By Randall Osborne
West Coast Editor
SAN FRANCISCO - As the J.P. Morgan Healthcare Conference closed Thursday, the mood among many in the up-and-down industry was mixed.
"We're waiting to see if [investors] are going to do what it seemed like they were willing to do at the beginning of the year," said a spokesperson for the conference - adding, maybe only half-joking, that personnel at the bank are waiting by the phones for orders to start rolling in.
Stephen Sherwin, chairman and CEO of Cell Genesys Inc., did his best to pump up enthusiasm, trumpeting the firm's $10 million new subsidiary to focus on gene therapies for central nervous system (CNS) disorders. He also detailed the firm's GVAX cancer vaccine, in Phase II trials for prostate cancer, and its other programs.
"We have a pretty good track record of success in the subsidiary area," Sherwin told the crowd. "I don't have to remind you that Abgenix [Inc.] began as a wholly owned subsidiary of Cell Genesys, and has become a Nasdaq 100 company in under five years. So, stay tuned."
Last November, Abgenix Inc., of Fremont, Calif., raised $230 million through a private placement, and Cell Genesys hauled down $50 million through the sale of its shares, keeping 10.5 percent ownership. (See BioWorld Today, Nov. 3, 2000.)
With 60 percent of the new gene therapy company, Cell Genesys, of Foster City, Calif., also will provide the firm, called Ceregene Inc., with access to technology and patents for its efforts toward treating such disorders as Alzheimer's disease and Parkinson's disease. Already, a Phase I trial is under way for the former, and preclinical studies are in progress for the latter.
"Somatix [Therapy Corp.], the company we acquired in 1997, had a very active program in the CNS area," Sherwin said. "This is a substantial lift for the position of neurologic gene therapeutics." (See BioWorld Today, Jan. 14, 1997.)
Through collaborations and other efforts, Sherwin said, gene therapy is "where the future of Cell Genesys lies. We think we've taken a leadership position as a gene therapy company, and you can expect more of that from us in the future."
Meanwhile, the cancer treatment vaccine, which uses genetically modified tumor cell lines, is showing positive early Phase II results with a small sample. It works as well as chemotherapy, and without the side effects, Sherwin told the crowd.
The vaccine's mechanism of action "is no longer theory," Sherwin told the assembly. "This is fact."
Cell Genesys' higher-potency formulation of the cancer vaccine "would be the product we want to take into Phase II trials, and we will introduce that into a Phase II study during the course of this year," Sherwin said, with a Phase III study planned for 2002.
Other GVAX trials are planned in lung cancer and pancreatic cancer, as well as myeloma and leukemia. Cell Genesys' hemophilia and cardiovascular programs are moving ahead, Sherwin said, and will be partnered.
The company's stock (NASDAQ: CEGE) closed Thursday at $19.25, up 62 cents.
As the last of the 5,000 attendees at this year's conference made ready to leave the Westin St. Francis hotel Thursday afternoon, Todd Baker, director of U.S. equity research for the sponsor of the bellwether event, said he saw "confusion, on a short-term basis, over where the stocks are heading, which direction."
At the same time, he said, investors and company officials showed "confidence in the fundamentals, and in the long-term outlook."