CoGenesys Inc., a Rockville biotech spun off from Human Genome Sciences Inc. in 2006, is being sold for $400 million to Teva Pharmaceutical Industries Inc., an Israeli company that specializes in generic drugs, the companies announced yesterday.
In a statement, Shlomo Yanai, Teva's president and chief executive officer, said Teva had decided it needed to grow in biopharmaceuticals, and was interested in CoGenesys for its "breadth of technologies and the depth of their team and pipeline."
Mark A. Rampy, chief business officer for CoGenesys, said Teva's plan was to "keep people in place here in Rockville." He said CoGenesys believed it fit well with Teva because Teva has been moving increasingly into biopharmaceuticals.
Rampy said one of Teva's largest sellers is Copaxone, a biopharmaceutical injection for multiple sclerosis, with annual worldwide sales of more than $1 billion. Teva - with nearly 27,000 employees and sales of $8.4 billion in 2006 - has the potential to do large-scale manufacturing and marketing for CoGenesys if it gets any of its drug candidates approved.
Traditional pharmaceutical companies have been acquiring biotechs in recent years to increase the size and range of their drug-development pipe- lines.
"The big drug companies have found it easier to buy innovations than to develop them," and have been shifting money from research budgets to acquisitions, said G. Steven Burrill, chief executive officer of life sciences-focused San Francisco merchant bank Burrill & Co.
From the biotechnology side, Burrill said, biotech companies are selling at premiums of 50 percent to 100 percent of their market value, meaning a privately held company such as CoGenesys can bring in substantially more money through a sale than it could by going public.
CoGenesys becomes the third Maryland biotech in less than a year to be acquired by a foreign company. Last year, London-based AstraZeneca PLC bought Gaithersburg-based MedImmune for $15.6 billion - the largest price ever paid for a Maryland company - and Dutch biotech Qiagen NV paid $1.6 billion for Gaithersburg-based Digene Corp.
CoGenesys' top executives, Craig A. Rosen, who was president and chief scientific officer at Human Genome Sciences, and Steven C. Mayer, who had been executive vice president and chief financial officer at HGS, will stay with the company.
CoGenesys focuses on drug development, including products that would use a proprietary technology that makes drugs stay active longer, requiring less frequent doses - perhaps a weekly injection instead of once or twice a day. Most of the compounds in its pipeline are longer-lasting versions of already approved medications.
So far, it doesn't have any products approved for marketing. It has one drug in midstage testing, neugranin, a treatment for neutropenia, a blood disorder characterized by a low number of a certain type of white blood cells. It is doing early-stage clinical trials on cardeva, a heart failure medication, and has three other drugs in its preclinical pipeline.