MedImmune to acquire Gaithersburg biotech Cellective Therapeutics

September 15, 2005|By Tricia Bishop | Tricia Bishop,SUN STAFF

MedImmune Inc. announced plans yesterday to acquire another Gaithersburg biotech company, Cellective Therapeutics Inc. - a startup drawing attention from investors because of its research into treatments for cancers and various autoimmune diseases.

Terms of the cash deal, expected to close next month, were not revealed, though MedImmune said the transaction would cause 2005 earnings per share to drop 20 cents - to between 4 cents and 10 cents - because of a "one-time in-process research and development charge."

Wall Street's assessment of the news was difficult to discern. MedImmune's stock traded at twice the average volume, but the price was hardly affected. Shares closed down 19 cents to $29.07 on the Nasdaq stock market.

For MedImmune, best-known as the maker of FluMist, the acquisition furthers a strategy of beefing up its store of new drug candidates in the areas of cancer and autoimmune diseases such as lupus and rheumatoid arthritis - in this case, by adding three preclinical drug programs from Cellective.

"It's another step in continued buildout of our pipeline," said MedImmune spokeswoman Jamie Lacey. Last month, the 2,000-employee company announced it would develop a GlaxoSmithKline-created drug that could prevent blood infections in underweight newborns.

For Cellective, the merger means its products have a better chance of making it to the marketplace.

"It's always desirable to have larger biotech and or pharmaceutical companies help support programs and projects," said Arthur M. Mandell, Cellective's president and chief executive officer since last September.

Because of the acquisition, Cellective's programs "will now benefit from the vast resources and expertise of MedImmune," he said.

But what will happen to Cellective's team of five full-time employees is still up in the air.

At this point, "there are no employees that have been extended full-time permanent offers at MedImmune," said Mandell, who plans to leave the company when the deal closes next month.

A Maryland resident and former senior vice president and chief business officer at Human Genome Sciences and president and chief executive officer of Stemron Corp. - both of Rockville - Mandell is the main reason Cellective moved here last year, leaving its North Carolina roots behind.

"There were abundant resources available and talented management in Maryland," Mandell said. He had hoped the move would help the company "progress very quickly."

Cellective had spun out of Duke University in 2003, setting up shop first in the Durham, N.C., area and taking with it technology licensed from the Dana Farber Cancer Institute, an affiliate of Harvard Medical School, and Duke University through Thomas F. Tedder, chairman of Duke's immunology department. Those affiliations helped the fledgling biotech draw money from investors.

In 2004, the five-person company raised $27.5 million in financing from venture capital firms - including MedImmune's funding subsidiary - and well-established businesses like California's Genentech Inc., an industry pioneer. The amount was more than five times the average invested in early-stage life science companies during the third quarter of 2004, according to the National Venture Capital Association.

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