Ebb & Flow

In just six years, Cougar Biotechnology Inc. (NASDAQ:CGRB) has managed to turn a Phase I prostate cancer candidate, a reverse merger and $138 million into a $1 billion acquisition by Johnson & Johnson (NYSE:JNJ). The pharma made a tender offer of $43 per share after market close last Thursday, a 16% premium to the close that day.

Cougar's lead compound, abiraterone acetate, is in two Phase III trials to treat metastatic, castration-resistant prostate cancer. One study is in patients who have progressed after docetaxel-based chemotherapy has failed; the other is in patients who have yet to receive chemotherapy. The compound inhibits steroidal enzyme 17alpha-hydroxylase/C17,20 lyase (CYP17).

In its 1Q09 filing, Cougar said it hoped for FDA approval of abiraterone between 2010 and 2012.

Cougar received exclusive worldwide rights to CB7630 from BTG plc (LSE:BGC) in 2004. It paid an initial license fee of $923,100 and agreed to an annual fee of about $300,000 to maintain the license in addition to clinical and regulatory milestones, according to an SEC filing. Last year, Cougar paid BTG $3.5 million, including a milestone triggered by the start of a Phase III trial.

In 2006, Cougar reverse merged with public shell company SRKP 4 and did its first publicly disclosed financing, a $47.5 million private placement led by Adage Capital. Other investors included Brookside Capital; T. Rowe Price; Merlin BioMed Group; RA Capital Management; and Tavistock Life Sciences.

Many of these investors continue to be the largest disclosed shareholders and include Adage (9.85% at March 31); Wellington Management (9.68% at Dec. 31, 2008); T. Rowe (8.98% at March 31); and Brookside (3.58% at March 31).

"It was clear the company was going to be sold," said Kurt von Emster of venBio. "It was not a shock it was acquired, just a little surprising it was J&J since there were

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