Progenics on the hunt for partner by year-end 2005

By Ronda Fears

Nashville, July 14 - Partnering is an ever-increasing prong in the future of start-up biotechs with drug candidates reaching points where commercialization is nearing reality and Progenics Pharmaceuticals Inc. is on the hunt.

"We have a stated goal to have a partnership signed this year," before we file a New Drug Application at the end of 2004 or in early 2006, said Progenics chief executive Dr. Paul Maddon. "Having a partnership would help [with commercialization] tremendously, especially outside the U.S."

The process of negotiating a partnership will be galvanized, Maddon said, by clinical trial data compiled so far and ongoing trials.

"It takes two to tango," Maddon said. "Until the ink is dry, there is nothing to talk about."

Merrill Lynch & Co. analyst David Munno was optimistic about Progenics' prospects both in terms of its lead drug candidate and luring a global partnership. Merrill initiated coverage of Progenics on Thursday at a buy rating with a price target of $28 per share.

Progenics shares Thursday added 2 cents, or 0.09%, to $21.96

Tarrytown, N.Y.-based Progenics engages in the development and commercialization of therapeutic products to treat debilitating conditions and life-threatening diseases with products for the areas of symptom management and supportive care, and the treatment of HIV infection and cancers.

Progenics expects to report data from its second phase III trial of its lead candidate methylnatrexone, used to induce bowel movements in post-operative advanced medical illness, in the third quarter and file a new drug application by year-end or early 2006. This could lead to a drug launch in 2007.

"Treament of opioid-related side effects is a large, untapped market. We believe both oral and injectable MNTX [methylnatrexone] formulations will make MNTX the preferred drug in its class versus Adolor's Entereg due to ease of use in the hospital and post-surgical setting," Munno said in his report.

"We expect Progenics to partner with a large global pharmaceutical company by year end to market MNTX, likely with a large, upfront cash payment."

Still, Merrill does not expect Progenics to be profitable until 2009. "Progenics may need to raise up to $180 million to reach profitability, a large portion coming from potential partnership payments."

Maddon said that Progenics raised $60 million in shelf drawdowns in April and June, and followed with a new shelf filing for $70 million in stock sales in late June but there are no immediate plans to take that down.

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