Replies to post #43078 on Biotech Values

[DewDiligence]

>MAXY – But I wouldn't invest in any company with Howard as CEO. He talks the talk, but doesn't walk the walk.>

I’ve never thought MAXY was cheap enough to pull the trigger, but I think they are interesting enough to follow (although somewhat less interesting without the FVIIa program).

I’m especially curious to see what becomes of Maxy-Alpha for HCV.

[DewDiligence]

Maxygen MAXY-Seven (rFVIIa) update:

Now that Roche has dropped out of the development program for MAXY-Seven (#msg-17854630), MAXY will no longer pursue acute bleeding conditions as an initial program goal. Instead, MAXY says it will focus on hemophilia and will file an IND to begin phase-1 in 1H08.

MAXY’s stated reason for dropping the acute settings from the development program is that the regulatory path for these indications is unclear. (Roche had previously cited the lack of a large-animal model for acute bleeding conditions as a significant impediment.)

Despite the talk of a strong commitment to a scaled-back MAXY-Seven program, I foresee the program’s getting squeezed by MAXY’s budgetary constraints and proceeding slowly, if at all. Moreover, for the reasons mentioned in #msg-17854630, I question the need for an “enhanced” rFVIIa product. Evidently, Roche does too.

[DewDiligence]

Bayer Licenses Maxygen’s FVIIa Analog:
#msg-30422488.

This deal, which includes $90M up-front for a drug not even in phase-1, goes a long way toward restoring MAXY’s tarnished reputation on Wall Street, IMO.


Let’s talk biotech!
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”

[DewDiligence]

Maxygen, Astellas Ink Global Collaboration for MAXY-4

[This is the second straight sweet deal for MAXY, whose reputation has been restored after having been tarnished from the failure of a “designer” follow-on to Roche’s Pegasys. The previous sweet deal was for MAXY’s FVIIa program, which MAXY sold to Bayer two months ago (#msg-30422488).]

http://biz.yahoo.com/bw/080919/20080918006161.html

›Friday September 19, 2:30 am ET

Astellas to Receive Rights to Commercialize MAXY-4 CTLA4-Ig Candidates

Maxygen to Receive $10 Million Up-front Payment, Up to $160 Million in Milestone Payments, Percentage of Sales

REDWOOD CITY, Calif. & TOKYO--(BUSINESS WIRE)--Maxygen, Inc. (Nasdaq: MAXY ) and Astellas Pharma Inc. today announced a global agreement under which Astellas will receive worldwide rights to commercialize MAXY-4 lead candidates for all autoimmune diseases and transplant rejection. MAXY-4 is Maxygen’s preclinical program to create a next-generation CTLA4-Ig protein for rheumatoid arthritis, transplant rejection and other autoimmune indications.

Under the agreement, the companies will co-develop MAXY-4 candidates for rheumatoid arthritis and other autoimmune diseases and Astellas will exclusively develop MAXY-4 candidates for transplant rejection. In addition, Maxygen has an option to co-promote any autoimmune therapeutic products developed under this alliance in North America. Regardless of indication, Astellas will manufacture the finished product using active drug substance provided by Maxygen and market and sell such product globally.

As consideration, Maxygen will receive a $10 million initial payment and is eligible to receive up to an additional $160 million in pre-launch milestone payments. Maxygen is also eligible to receive tiered double-digit royalties on all sales. If Maxygen exercises its option to co-promote, revenues from any such therapeutic product will be subject to a profit-sharing arrangement between the parties instead of royalty payment.

In addition to the $10 million up-front payment, Astellas will pay for the first $10 million of certain preclinical costs related to development of MAXY-4 candidates, after which the companies will share preclinical and development costs of MAXY-4 candidates for autoimmune disease indications in North America and European countries. Astellas will be responsible for development costs for autoimmune disease indications in the rest of the world and for transplant rejection indication worldwide.

