Human Genome to spin off CoGenesys division

By Angela McDaniels

Seattle, Dec. 13 - Human Genome Sciences Inc. said it has decided to spin off its CoGenesys division as an independent company that will focus on the early development of selected gene-based products.

The decision is contingent on a successful completion of funding for CoGenesys by no later than May 31, 2006.

"We believe that the decision ... will enable Human Genome Sciences to realize value from certain intellectual property assets and early-stage product opportunities, while maintaining our primary focus on the commercialization of our later-stage products in clinical development," Human Genome president and chief executive officer H. Thomas Watkins said in a company news release.

Human Genome said the move will give CoGenesys the increased independence it requires to secure funding from outside sources.

Under the agreement, Human Genome will provide CoGenesys with a start-up loan of $10 million, to be repaid either in cash or equity at the option of Human Genome following completion of CoGenesys' funding.

CoGenesys will also assume responsibility for its facility and equipment leases, producing a combined reduction in Human Genome's anticipated operating costs of more than $35 million over the next three years.

Human Genome will grant CoGenesys exclusive rights to develop and commercialize biological products based on selected human genes discovered by Human Genome and will grant CoGenesys a license to use its proprietary albumin-fusion technology to develop and commercialize albumin-fusion proteins for therapeutic use, the company said.

Human Genome will have the right to retain an equity investment in CoGenesys and will receive an upfront payment for the assets, intellectual property and technology licensed to CoGenesys.

Human Genome is also entitled to a portion of the revenue CoGenesys receives from outlicensing or sales of therapeutic and diagnostic products successfully developed and commercialized.

Human Genome retains the right of first refusal prior to outlicensing by CoGenesys of several specific products that may be developed under the agreement.

In addition, Human Genome has the option to have CoGenesys continue to perform pre-Investigational New Drug application development work for up to two Human Genome products per year, with reimbursement for expenses on a cost-plus basis. CoGenesys will be entitled to milestone payments as any resulting products advance through development, the company said.

Craig A. Rosen will join CoGenesys as executive chairman and chief scientific officer and has resigned his current posts as president, chief scientific officer and a director of Human Genome Sciences effective Dec. 31.

Steven C. Mayer will join CoGenesys as chief executive officer and has resigned as executive vice president and chief financial officer of Human Genome effective Dec. 31.

Human Genome said its primary focus will be the commercialization of its compounds in later-stage development, but it will continue to have a strong internal research capability. The company will also continue to conduct preclinical work on early-stage candidates internally if it is decided to shift efforts to that purpose.

Human Genome Sciences is based in Rockville, Md., where it develop drugs that serve patients with unmet medical needs, with a primary focus on protein and antibody drugs.

CoGenesys was created as a division of Human Genome Sciences in the first quarter of 2005. The division is outfitted with laboratories and manufacturing suites suitable to the production of materials required for preclinical and phase 1 clinical research.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.