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For some, the new federal health care and insurance reform law may have been little more than campaign fodder in Tuesday's elections. But for dozens of small bioscience companies in Maryland, the legislation meant millions of dollars in research and development grants this week.

The companies — which are working on a range of products, from cancer treatments to stem cells and blood-stopping wound technologies for soldiers — received a total of $48.77 million under the Patient Protection and Affordable Care Act. Only companies with no more than 250 employees were eligible for small slices of the $1 billion pie.

Grants such as this new one "allow us in general to advance our technology and explore applications of it in a manner that doesn't cost our shareholders that capital," said Douglas J. Swirsky, CFO of GenVec. The Gaithersburg company won $244,479 to help fund its cancer treatment program.

"It's a wonderful way to evaluate the technology for applications that we may not be able to do in a capital-constrained environment," Swirsky said.

The timetable from application to notification of receiving grants was "very quick," he said. "We didn't have a lot of notice, but the administrators did a good job."

Among the other recipients was another Gaithersburg biotech, Lentigen.

"As a small company operating in a difficult economic climate, these funds are very timely and will be invested in completion of our [good manufacturing practice] manufacturing facility and the support of several of the therapeutic and vaccine programs submitted for consideration," said Tim Ravenscroft, CEO of Lentigen, in a statement.

The privately held biotech, which received $1.24 million, is developing lentiviral vector technology for therapeutic, vaccine and production applications. Lentiviral vectors are the most efficient vehicles for stably delivering genes or gene-silencing sequences into cells, according to Lentigen information.

Another big winner was Champions Biotechnology, which won $1.46 million. The Baltimore company is developing advanced preclinical platforms and tumor-specific data to improve cancer drugs.

MacroGenics won seven grants totaling $1.71 million, according to federal information. The Rockville company focuses on antibody-based therapeutics for immunological, cancer, respiratory and infectious diseases.

Also winning grants were Neuralstem of Rockville and RegeneRx BioPharmaceuticals of Bethesda, which each received $733,438, according to company statements.

Neuralstem's award comprised three grants.

"This money represents a significant boost ...," CEO Richard Garr said. "It will help us move our first-in-class small molecule treatment for depression into the clinic, and advance our ongoing trial to treat [amyotrophic lateral sclerosis] with our spinal cord stem cells."

RegeneRx, whose award also comprised three grants, said it had applied for the maximum, $5 million.

"This award is extremely valuable to companies like ours as it provides significant non-dilutive capital in furtherance of our clinical development activities, a specific objective of this grant. While we are disappointed that we did not receive the full amount under our application, we understand the broad appeal of this program which led to the significant over-subscription of funds available," CEO J.J. Finkelstein said in a statement.

RegeneRx is developing a novel therapeutic peptide, thymosin beta 4, for tissue and organ protection, repair and regeneration. It is studying its use in treating cardiovascular and central nervous system diseases; as a topical eye drop for ophthalmic indications; and for skin diseases and wounds.

STB Lifesaving Technologies of Rockville won $244,479 to develop its wound dressing designed to reduce blood loss.

Spherix of Bethesda won $469,479 for its program to develop treatments for high triglyceride levels.

"This award will allow us to accelerate the initiation of our triglycerides development program to late 2010 to include in vitro and animal studies leading to appropriate human trials," CEO Claire Kruger said in a statement.

A list of Maryland grant recipients is available at www.irs.gov/businesses/small/article/0,,id=228990,00.html.

In other Maryland bioscience industry news:

Human Genome Sciences was victimized in 2008 by a French physician who tipped inside information about the company's clinical trial for its hepatitis C treatment, federal officials said this week.

The Securities and Exchange Commission charged Yves M. Benhamou, who was consulting on a study of the Rockville biotech's Albuferon, with providing confidential information about adverse results to a portfolio manager for six hedge funds, which consequently saved at least $30 million by dumping 6 million shares of HGS stock.

Benhamou breached his duty of confidentiality to HGS by tipping off the manager six weeks before the company's own announcement, the SEC said.

"Whether it is news about upcoming mergers, operating results, or as in this case clinical drug trials, passing confidential information to others to give them an unfair trading advantage is illegal," said Robert Khuzami, director of the SEC's enforcement division, in a statement. "People entrusted with confidential information, including doctors and researchers, cannot use their positions to help others game the system."

Benhamou was a member of the steering committee overseeing HGS's clinical trial of Albuferon. He learned about two serious adverse events, including one death, which occurred during the trial's third phase, charging documents state. The company later reduced the dosage for patients in that arm and trial and announced the changes.

The unidentified portfolio manager — who was a friend of Benhamou — ordered the sale of 6 million shares of HGS stock, the entire position held by six health care-related hedge funds that he co-managed, prosecutors said. The stock was sold during the six weeks preceding the company's own announcement about the trial on Jan. 23, 2008. That day, the HGS stock price plunged 44 percent.

Benhamou is charged with violating anti-fraud provisions of federal securities laws. The SEC is seeking a permanent injunction, restitution and a fine.

Emergent BioSolutions of Rockville has settled a long-running court battle with a one-time acquisition target, Protein Sciences Corp. of Meriden, Conn., for $11.5 million, according to an Emergent statement.