“We are pleased to initiate a great partnership with Maxygen,” stated Hirofumi Onosaka, Astellas’s senior corporate executive. “I believe that Maxygen has a very strong suite of technologies to develop improved versions of protein drugs. Astellas is committed to solidifying immunology as one of our prioritized therapeutic areas, and this partnership should become a driving force to enhance our leadership position in the transplantation franchise. Moreover, it will further provide additional treatment options for physicians and autoimmune disease patients and is expected to improve their quality of life.”

“Our MolecularBreeding™ platform has yielded promising candidates for the treatment of autoimmune disease and transplant rejection,” said Russell Howard, chief executive officer of Maxygen. “Astellas is an excellent partner to help us develop and commercialize this program. Their experience with immunology therapeutics, particularly their development expertise in the field of transplantation and successful commercialization of Prograf®, will complement our expertise in protein pharmaceutical discovery and development.”

About MAXY-4

MAXY-4 is Maxygen’s preclinical program to create next-generation CTLA4-Ig therapeutics with improved potency. By binding to human B7 ligands with high avidity, CTLA4-Ig fusion proteins inhibit B7-mediated co-stimulation of T cells via the CD28 receptor, thereby decreasing activation of T cells and thus decreasing immune system activation. Maxygen used its MolecularBreedingTM directed evolution platform to generate a library of novel CTLA4 proteins with significantly higher specific binding to human B7 ligands.

About MolecularBreeding™ Directed Evolution Platform

Maxygen’s MolecularBreeding™ directed evolution platform uses a process of gene shuffling in a test tube to create libraries of recombinant genes containing varying levels of genetic diversity. The protein products from these recombined genes are then screened for the targeted drug properties. Genes that encode the selected proteins can then be reshuffled and screened in an iterative process that ultimately results in the identification of proteins with the desired product profiles. This novel platform allows scientists to exploit naturally occurring genetic variation, which can result in the discovery of novel therapeutic protein candidates.

About Maxygen

Maxygen is a biopharmaceutical company focused on developing improved versions of protein drugs. The company’s lead program, MAXY-G34, is designed to be an improved long-acting G-CSF for the treatment of neutropenia. MAXY-G34 is currently in Phase II clinical trials. Maxygen also has a MAXY-4 program, under which it is exploring new CTLA4-Ig product candidates for the treatment of a broad array of autoimmune disorders and transplantation rejection. Maxygen uses its proprietary DNA shuffling technology and extensive protein modification expertise to pursue the creation of biosuperior proteins. www.maxygen.com

About Astellas

Astellas Pharma Inc., located in Tokyo, Japan, is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. Astellas has approximately 13,700 employees worldwide. The organization is committed to becoming a global category leader by rapidly establishing a business model in Urology, Immunology and Inflammatory, Diabetes, CNS/Pain, Infectious diseases (virus) and Cancer. We have discovered an over-active bladder (OAB) medication, Vesicare® and an immunosuppressive agent, Prograf® (tacrolimus), which have enabled us to become an established leader in both Urology and Transplant. For more information on Astellas Pharma Inc., please visit our website at www.astellas.com.‹

[DewDiligence]

MAXY Puts Maxy-G34 on Hold and Lays Off 30% of Workforce

[The company’s story is that Maxy-G34 (a knockoff of AMGN’s Neulasta) has compelling clinical data but scaling up manufacturing to support phase-3 will cost too much money without a partner. This doesn’t entirely ring true, IMO, because MAXY has about $200M of cash and no debt. The Maxy-G34 data will be disclosed at the Rodman& Renshaw conference in early November. Meanwhile, MAXY has engaged Lazard to recommend a “strategic alternative.”]

