Assistant

Privately held CoGenesys Inc., a 2006 spinout of Human Genome Sciences Inc., is being acquired by potential collaborator Teva Pharmaceutical Industries Ltd. in a $400 million cash deal.

CoGenesys, of Rockville, Md., had been in discussions with several prospective partners, Teva among them, and was considering a possible Series B financing, when Teva's offer came in.

For its part, Teva, of Jerusalem, best known for its long established generics business, had been angling for a position in the biopharmaceuticals and biogenerics market.

Those "two paths came together," said Steven Mayer, CoGenesys' founder and CEO. He called the deal a "perfect strategic fit," and said Teva's "vision and needs fit very nicely with ours."

Both boards already have approved the transaction, which is expected to close in the first half of this year, giving Teva access to CoGenesys' platform technologies, including its Albumin Fusion technology, which uses human serum albumin to create long-acting drugs, and its portfolio of protein drugs, the first of which are in early clinical development.

Neugranin, a long-acting form of granulocyte-colony stimulating factor, is in Phase II testing in Europe in breast cancer patients, and Cardeva, a recombinant protein to B-type natriuretic peptide, is in a Phase I/II trial in heart failure. Earlier in the pipeline, CoGenesys has a human growth hormone product that has completed Phase I and two preclinical programs - a long-acting beta-interferon for multiple sclerosis and an antibody against a new tumor necrosis factor (TNF) family for autoimmune diseases such as Crohn's - that are nearing investigational new drug application status.

Teva has not yet announced specific plans for developing those compounds, though Mayer said he believes G-CSF drug Neugranin "likely will be a high priority."

The pharma firm also might show an early interest in the preclinical beta-interferon program to complement its existing MS franchise that includes Copaxone (glatiramer acetate), which recorded global sales of $1.4 billion in 2006.

A Teva spokesperson told BioWorld Today via e-mail that the firm sees this acquisition as part of its "long-term growth opportunity" and helps position it in the "emerging biogenerics market," while establishing Teva "as a leading player in the development of innovative biotherapeutics."

According to Teva, once the acquisition is complete, CoGenesys will operate as Teva Biopharmaceuticals USA.

Full details of CoGenesys' planned integration into Teva have not yet been disclosed, but the firm's Rockville, Md. facility will remain, along with its 80 employees. That was a "major part of the deal," said Craig Rosen, the firm's co-founder, chairman and chief scientific officer.

"You often see some smaller companies" get swallowed by big pharma firms that are interested in only one program, Rosen told BioWorld Today. "But, here, Teva is looking at the basket of products, including our platform technology and experience."

That experience includes the HGS team that developed the Albumin Fusion technology, as well as Rosen and Mayer, both of whom are former HGS executives. Rosen was a founding scientist at Rockville-based HGS and served as president and chief scientific officer, while Mayer was executive vice president and chief financial officer.

CoGenesys originally was created in 2005 as a division of HGS to focus specifically on early development of gene-based products. A year later, the firm gained its independence with a $55 million Series A round led by New Enterprise Associates, of Menlo Park, Calif., with investments by New York-based Orbimed Advisors and Baltimore-based Red Abbey Venture Partners. Parent company HGS also participated in the round, retaining a 13 percent stake in CoGenesys. (See BioWorld Today, Dec. 15, 2005, and June 12, 2006.)

Shares of HGS (NASDAQ:HGSI) closed at $10.02 Tuesday, down 45 cents.