Biopharmaceutical companies kill merger

Cytogen has canceled plans to acquire Advanced Magnetics and instead has signed a marketing and sales agreement for the rights to two Advanced Magnetics products.

Advanced Magnetics of Cambridge, MA, will give Cytogen of Princeton, NJ, the U.S. rights to Combidex, an MRI agent used for detection of lymph node metastases, and to Code 7228, Advanced Magnetics’ next-generation imaging agent.

In exchange, Advanced Magnetics received 1.5 million shares of Cytogen stock and will receive another half-million shares in milestone payments. Cytogen will pay Advanced Magnetics a royalty based on the products’ sales, when they are approved by the FDA.

Cytogen shares were basically unchanged the day after the new deal was announced (Aug. 28), falling 9¢ to $8.94. But Advanced Magnetics’ stock lost $2.44 to close at $5.13 a share.

Advanced Magnetics is halfway to an NDA approval for its MR contrast agent, Combidex. The FDA in July sent the company a letter saying that although it found Combidex approvable for its principal indication, as a lymph node imaging agent, it could not approve the agent for its secondary indication, imaging of the liver and spleen (SCAN 7/5/00).

Jerome Goldstein, chairman and CEO of Advanced Magnetics, said that Combidex is the first lymph-node-specific MR contrast agent to be filed with the FDA.

The firm submitted its new drug application for Combidex to the FDA in December 1999. Advanced Magnetics’ European marketing partner, Guerbet, submitted the European equivalent of an NDA to the European Medicines Evaluations Agency at the same time.

The company has incurred financial losses while waiting for approval to market this product.

Cytogen currently markets two imaging agents: ProstaScint for prostate cancer and OncoScint CR/O for colorectal and ovarian cancers.