Wednesday, February 18, 2009

CuraGen ponders a possible sale

By Marc Songini

Branford, Conn.-based CuraGen Corp. reports it is evaluating “strategic initiatives” to make more money for its shareholders, including possibly selling the company.

CuraGen (Nasdaq: CRGN) said its board of directors would be evaluating what to do with its drug CRO11, a fully human monoclonal antibody. The company’s board believes CuraGen’s management is making “exciting progress” as CR011 moves through its Phase 2 clinical trials. Additionally, the board believes it has taken necessary actions during the past two years to ensure the company is well capitalized. 

With that, the board feels it should consider “strategic alternatives that could enhance shareholder value.” This includes selling or licensing CR011, acquiring additional assets or business lines, or even putting the company on the auction block. To that end, CuraGen plans to retain an investment bank to assist the board with a strategic review. However, during the evaluation process, the management will remain focused on executing the “current business plan.”

CuraGen has also retained a consultant to identify potential acquirers of CR011. During  an ongoing multi-center study in heavily pretreated breast cancer patients, CR011 is well tolerated with early evidence of activity, claimed the company. The Phase 2 program in melanoma also shows promising activity. Given the potential to move CR011 into a more advanced development program for both patients with breast cancer and patients with melanoma, it seems opportune to “seek strategic interest in the marketplace.”

CuraGen ended 2008 with $88 million in cash and investments on hand, and over $500 million in net operating loss carry forwards, the company stated. The company expects to end the second quarter of 2009 with between $76 and $77 million in cash and investments.