In connection with the planned acquisition in 2008, Emergent, which develops anthrax and other vaccines and treatments, made a $10 million loan to Protein Sciences, which used its assets as collateral.

When the merger fell through, Emergent sought repayment and eventually sued in New York State Supreme Court, seeking $13 million in damages.

This week, Protein Sciences paid $10 million in principal, plus $1.5 million in accrued interest, to settle all claims, Emergent said.

Emergent also announced this week that the Food and Drug Administration has granted orphan drug designation to its human anthrax monoclonal antibody AVP-21D9, which it is developing to treat inhalation anthrax. Such status is given to candidates for rare medical conditions, those affecting fewer than 200,000 Americans.

The treatment now is in a phase 1 clinical trial with 50 healthy volunteers.

ExonHit Therapeutics of Paris, whose U.S. headquarters are in Gaithersburg, has called off plans to acquire RedPath Integrated Pathology for $22.5 million in cash and stock.

The privately held Pittsburgh diagnostics company's operations were to have been brought under the wing of ExonHit's Gaithersburg office.

Exonhit called off the deal after Highmark Blue Cross Blue Shield of Pennsylvania decided to limit coverage of RedPath's tests to only pancreatic cancer and the companies' efforts to renegotiate terms fell through, according to an Exonhit statement.

PharmAthene reported closing its $15 million public offering.

The Annapolis biodefense company said it sold 4.3 million shares at $3.50 apiece, and plans to use net proceeds of $14.1 million to repay debt and for general corporate purposes.

PharmAthene was among the Maryland companies receiving federal grants under the new health care and insurance reform law, winning about $850,000 in four awards.

The boost in demand for contract manufacturing organizations has driven continuous growth at Paragon Bioservices, which plans to double the size of its facilities at the University of Maryland BioPark in Baltimore.

Paragon Bioservices contracts with bioscience companies to steer development projects from research to phase 1 and 2 clinical trials, including services in good manufacturing practices and cell banking. The company marks its 20th anniversary this month.

The new 45,000-square-foot facility could bring Paragon's work force to 75 from 50 by the third quarter of 2011, said Marco A. Chacón, president and CEO. The expansion will include additional research and process development laboratories and add fill and finish capabilities, according to Paragon information.

"The demand for the services we provide has increased since 2003, and the 2010 forecast is expected to continue increasing by double digits," he said.

Contract manufacturing organizations and contract research organizations are in greater demand because biotech companies are looking more into outsourcing services to keep costs down, Chacón said. At the same time, the pressure for drug discovery continues to increase, despite the attempts of many pharmaceutical companies to consolidate resources, he said. Many smaller biotechs might not have the capabilities or capital for laboratory space, so they function as virtual companies and use surrogate labs.

Paragon also recently won a $5 million contract from the Army Medical Research Institute to develop and produce vaccines against Ebola viruses. This is the company's first federal contract, Chacón said, adding Paragon mostly has focused on the commercial market and will continue to do so. He said CMOs that are specifically targeting commercial companies are few and far between in the area.

"Our success is certainly about a very seasoned team of scientists and engineers and a company that has a very successful history of developing solid relationships with pharmaceutical and biotech companies," Chacón said.

GlycoMimetics of Gaithersburg reported raising $38.98 million in a mixed securities offering aiming for $50 million, according to an SEC filing.

New Enterprise Associates of Chevy Chase led the round.

GlycoMimetics is developing technologies to produce treatments for inflammation, cancer and infectious diseases.

Noxilizer of Baltimore has raised $6.4 million in four rounds of mixed-securities financing with a total target of $9.5 million, according to SEC filings.

Noxilizer develops sterilization systems for hospitals, clinics and other markets.

AstraZeneca of London, parent of MedImmune in Gaithersburg, reported that the Committee for Medicinal Products for Human Use issued a positive opinion on the company's application to market its nasal flu vaccine in the European Union for children ages 2 to 18.

The vaccine, which MedImmune manufactures and markets as FluMist in the U.S., is branded Fluenz in Europe.

The committee's report now goes to the European Commission for a final decision.

"Influenza creates a significant medical and economic burden on Europe and throughout the world, and we are hopeful that the future availability and product characteristics of this novel nasal spray influenza vaccine will reduce the spread of influenza around the globe," said Alex Zukiwski, MedImmune's executive vice president and chief medical officer, in a statement.

The committee reviewed data from 73 global clinical studies and U.S. post-marketing studies of more than 141,000 subjects conducted in 38 countries.

FluMist sales totaled $145 million in 2009, up from $104 million in 2008, according to AstraZeneca's annual report.

Besides its new federal grants, RegeneRx reported other positive news this week: A preclinical study of its dry-eye treatment on animals showed encouraging results.

Animals treated with RGN-259 showed a "dramatic" and statistically significant reduction in corneal staining, the Rockville company said.

"These findings are very compelling because this is a standardized model widely used to advance drugs into human clinical dry eye studies and has been pivotal in determining treatment efficacy in various dry eye development programs," David Crockford, vice president of clinical and regulatory affairs, said in a statement.

On the down side, however, RegeneRx reported receiving a noncompliance notice from the NYSE Amex exchange because its stockholders' equity is less than $6 million. The company plans to request a hearing to seek continued listing pending its return to compliance.

Staff Writer Lindsey Robbins contributed to this report.

rrand@gazette.net