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Biotech—IBM lends high-tech support to local biotech

Analysts have long predicted a marriage between high-technology and biotechnology firms. In recent weeks, the wedding bells have been ringing.

IBM Life Sciences of Armonk, N.Y., announced Nov. 29 it made an equity investment in Rancho Bernardo-based Structural Bioinformatics, Inc., which develops protein structures for pharmaceutical and biotechnology firms.

Details of the financial agreement were not disclosed.

Edward T. Maggio, chairman, president and CEO of SBI, however, said he is excited about the long-term implications of the deal.

He said the IBM investment puts SBI in a “strong financial position,” offering the private firm an “opportunistic” view towards the IPO market.

IBM said it will provide SBI with computerized tools to develop protein structures faster and cheaper.

SBI offers databases of complex protein structures over the Internet to subscribing scientists at pharmaceutical and biotech firms worldwide. The company also sells chemistry that could lead to drugs.

IBM’s technology will allow SBI to calculate and track the changing shapes of protein molecules faster than before.

This is vital information for companies. To develop one drug costs up to $500 million and can take up to 15 years, said Dr. Caroline Kovac, vice president of IBM Life Sciences.

Experts foresee proteomics, the study of proteins, will become big business now that the Human Genome Project has been successfully completed.

According to health care consultant Frost & Sullivan in San Jose, the worldwide proteomics market could rise to $5.8 billion in 2005 from $700 million last year.

SBI raised $32 million in a private placement in March. Major investors included New York City-based venture capital group Perseus Soros, Denver-based mutual funds manager Invesco and a German pension fund.

SBI’s clients for chemistry include DuPont Pharmaceuticals in Wilmington, Del. Yamanouchi Pharmaceuticals in Tokyo, Japan, and BiochemPharma in Montreal.

“We are continuing to grow,” Maggio said.

On Dec. 5, SBI bought Moldyn, Inc., the San Diego-based unit of the Cambridge, Mass.-based defense company Photon Research Associates Inc. for an undisclosed amount.

Maggio said Moldyn offers SBI advanced bioinformatics data mining tools, a talented pool of engineers, mathematicians and physicians, and proximity to the marketplace on the East Coast.

Moldyn will operate as a wholly-owned unit of SBI, he said. He anticipates no layoffs.

Maggio said he’s pleased that James Myer, president and chairman of Photon, joined SBI’s board of directors on Dec. 1.

SBI has a total of 85 employees.

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New CFO: San Diego-based emerging pharmaceutical firm Medinox Inc. appointed David Duncan, Jr. as the firm’s new vice president of finance and CFO.

Duncan was formerly the vice president and CFO of Tanox Inc. in Houston, where he successfully managed a $244 million initial public offering.

Monte Lai, Medinox’s president and CEO, said Duncan’s track record of fund-raising will be instrumental in growing Medinox from an R & D; firm into a pharmaceutical company.

Hopeful Results: Roche, Genentech Inc. and its San Diego-based research partner Idec Pharmaceuticals Corp. announced promising interim results of a late-stage clinical trial of its non-Hodgkin’s lymphoma drug Rituximab.

Results were presented Dec. 3 at the 42nd annual meeting of the American Society of Hematology in San Francisco.

In the study, some 400 previously untreated patients received either chemotherapy alone or chemotherapy combined with Rituximab.

Patients treated with the combination therapy lived longer , their one-year survival rate was 22 percent higher, or 83 percent, vs. patients treated with chemotherapy alone, Genentech said Dec. 4.

Final results will be made public sometime after the fall of 2001, said Genentech spokesman Neil Cohen.

Send biotech news to Webb at mwebb@ sdbj.com.

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