Praecis stops efforts to license prostate drug Plenaxis

By Elaine Rigoli

Tampa, Fla., June 20 - Praecis Pharmaceuticals Inc. said it will stop seeking a buyer for its Plenaxis prostate cancer drug assets.

As previously disclosed, the company said it will work with the Food and Drug Administration to discontinue the limited distribution of the product in the United States as soon as reasonably practicable and will not pursue further the commercialization of Plenaxis outside the United States.

The company will also discontinue any remaining Plenaxis-related activities, except as necessary to support the wind-down of product distribution in the United States, according to a news release.

During this wind-down, the company said it will continue to evaluate potential opportunities for these assets to the extent such opportunities arise.

The company currently estimates that it will record a non-cash impairment charge of $3.6 million in the second quarter of 2006 related to the remaining value of capitalized Plenaxis inventory and equipment.

The company will also record an additional charge in the second quarter of $3.9 million related to the present value of its remaining commitments under certain of its Plenaxis manufacturing and supply agreements.

The $3.9 million charge represents the net present value of about $5 million of the total future cash commitments.

Praecis expects to expense the balance of $1.1 million over the remaining term of the applicable manufacturing and supply agreements, which period ranges from one to four years.

The company has about $9.3 million in outstanding cash obligations under third-party agreements, which are due in varying annual amounts through 2010.

Praecis is a biopharmaceutical company based in Waltham, Mass.

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