NeoGenesis Pharmaceuticals Inc. said Thursday it will use its chemical genomics technologies to identify therapeutic agents for infectious diseases in a multiyear collaboration with Aventis Pharma SA.
The announcement comes within days of NeoGenesis’ decision to withdraw its initial public offering filed in mid-November for a maximum of $115 million. (See BioWorld Today, Nov. 20, 2001.)
Satish Jindal, CEO and chief science officer at Cambridge, Mass.-based NeoGenesis, wouldn’t discuss particular financials terms related to the Aventis Pharma agreement. He did say the drug discovery and research and development deal will provide NeoGenesis with an up-front payment, a multiyear commitment of research and development funding, preclinical and clinical milestones and royalties.
“This is a good deal for us because it is quite substantial and it is an important disease indication,” Jindal said. “We get these collaborations because our strategy in chemical genomics allows us to bypass bottlenecks of the current drug discovery process.
“The drug discovery process is a multistep, very-linear process. Chemical genomics is a very fast, nonlinear process, that not only provides high-quality drug leads against a very large number of disease associated proteins, but also provides more in a shorter period of time,” he said.
For Antony, France-based Aventis Pharma, NeoGenesis will use its ALIS (Automated Ligand Identification System) screening platform and NeoMorph compound libraries to identify compounds that show a high degree of binding affinity to Aventis targets. Also, NeoGenesis will optimize and validate any biologically active compounds identified through the collaboration.
The Aventis Pharma agreement is not the first large, successful company NeoGenesis has collaborated with. NeoGenesis has forged nine deals in its history of less than five years, with seven of these nine signed in the last eight months. Prior to the Aventis deal, NeoGenesis signed deals with Schering-Plough Corp., of Madison, N.J.; Merck & Co. Inc., of Whitehouse Station, N.J.; Tularik Inc., of South San Francisco; Biogen Inc., also of Cambridge; Celltech Group plc, of Slough, UK; Oxford GlycoSciences, of Oxford, UK; and Immusol Inc., of San Diego.
With all this on its side and in a kinder market, an IPO should have been fairly easy. The market has been tight and Jindal assured BioWorld Today that the company pulled its IPO for that reason alone.
“We have a very strong cash position and a very promising business outlook,” Jindal said. “Obviously, the market is not favorable at this time. We will go back when the market conditions improve.”
Neither Jindal nor the company’s chief financial officer, David Hunter, would discuss details of the company’s cash position, short of saying it’s good.
About a month after NeoGenesis filed for its IPO, the company set its share total at 6.2 million and its price range at between $12 and $14 per share. On Feb. 6, NeoGenesis decreased the range to between $9 and $10 per share. Jindal pointed out that around the same time that NeoGenesis was facing a poor market, ZymoGenetics Inc., of Seattle, experienced the same issue.
“It had an IPO just before us, and its share price was dropping and investors were nervous,” he said.
ZymoGenetics raised $120 million in the industry’s first IPO this year. The company sold 10 million shares at $12 each. In its prospectus, ZymoGenetics estimated an IPO of about $180 million. (See BioWorld Today, Sept. 11, 2001, and Feb. 4, 2002.)