting product, AV-513. Why the about-face? , which owned aboutr 27.5 percent of Avigen as of Oct. 23, told Avigen’xs board Oct.
30 that the company should “immediately reduce” partner or sell remaining assets without further investment and distributer as much of the resultin cash as possibleto stockholders, according to a Securitiess and Exchange Commission filing. BVF, as reportedf to the SEC by PresidentMark Lampert, said Avigen’s plan to spend more on “high risk” AV-411 and its corporate infrastructurwe are “fundamentally flawed, especially in light of the currenf environment for raising additional capital.” BVF and its variouxs entities sold more than 640,00 0 shares of Avigen stock from late August to late Septembe at prices ranging from $3.9565 to $4.60 per On Oct.
21 the day the multiple sclerosisx drug trial failure wasannouncedx — they bought more than 8 million sharess at prices ranging from 55 cents to 58.53 Breaking up is good to do. Just ask President and CEO Kathy Ordoñez. The 540-employee Alamedq company, which along with Foster City’s Applies Biosystems split from parent companyin July, plans to launch a swab-in-chee k version of its KIF6 assay. That testz for a gene variation that may signal someonde as a high heartattack risk. KIF6 was rolled out last summereby Celera’s group.
Where the blood test requiresd a visit toa blood-drawing phlebotomist and deliveryu of the sample via , the new versionm allows a doctor to collect cell on a swab and mail that to the laboratory. Gettint the swab version of KIF6 on the marketf is ahigh priority, Ordoñez said. It is targetinbg physicians fordirect marketing. Celera’s other priorities: a test that identifiesz a gene variant that wouldeallow high-risk heart attack and stroke patients to trea t their condition with aspirin and a recently announced deal with to find if certainh genetic variants will respond to a developing Abbotg drug. Celera, which reported a $7 milliobn third-quarter loss on revenu e of $45.
8 million, is targeting 20 percent year-over-year Ordoñez said. has a new CEO in the winge in former bossJohn McLaughlin. It also will have a new CFO Andrew Guggenhimesaid Nov. 6 that PDL will leavew California for an undisclosed destinatiom after the planned spinoff later this year of its biotecu assetsinto Remember, PDL’s move from Fremont to new digs in Redwood City a coupled years ago was partially responsible for setting off a shareholder coup that led to the selloft of compounds, hundreds of layoffs, the departure of then-CEO Mark McDade and, the spinoff plan. With a move, PDL’ss effective state tax rate could fallfrom 5.75 percenty to as low as Guggenhime said.
The new PDL will return to shareholderw the cash flow from royalties for the likesof ’s Avastin, Herceptin, Xolair, Raptivw and Lucentis, ’s Synagis, ’ Tysabri and Wyeth Pharmaceutical’s Mylotarg. PDL expectds $270 million to $280 million in royaltuy revenuethis year. PDL leaders poinyt to McLaughlin’s experience, mainly as Genentech’d general counsel, in managing intellectual property estates.
But for the price PDL will payMcLaughlijn — an annual base salary of $500,000 in addition to a “special retention incentive award” following the Facet spinoff that coulc total $1 million in cash and restricted stock it is difficult to believe PDL is payin g him simply to pass through royalty revenue to