ERX - A thread for everyone

Prospects

EiRx has refocused on in-house drug development because we believe experience
shows discovery-stage research services and drug target licensing opportunities
have been poorly valued within our industry in recent years. In contrast, one
of the most striking trends in the biotech industry in the last two years has
been the remarkable increase in the valuations placed on late preclinical /
early clinical stage deals to license or co-develop innovative drug candidates.
Research analyst firm Wood MacKenzie calculates that the value of preclinical
product deals in the '05/'06 financial year is up 180% on the previous year(*),
due to competition between Pharmaceutical majors to enlarge their product
pipelines in preparation for the expiry of patents protecting many of today's
bestselling drugs. EiRx's main discovery effort aims to identify novel cancer
kinase inhibitors, and several recent third-party licensing deals indicate the
impressive valuations being placed on such products at the late preclinical
stage. These include Rigel's licensing of the aurora kinase inhibitor R763 to
Serono (total potential value of $160M, with $25M upfront), CGI's licensing of
the multi-kinase inhibitor CGI1842 to Genentech (total potential value of $500M,
with $25M upfront), Plexxikon's licensing of the PLX4032 inhibitor of mutant
B-Raf kinase to Roche (total potential value $660M, with $40M upfront) and
Piramed's licensing of its PI3-kinase inhibitor programme to Genentech (total
potential value of $230M).