HGS to spin off gene research

December 14, 2005|By MEREDITH COHN | MEREDITH COHN,SUN REPORTER

Human Genome Sciences Inc. said yesterday that it would spin off its CoGenesys division as an independent company that will focus on the early development of the Rockville biotech's gene-based research and leave the commercialization of later-stage products already in clinical development to the parent company.

Human Genome plans to lend CoGenesys $10 million as startup money, but the move to create two companies is still contingent on CoGenesys finding investors and partners to fund the new company by May 31.

Craig A. Rosen, Human Genome's president and chief scientific officer, will become CoGenesys' executive chairman and chief scientific officer. Steven C. Mayer will leave his position as executive vice president and chief financial officer at the parent company to become CoGenesys' chief executive officer. H. Thomas Watkins will remain chief executive officer of Human Genome and assume the title of president.

CoGenesys was created as a division in the first quarter of this year with approximately 60 employees, all of whom will become part of the new company.

The officials believe the move will better allow CoGenesys to attract outside investors, while saving Human Genome about $35 million in operating dollars over the next three years.

Human Genome has no commercial products but has several in Phase 1 and Phase 2 clinical trials, including treatments for anthrax, HIV/AIDS, lupus, rheumatoid arthritis, chronic hepatitis C and forms of cancer. Planning for Phase 3 development of LymphoStat-B for lupus treatment is under way.

"The decision to spin off CoGenesys as an independent company is the logical next step, which will facilitate the ability of CoGenesys to fund itself primarily from sources outside [Human Genome]," Watkins said.

Human Genome made the announcement after the stock market closed yesterday. Earlier, its shares closed at $9.01, up 16 cents, on the Nasdaq stock market.

meredith.cohn@baltsun.com

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