Although Gensia Inc.'s stock price still suffers ill effectsfrom last year's failure of the company's lead product,Protara, the San Diego-based firm has been rebuilding itscash position, bolstered most recently by a $50 milliondeal with the Upjohn Co.
The new agreement with Upjohn restructures an allianceformed in 1993 in which Gensia received rights to seekFDA approval and market certain chemotherapeutic drugsin the U.S. Upjohn sells the generic drugs overseasthrough its subsidiary, Australia-based Delta West Pty.Ltd. To date Gensia has received approval to sell twoproducts from the collaboration _ doxorubicin andetoposide.
Upjohn, of Kalamazoo, Mich., has agreed to pay Gensia$50 million in cash to re-acquire U.S. marketing rights tosome of the drugs. Gensia retained rights to doxorubicin,etoposide and cisplatin. The two companies declined toidentify the drugs returning to Upjohn's control. The dealstill must be approved by the pharmaceutical company'sboard. Upjohn is in the process of merging with Sweden-based Pharmacia AB in a swap of stock valued at about$13 billion.
"With the close of this agreement [with Upjohn] Gensiawill be in strong financial shape," said spokeswomanMartha Hough. As of June 30, 1995, Gensia had $34million in cash and for the first six months of this yearreported a net loss of $21.4 million.
Gensia's stock (NASDAQ:GNSA) has not rallied fromthe prolonged beating it took in connection with theclinical trial failures of Protara, an adenosine regulatingagent (ARA) tested as a treatment for myocardialinfarction in patients undergoing heart bypass surgery.When results from a third Phase III study were released inOctober 1994, the company's stock dropped to $5.50. Itclosed Friday at $5.125, up 25 cents.
What has been lost in the fallout from Protara, Gensiaofficials said, are the company's efforts at building abroad-based pharmaceutical business through thelicensing of generic drugs. In 1994 Gensia reported morethan $50 million in product sales, up from $17 million theyear before. Sales are expected to be down in the thirdquarter of 1995, but Gensia still is projecting revenues forthe year at between $50 million and $52 million.
Unfortunately, officials said, the progress of its genericdrug business has yet to be reflected in the company'sstock value.
In addition to its drug commercialization efforts, Gensiaremains involved in biotechnology drug discoveryresearch. Although it is no longer testing Protara, thecompany has not given up completely on the drug or itsbasic ARA technology.
Gensia is working to amend its application for approvalof Protara in Europe and is looking for a corporate partnerto pick up Protara's development in the U.S.
Two other ARA compounds also are in clinicaldevelopment, one for cardiovascular complications andanother for neurological disorders. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.