Deja vu all over again

The two public companies that will emerge from NeXstar's proposed spin-off of its drug discovery assets will look quite similar to the two public companies that merged to create NXTR four years ago.

NeXstar was created through the 1994 merger of NeXagen and Vestar. NeXagen brought oligonucleotide drug discovery technology to the table, while Vestar brought AmBisome lipid amphotericin B and DaunoXome lipid daunorubicin (see BioCentury Nov. 4, 1994).

The spin-off will create a product company that will retain the NeXstar name and sell AmBisome to treat systemic fungal infections, and DaunoXome for cancer. The other company will be a drug discovery enterprise - Iterex Technologies - that will hold NXTR's combinatorial chemistry technologies. NXTR, which had $66.3 million in cash as of June 30, will contribute enough cash to the new company for two years of operations.

NXTR said that its board determined that the spin-off is the best way to unlock shareholder value in today's market. "It's not really an unwinding of the merger, it's really the next step

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