http://biz.yahoo.com/bw/081022/20081022006184.html

›Maxygen Announces Plans to Reduce Spending and Revise Corporate Strategy

Wednesday October 22, 4:01 pm ET

Phase III Manufacturing for MAXY-G34 Delayed Until Partner Is Identified

Reduction in Headcount Planned for First Quarter 2009

Lazard Retained to Explore Strategic Options

Conference Call Today at 4:30 p.m. ET

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Maxygen, Inc. (Nasdaq: MAXY ), a biotechnology company focused on the development of optimized protein drugs, today announced plans to reduce its spending on MAXY-G34 while seeking a partnership for the program. MAXY-G34 is the company’s next-generation long-acting G-CSF for the treatment of chemotherapy-induced neutropenia. Maxygen also plans to reduce headcount during the first quarter of 2009. The company has retained the investment bank Lazard to assist in exploring strategic options, including a sale or disposition of one or more corporate assets, a strategic business combination, or other transactions.

Maxygen will reduce spending on MAXY-G34 by delaying Phase III manufacturing until it identifies a partner who can share manufacturing costs. The Phase III manufacturing costs were anticipated to begin in September 2008, and delay of this expenditure is expected to have a material impact on the MAXY-G34 project timeline. In addition, Maxygen does not plan to take MAXY-G34 into Phase IIb trials without funding from a substantial collaborative partner. The company’s original schedule called for the Phase IIb trial to begin in the second half of 2009.

A Phase IIa trial of MAXY-G34 in breast cancer patients is currently being completed. The drug has been shown in Phase IIa to be safe, efficacious and lacking immunogenicity at all doses tested; however additional trials will be required to establish differentiation from existing therapeutics. Maxygen plans to present detailed audited results of the Phase IIa trial before the end of 2008.

“Although the preliminary Phase IIa data are encouraging, we do not believe it practical for Maxygen to take the MAXY-G34 program forward without a partner,” said Russell Howard, chief executive officer of Maxygen. “The uncertainty of partnering, the cash required for continuation of the program, and the current financial environment have together led us to the difficult decision to significantly reduce spending.”

As a consequence of decreasing investment in MAXY-G34, and in order to preserve cash, Maxygen is also announcing the termination of approximately 30% of its workforce, with staggered terminations from January 1 through the end of April 2009. Positions will be terminated in operations and G&A. In order to facilitate employee transition to new opportunities, Maxygen will be providing outplacement support and a severance package for each affected employee.

Maxygen will retain approximately 65 employees, with a primary focus on the company’s MAXY-4 program with Astellas Pharma, Inc. The company plans to continue minimal activities on MAXY-G34, and a small team will continue protein drug discovery for autoimmune disease therapies using Maxygen’s MolecularBreeding™ platform.

“We regret the loss of our valuable colleagues who have built Maxygen over the past few years,” said Dr. Howard. “We wish them well as they seek new opportunities to use their energy and skills elsewhere.”

Including the savings from cost reductions on MAXY-G34, Maxygen will end 2008 with approximately $200 million in cash, with no debt. The company is projecting operating cash utilization of approximately $17 million for 2009, not including restructuring charges, which are projected to be approximately $2.0 million. Operating cash utilization is a non-GAAP financial measure that is defined as net loss excluding stock compensation and depreciation less capital expenditures and change in deferred revenues.

Dr. Howard concluded, “Maxygen assets include year-end cash of approximately $200 million, a 25% ownership stake in Codexis, a licensing agreement with Codexis for biofuels and other applications of the MolecularBreeding™ platform, the MAXY-4 partnership with Astellas in autoimmune disease and transplant rejection, the MAXY-G34 program, a vaccine discovery program funded by grants, a widely cited intellectual property estate, and a technology platform to generate novel protein drugs for autoimmune disease. We are well positioned to work with Lazard to maximize shareholder value.”

Conference Call

Management will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss these announcements. Participants in the U.S. can access the call by dialing 800.435.1261 and using the passcode 71527206. International participants can dial 617.614.4076 and use the same passcode. A live webcast of the conference call will be available on the Maxygen web site at www.maxygen.com/webcasts.

