Targeted Genetics to Investigate SEC Litigation Related to Offering
Targeted Genetics this week said it is examining the facts surrounding US Securities and Exchange Commission litigation against a manager at hedge fund advisor Crestview Capital Partners in connection with Targeted Genetics’ February 2004 registered direct offering.
According to the SEC, it had charged Crestview and the manager, Stewart Flink, with “making fraudulent representations in connection with investments by Crestview-managed funds in two registered direct offerings,” one of which was Targeted Genetics’.
“Registered direct offerings generally are characterized as privately negotiated sales of securities by public companies pursuant to an effective shelf registration statement,” the SEC said. “Crestview and Flink made false representations in the offering documentation for the two registered direct offerings that Crestview funds had not shorted the respective issuer's stock in the ten trading days preceding the signing of the documentation.”
The agency said that Crestview and Flink agreed to a civil injunction for violations of the federal securities laws.
Crestview also agreed to pay $394,640 in disgorgement and civil penalties and to retain an independent consultant to monitor Crestview's compliance procedures, while Flink agreed to pay $120,000 in civil penalties.
Neither Crestview nor Flink admitted or denied the charges.
"The allegations against Crestview and Mr. Fink are a matter of grave concern for us," Stewart Parker, president and chief executive officer of Targeted Genetics, said in a statement. "We plan to examine all the related facts and circumstances to determine the appropriate course of action."
New Law Aims to Reduce Financial Risk of Developing Biothreat Tools for US Gov't
A little-known bill enacted into law at the end of last year could be a boon to biotech companies, including those using genomic technologies, developing diagnostics for pathogens and other biosecurity-related products and services.
The Pandemic and All-Hazards Preparedness Act creates a new way for the federal government to contract out its biosecurity programs for biothreat responses, among other provisions.
It aims to reduce some of the risks faced by companies developing bio-threat technologies for the federal government.
Specifically, it will try to cover R&D costs for companies developing biothreat tools as NIH funding runs out but before Project BioShield kicks in, which can take between three and five years.
“The government is finally getting it,” David Persing, a vice president at Cepheid, told GenomeWeb News. “They’re finally understanding what companies need and how companies work.”
The Pandemic Act creates a new scaffold of powers, called the Biomedical Advanced Research and Development Authority, through which federal agencies are given more freedom to offer companies enticements to develop biothreat responses.
BARDA, which is slated to receive a $1.07 billion funding budget for fiscal years 2006-2008, will be used to supplement Project BioShield, which includes the Departments of Homeland Security, Agriculture, Energy, Health and Human Services, and the National Science Foundation, among other organizations.
HHS spokesman Bill Hall said there are inherent and novel risks to developing biothreat products, and BARDA “will help some of these companies … get through that valley.”
Hall said all drug- and disease-related research is risky, but biothreat programs are doubly so. “There is a tremendous amount of money spent on biotech on cancer,” Hall explained, “but there have been many dead ends. The same is true for biotech or biosecurity. But [in biosecurity] you’re dealing with issues [such as terrorist attacks] which may not come to fruition.
“And there is not a built-in delivery system in place,” Hall continued. “For a cancer drug, there is a delivery system: hospitals, doctors, etcetera. …”
Hill stressed that because the project is new, it is not yet clear where its funding will come from, how it will be overseen, or how it will be implemented.
Some in industry welcome the new bureaucracy. “What it says to me is that the government is finally getting it,” said David Persing, a vice president at Cepheid, which makes diagnostic tests for influenza, including a portable test designed to identify flu viruses within 24 hours. “They’re finally understanding what companies need and how companies work.”
As a contractor making a diagnostic for avian flu, for example, Persing said Cepheid might be likely to shy away from a restrictive contract.
“If [the government] had come up with a proposal and restricted it to avian flu, we’d say, ‘Well, why do we want to do that? We don’t even know if we’re ever even going to need” the tests. “Nobody is excited about that kind of business model. Everybody gets discouraged and interest starts to wane.”
Researchers Cleared to Join RXi’s SAB by Academic Institutions
CytRx this week said that the scientific advisors of its newly formed RNAi drug subsidiary RXi Pharmaceuticals have received approval from their respective institutions to serve on the company’s scientific advisory board.
CytRx established RXi earlier this year after having told RNAi News about its plan to do so as early as late 2005 (see RNAi News, 1/11/2007).
At the time, the company said four scientists had agreed to join RXi’s SAB including Craig Mello, who recently won the Nobel Prize for his co-discovery of RNAi (see RNAi News, 10/5/2006) and who currently sits on CytRx’s SAB; Greg Hannon, an RNAi researcher at Cold Spring Harbor Laboratory; Tariq Rana, a researcher at the University of Massachusetts Medical School and CytRx SAB member; and Michael Czech, also a UMMS researcher and CytRx SAB member.
CytRx said the advisors now have clearance to join the SAB and will do so pending RXi’s completion of an undisclosed funding milestone.
Bio-Rad Q4 Revenues Rise on Strong Life Science, Clinical Dx Performance
Bio-Rad Laboratories last week said fourth-quarter revenues increased 12 percent as R&D spending rose 20 percent and profit increased 24 percent.
Total revenues for the three months ended Dec. 31, 2006, increased to $343 million from $307 million year over year.
Revenue from the company’s Life Science division rose 13 percent to $159 million, while receipts from the Clinical Diagnostics segment increased 11 percent to $180 million.
Bio-Rad said Life Science sales were “boosted by a number of factors including significant growth in protein expression analysis, process chromatography, and amplification reagents,” and by the acquisition of Ciphergen Biosystems’ tools business last year.
Clinical Diagnostics sales were up over the entire segment, but “most notably” from blood virus products and quality-control products.
R&D spending increased to $37.4 million from $31.1 million year over year.
The company said third-quarter profit increased to $16.6 million from $13.5 million in the year-ago period.
Bio-Rad said it had around $488 million in cash, cash equivalents, and short-term investments as of Dec. 31.