Biotech Values

[DewDiligence]

Genmab Shares Hit All-Time High

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061018:MTFH25804_2...

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Wed Oct 18, 2006 9:19 AM ET
By Ben Hirschler

LONDON, Oct 18 (Reuters) - Denmark's Genmab <GEN.CO> consolidated its position as a leader in European biotech on Wednesday by unveiling a new antibody technology and predicting it would soon sign a deal for its biggest new drug hope.

Shares in Genmab climbed 6.4 percent to a record high of 265 Danish crowns by 1300 GMT, valuing the group at around $1.8 billion.

Genmab said its new UniBody technology produced a smaller antibody format with a longer anticipated therapeutic window than current antibody drugs.

As a result, UniBody drugs should be able to reach parts of the body that conventional large-molecule antibodies cannot reach, offering scope for new ways to treat diseases such as cancer and arthritis. "We're ready to use it ourselves and also license it to partners, so products could start coming from this immediately," Chief Executive Officer Lisa Drakeman told Reuters before the company's first R&D day for investors in London.

Commercial products using UniBody are still many years away but Drakeman said the first clinical trials using the new technology could start within two years.

Smaller antibodies are widely seen as the next big breakthrough in antibody-based treatments, since they can reach new targets in the body and could potentially be given by mouth rather than injection.

Several biotech companies are working in the area, including Belgium's Ablynx, which is using llama DNA to develop its own so-called Nanobody product. Ablynx hopes to float on the Euronext stock market next year.

NEW CLINICAL TRIALS

Genmab also announced an expansion to clinical development programmes for its advanced drug candidates HuMax-CD20 and HuMax-EGFr, to study their efficacy in treating cancer at an earlier stage. HuMax-CD20 will also be tested as an arthritis treatment in a clinical study due to commence next year.

HuMax-CD20 is viewed as the company's most valuable drug and Genmab hopes the new batch of trials will help lay the groundwork for its commercialisation.

By retaining rights to the product through several stages of clinical development Genmab has been able to increase its value -- but Drakeman said she was now ready to strike a partnership deal, by the middle of 2007 at the latest. "We are in very active discussions ... we've narrowed the list down to some extent but there are still quite a few contenders for this antibody," she said.

"The interest is very high and it is a very competitive situation for the parties that are pursuing HuMax-CD20."

Some analysts believe the experimental cancer product, which is similar to Rituxan from Roche and Genentech <DNA>, could potentially generate worldwide sales of $2 billion a year, making it a lucrative target for larger pharmaceutical and biotech firms.
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