Telephone and webcast replays of the conference call will be available until November 22, 2008. To access the telephone replay, dial 888.286.8010 (U.S.) or 617.801.6888 (international) and use the passcode 59335961. To access the webcast archive, go to www.maxygen.com/webcasts.

About MAXY-G34

MAXY-G34 is a novel, long-acting granulocyte colony stimulating factor (G-CSF) designed to treat chemotherapy-induced neutropenia. MAXY-G34 is currently in Phase II clinical trials. Preclinical and Phase I studies show MAXY-G34 to have novel and potentially superior properties compared to the current G-CSF therapy, Neulasta®. G-CSF is a natural protein that stimulates the body’s bone marrow to produce neutrophils, a specific type of white blood cell that plays an important role in the defense against bacterial infections. Worldwide sales of G-CSF products were approximately $5 billion in 2007.

About Maxygen

Maxygen is a biopharmaceutical company focused on developing optimized versions of protein drugs. The company’s portfolio includes a MAXY-4 program, partnered with Astellas Pharma, Inc., under which the company and Astellas are exploring new CTLA4-Ig product candidates for the treatment of a broad array of autoimmune disorders and transplantation rejection. Maxygen also has MAXY-G34, designed to be an improved long-acting G-CSF for the treatment of neutropenia. MAXY-G34 is currently in Phase II clinical trials. Maxygen uses its proprietary DNA shuffling technology and extensive protein modification expertise to pursue the creation of biosuperior proteins. www.maxygen.com‹


<font size=3><font color=red> “The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”

[DewDiligence]

MAXY Offloads Essentially All Operations to JV With Astellas

[This is a highly unorthodox deal. First of all, MAXY’s management team is resigning effective immediately. Astellas is getting an option to acquire MAXY’s share of the new JV during the next three years at prices ranging from $53M to $123M. MAXY’s residual stake in the previously licensed MAXY-G34 (a Neulasta knockoff) and MAXY-Seven (a Novo-Seven knockoff) programs are excluded from the JV, as is $200M of cash on hand. CC today (Wednesday) at 4:30 pm ET.]

http://finance.yahoo.com/news/Maxygen-Announces-Joint-bw-3346218354.html

›Maxygen Announces Joint Venture with Astellas to Develop Protein Pharmaceuticals

-Maxygen to Contribute R&D Operations and Assets to Newly-Formed Joint Venture-

-Astellas to be Granted 3-Year Option to Acquire Joint Venture-

-Maxygen Plans Strategic Restructuring of Remaining Operations-

-Maxygen to Host Conference Call on July 1, 2009 at 4:30 p.m. ET (1:30 p.m. PT)-

Tuesday June 30, 2009, 7:00 pm EDT

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Maxygen, Inc. (Nasdaq:MAXY) today announced that Astellas Pharma Inc. and Maxygen have executed an agreement to establish a joint venture focused on the discovery, research and development of multiple protein pharmaceutical programs, including Maxygen’s MAXY-4 program and other early stage programs. As part of the arrangement, Maxygen will provide Astellas with an option to acquire all of Maxygen’s ownership interest in the joint venture within three years after establishment of the joint venture. The joint venture arrangement represents a significant expansion of the existing collaboration agreement between the parties for the development and commercialization of MAXY-4 program candidates for autoimmune diseases and transplant rejection.

The Joint Venture

Pursuant to the joint venture agreement, Maxygen will contribute substantially all of its programs and technology assets in protein pharmaceuticals, including its existing MAXY-4 collaboration agreement with Astellas, together with $10 million in cash, to a newly-formed joint venture in which Maxygen will have an ownership interest of approximately 83%. Astellas also will invest $10 million in the joint venture in exchange for the remaining ownership interest in the joint venture of approximately 17%. Astellas will be granted an option to acquire all of Maxygen’s ownership interest in the joint venture at specified exercise prices that will increase each quarter from $53 million to $123 million over the three-year term of the option. Grant Yonehiro, Maxygen’s Chief Business Officer, is expected to serve as chief executive officer of the joint venture.

