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Decision on Hollis-Eden’s Anti-Radiation Drug Expected March 7

Hollis-Eden Pharmaceuticals Inc. stock should be interesting to watch this week, as the company expects a March 7 decision from the federal government about Neumune, its anti-radiation drug.

But the company has grown accustomed, though not complacent, with waiting: The local biotech expected a similar decision in October 2005, and then again in June and September.

Even so, the U.S. Department of Health and Human Services is expected to announce whether it will select Neumune as a therapy for acute radiation syndrome , the likely result of a nuclear attack.

The project was sponsored by Project BioShield, a post-9/11 government program that allocated $5.6 billion to stockpile drugs for emergency situations , even if not Food and Drug Administration-approved.

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The sluggish allocation of BioShield funds was documented in a “60 Minutes” TV show report last year that featured Hollis-Eden. Interviews with officials overseeing the federal program said disorganization and apathy were partly to blame for the delays in approving projects.

Hollis-Eden says it spent millions of dollars developing Neumune after the government promised to buy 75 million doses. In October 2005, however, officials said they wanted only 100,000 doses, and Hollis’ stock promptly fell 40 percent.

In the event of exposure after a nuclear weapon explosion, Neumune could be used to boost the immune system by stimulating creation of white blood cells that help the body respond to bacteria, and platelets, or blood clotting elements, company research shows.

When given to primates who were lethally radiated, Neumune increased their rates of survival, company tests show. The data will be published in the April issue of International Immunopharmacology.

Hollis Eden stock, traded as HEPH on the Nasdaq, closed down 5 cents at $5.46 on Feb. 26, the day of the announced scientific journal publication.

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Avinza Numbs Ligand Pain:

Ligand Pharmaceuticals Inc. has completed its $246 million sale of Avinza, an FDA-approved painkiller, to Tennessee-based King Pharmaceuticals.

Money from the sale and royalties will be used to pay shareholders and support Ligand’s research, said Chief Executive Officer John Higgins in a Feb. 26 press statement.

In addition to the purchase amount of $246 million, King will pay Ligand a 15 percent royalty during the first 20 months after the close of the sale. After that, royalty payments will drop 5 percent to 10 percent, based on sales.

Higgins said the sale “represents a major step in the transformation of Ligand into a highly focused (research and development) driven pharmaceutical company.”

Ligand focuses on therapies for thrombocytopenia or lack of blood platelets, cancer, hormone-related diseases, osteoporosis and inflammatory diseases.

In June, the company settled a lawsuit alleging violations of securities laws for $12.2 million. Ligand’s then-CEO, David Robinson, resigned, and Higgins replaced him.

Ligand stock, which trades as LGND on the Nasdaq, closed up 3 cents at $11.76 on Feb. 26.

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Cytori Raises Money:

Cytori Therapeutics Inc. was expected to close a $21.5 million stock offering last week.

The company will use the money, raised through the sale of 3.75 million shares of common stock, to hold clinical trials for the Celution System, which separates stem cells from fat tissue for use in medical procedures, such as reconstructive surgery.

Cytori will also use the proceeds to develop and commercialize the system, and for general working capital.

The transaction was expected to close Feb. 28.

Cytori stock closed at $5.44, down nearly 7 percent, the day of the announced offering, Feb. 26.

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Trius Raises Money, CEO:

Trius Therapeutics Inc. completed a $20 million, series A financing round Feb. 26, and promoted its chairman, Jeffrey Stein, to the position of CEO.

The former CEO, John Finn, who co-founded Trius, will now serve as chief scientific officer.

The local bio-pharmaceutical company develops antibacterial drugs, including targeting drug resistant bacteria. Sofinnova Ventures led the financing round, joined by InterWest partners, Prism VentureWorks and Versant Ventures.

Trius will use the money to advance its compounds through early-stage human clinical trials.


Contact Katie Weeks with biotechnology news at

kweeks@sdbj.com

, or call her at (858) 277-6359, ext. 3107.

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