Three Local Firms Placed on Prestigious
Russell 3000 Index
Another promising San Diego-based biotechnology firm has changed hands.
Aurora Biosciences Corp. is being acquired by Cambridge, Mass.-based Vertex Pharmaceuticals, Inc. Shareholders of both companies approved the stock deal valued at $538 million July 18.
Vertex will pay 62 cents of its stock, or about $23.91 for each Aurora share.
Aurora will remain in San Diego as a wholly owned subsidiary of Vertex and continue to sell technologies to biotech firms and drugmakers, said Aurora spokesman Doug Farrell on July 12.
The combined unit will have 925 employees, he said. About 350 employees will remain at the San Diego facility.
“Immediately, nothing will change,” said Vertex chairman and CEO Joshua Boger, referring to the Aurora unit.
“We are very excited about Aurora’s existing business and look forward to growing that site,” Boger said.
When asked about future layoffs, Boger said, business will be managed on a quarterly basis.
The Wall Street Journal reported May 1 that Vertex anticipates to post $180 million in revenues in 2001.
However, Boger said last week he couldn’t confirm the estimate because of new Securities and Exchange Commission regulations.
Last year, Aurora had $63.8 million in revenues at $4.4 million in net income after taxes.
Boger described the unit as “complimentary” with very little “overlap.”
“But the potential for synergy is high,” he added.
Vertex designs small-molecule drugs targeting a variety of diseases, including cancer, arthritis, and autoimmune and neurological disorders.
The acqusition of Aurora gives Vertex the tools to speed up the process.
A forerunner in the ultra-high throughput screening world, Aurora boasts an impressive list of clients, including Merck & Co., Inc.; GlaxoSmithKline plc. and Allergan, Inc.
On July 11, Aurora, then still independent, entered into another potentially lucrative deal with Sunnyvale-based Hyseq Inc.
The two biotech firms signed a two-year research collaboration to mine potential drug targets.
Under the agreement, Hyseq will supply Aurora with unexplored protein targets.
Aurora will screen Hyseq’s protein targets against its own library of drug compounds to see if they interact.
They hope this tedious process will lead to a good fit and eventually lead to a drug.
Hyseq said it will make an undisclosed upfront payment and pay Aurora milestones based on progress.
Aurora and Hyseq each will retain rights on any products coming out of their pipelines, an Aurora spokeswoman said. Financial details were not disclosed.
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Moving Up:
Three local biotech firms recently had their stocks listed on the prestigious Russell 3000 Index.
They are Applied Molecular Evolution, Inc. (Nasdaq: AMEV), La Jolla Pharmaceutical Co. (Nasdaq: LJPC) and Avanir Pharmaceuticals (Amex: AVN).
John McCamant, editor of the Medical Technology Stock Letter, applauds the firms’ additions to the Russell 3000 Index.
“That means they have grown in market capitalization,” he said.
On July 12, Avanir had a market cap of $315.6 million; Applied Molecular Evolution had a market cap of $319.7 million; La Jolla Pharmaceutical had a market cap of $286.5 million.
McCamant said this is positive for the firms in the short-term, because fund managers will want to add these firms into their portfolios.
The Russell 3000 Index, published by Frank Russell Co. of Tacoma, Wash., measures the performance of the 3,000 largest United States companies based on market capitalization.
Stocks in the index have a market cap range of about $170 million to $200 billion, with an average of $2.8 billion.
Please send biotech news to Webb by fax at (858) 571-3628 or by e-mail to mwebb@ sdbj.com.
