PRAECIS SETTLES WITH AMGEN.
THOUSAND OAKS - Praecis Pharmaceuticals will pay Amgen Inc. $13 million in settlement fees to finalize the drawn-out development of a prostate cancer drug.
Last fall, Amgen Inc. dropped agreements with Waltham, Mass.-based Praecis to clamp down on business ventures that have stalled. The Food and Drug Administration previously rejected Praecis' application to market Plenaxis, a prostate cancer drug that was developed in conjunction with Amgen.
``The $13 million is a small amount of money for Amgen and probably a more reasonable amount for Praecis,'' said Stefan Loren, analyst with Legg Mason in Baltimore. ``But really, this is like the end of a divorce, and both parties never benefit.''
In a similar vein, Thousand Oaks-based Amgen ended a licensing agreement with Baltimore-based Guilford pharmaceuticals in September. The second phase of clinical trials with Gilford's Parkinson's disease drug were not fruitful, Amgen officials said last fall.
Analysts say the termination of the Praecis and Guillord deals is Amgen's ``way of cleaning house.''
``And I don't think Amgen's losing any sleep over this,'' said Fariba Ghodsian, analyst with Roth Capital Partners LLC in Los Angeles. ``Disappointing FDA data led to Amgen's decision. They are moving on now.''
But for Praecis - a company that posted a net loss of $14.2 million in the second quarter 2002, versus a loss of $13 million in the same period a year ago - Plenaxis is not a lost cause.
The company continues to make developments on the drug. Bill Heiden, president and chief operating officer of Praecis, said the company expects approval of Plenaxis by the middle of next year.
``And we're still open to work with a partner,'' he said. ``This recent settlement is the culmination of a long, drawn-out discussion with Amgen. The payment is really the final act.''
Praecis shares rose 8 cents, or 2.42 percent, to close at $3.38, while Amgen advanced $1.03, or 2.2 percent, to close at $47.70 Wednesday.