As part of the joint venture arrangement, the joint venture and Astellas will also enter into a collaboration agreement under which Astellas will fund substantially all of the costs, estimated at up to $30 million over the three-year option term and subject to certain limitations, related to the discovery, research and development by the joint venture of multiple protein therapeutics (other than MAXY-4). Astellas will be granted an option to obtain a license to one product developed by the joint venture under this collaboration arrangement, subject to certain conditions and exercisable only if Astellas does not exercise its buy-out option during the option term. Development costs for the MAXY-4 program will be shared by Astellas and the joint venture in accordance with the existing terms of the MAXY-4 collaboration agreement.

The transactions will also include a grant by Maxygen to the joint venture of certain licenses to use its MolecularBreeding™ technology platform and ancillary protein expression technologies, subject to certain existing licenses and other limitations.

In the event Astellas does not exercise its buy-out option prior to expiration of the three-year option term, all rights to the protein therapeutics developed through the joint venture (with the exception of any product for which Astellas has exercised its license option) will be retained by the joint venture, and Astellas will be required to provide up to 18 months of transition funding to the joint venture in the form of revolving loans of up to $20 million on pre-agreed terms if the MAXY-4 collaboration agreement between the joint venture and Astellas remains in force.

The boards of directors of Astellas and Maxygen, respectively, have approved the terms of the joint venture arrangement. The consummation of this transaction is subject to customary closing conditions, including approval by Maxygen’s stockholders. The parties expect the transaction to close late in the third quarter or early in the fourth quarter of 2009.

Maxygen Strategic Reorganization

“Today’s announcement largely completes a multi-year strategic process to position Maxygen’s programs and assets in collaborations and other arrangements that are primarily supported by external parties,” said Isaac Stein, the Executive Chairman of the Board of Directors of Maxygen. “Going forward, Maxygen’s focus will be to manage these arrangements to maximize the return to our stockholders over the next few years.”

In addition to its majority ownership of the joint venture, Maxygen will continue to retain a number of significant assets, including:

• approximately $200 million in cash;

• its MAXY-G34 program (including the previously announced licensing arrangement with Cangene Corporation for Acute Radiation Syndrome);

• a 22% ownership interest in Codexis, Inc. and a revenue stream from Maxygen’s biofuels license to Codexis;

• a potential $30 million milestone payment from Bayer HealthCare LLC [this relates to MAXY-Seven];

• its MolecularBreeding™ platform [is this worth anything?] and intellectual property portfolio (including certain additional fields of application of the technology platform not yet licensed); and

• a fully funded vaccine discovery program.

As a result of this transaction, substantially all of Maxygen’s research and development operations and personnel will be transferred to the new joint venture. “We intend to restructure and downsize Maxygen’s corporate and administrative staff and expenses to best align the company’s operations with its future business needs,” said Mr. Stein. “As a part of this process and following an appropriate transition period after the closing of the joint venture transaction, we also expect Maxygen’s current senior management team – Russell Howard, Larry Briscoe and Elliot Goldstein – will be leaving the company. On behalf of the company, I would like to thank each of them for their extraordinary efforts in the development of Maxygen’s programs and to wish them the best of success in their future endeavors.”

Conference Call

We will host a conference call tomorrow, July 1, 2009, at 4:30 p.m. ET (1:30 p.m. PT) to discuss this transaction. Participants in the U.S. can access the call by dialing 800.901.5217 and using the passcode 53785247. International participants can dial 617.786.2964 and use the same passcode. A live webcast of the conference call will be available on the Maxygen web site at www.maxygen.com/webcasts.

Telephone and webcast replays of the conference call will be available until July 30, 2009. To access the telephone replay, dial 888.286.8010 (U.S.) or 617.801.6888 (international) and use the passcode 43903995. To access the webcast archive, go to www.maxygen.com/webcasts.‹