West Coast Editor

SAN FRANCISCO - Distinguishable by the light green bags slung over shoulders, attendees of the 23rd annual JPMorgan Healthcare Conference surged through the streets here, gathering for the popular event in the Westin St. Francis Hotel.

Among the newsmakers on day one of the meeting was Regeneron Pharmaceuticals Inc., which got $50 million from VEGF Trap partner Sanofi-Aventis Group, of Paris, $25 million of which is a milestone payment related to ongoing work against cancer.

The other $25 million "had to do with signing this agreement, which included [Sanofi-Aventis] giving [Regeneron] back the eye program," said Leonard Schleifer, Regeneron's president and CEO, who is attending the conference. Half of the second $25 million is repayable to Sanofi-Aventis after the vascular endothelial growth factor antagonist technology, known as VEGF Trap, is commercialized.

Regeneron's stock (NASDAQ:REGN) closed Monday at $8.47, up 32 cents.

Most recent word regarding the product against cancer came in October, when Tarrytown, N.Y.-based Regeneron and Sanofi-Aventis said VEGF Trap had been granted fast-track status by the FDA in a "niche cancer indication," with a clinical trial in that indication to start this year.

Sanofi-Aventis "doesn't want to lay out the competitive road map, but I can tell you they completed a very detailed review of the program, and put out a pretty strong statement today," Schleifer said Monday.

"There was huge anticipation here," he added. "Investors wanted to know how Sanofi would come out on the VEGF Trap." The potential $485 million deal was signed in the fall of 2003. (See BioWorld Today, Sept. 9, 2003.)

As for eye diseases, he said, "we've shown unequivocal data in primates that you can have a dramatic response in models of [age-related macular degeneration]. It binds both the long and short form of VEGF, and we think both of them are important players."

The FDA-approved therapy Macugen (pegaptanib sodium), from Eyetech Pharmaceuticals Inc. and Pfizer Inc., both of New York, binds to only one form, he noted. "We're getting ready to initiate Phase I/II trials in the first half of this year," Schleifer said, obviously pleased to have regained all rights to eye applications for local delivery of VEGF Trap to treat eye conditions. (The partnership is not pursuing systemic delivery for those indications.)

Regeneron's IL-1 Trap product failed to meet its primary endpoint in a Phase II rheumatoid arthritis trial in the fall of 2003, but the company decided to continue development based on positive trends, and Schleifer is expected to update investors on the program during a presentation at the conference today.

"We had clear evidence that the drug was active in RA, but we hadn't seen the full extent of the dose response," he said. During the past year, Regeneron has reformulated the drug to test it at higher doses and in healthy volunteers.

"We've looked at some rare genetic diseases, as well," Schleifer said. "I think we're going to convince the world that [the IL-1 Trap] is an important product opportunity," not only in "a host of inflammatory diseases" but in such indications as acute coronary syndrome and osteoarthritis.

Schleifer also was expected to talk about Velocimmune, which he expects will become the "next-generation standard" for making human monoclonal antibodies. "Rather than just taking a chunk of human immune system and putting it randomly in the mouse," he said, the new system is able to "manipulate in a precision mode large amounts of DNA," which operates in the context of the mouse immune system.

More news about Velocimmune will be emerging this year, Schleifer said.

The JPMorgan conference (formerly known in the industry as "H&Q," since it once was sponsored by Hambrecht & Quist) listed about 6,000 registrants this time around.

"I've been at it almost 14 years," Schleifer said. The traditional January event offers, as ever, a venue for companies to "show their wares and lay out the challenges of the year ahead."

Now a wider-spectrum health care meeting than before, the JPMorgan conference has transformed into what some regard as a less-than-ideal arena for new, growing companies to make themselves known, leading the Biotechnology Industry Organization to sponsor its first "Emerging Company Investor Forum" in San Francisco last October. (See BioWorld Today, Oct. 18, 2004.)

JPMorgan's event has been pared down - now having none of the roundtables, panel discussions or closing "analysts' picks" sessions common to earlier conferences - which seemed fine to many attendees, since much of the action takes place behind closed doors anyway, where investors meet company leaders.

"The more it changes the more it comes back to the old thing," Schleifer said. "It's always been multi-room, parallel-track company presentations. That hasn't changed."

But the St. Francis hotel has. The revered "big clock" under which many arranged to meet at appointed hours has been moved to another spot in the lobby. A more elaborate transformation that took place in the fall is the upscale, first-floor Michael Mina restaurant, named after its famous chef. For biotech's high rollers, Mina's fixed-price seasonal menu asks $78 for three courses, each containing six dishes with variants on the main ingredient.

The JPMorgan meeting continues through Thursday.

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