Biotech Notebook: Idec, Celtrix, Liposome, BioTime and Human Genome

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First

Idec

(IDPH)

blindsides and irks investors by announcing a secondary offering last week. Then it has a battery of conference calls this week to talk about its launch -- with partner

Genenetech

(GNE) - Get Report

-- of the non-Hodgkin's lymphoma drug

Rituxan

. Then, the company pulls its offering Wednesday night, a week after announcing it, citing "market conditions." (That means, "Our stock has pretty much stunk since we told people about this.")

What's going on here?

The launch is going strongly, but some short-sellers believe a sales slowdown is coming in March and that's why Idec pulled the deal. Pshaw, say the company and its investors. Idec says "pent-up demand" from cancer patients who knew about the drug since last year has been satisfied and now the "normal adoption curve" will unfold. Rituxan had sales of $13.2 million in January and $11.1 million in February, according to the company. Of course, February is a shorter month, don't forget.

"It's a very robust launch. We've exceeded our expectations and Genentech's expectations," says Bill Rastetter, chairman, chief executive and president. "Seventy percent of patients have reordered. That's a fantastic number."

Analyst Tony Butler of

Lehman

, which is not an Idec banker, says, "It's a risk to assume that March sales are falling off a cliff. It almost can't be less than February. It's possible but not probable." He rates the biotech an outperform.

In April and May, abstracts on studies to be presented at the

American Society of Cancer Research

will emerge that will further highlight Rituxan's effectiveness and spur sales, fans expect.

Butler says 10% to 15% of Rituxan use is "off-label" in patients with a more intense form of the disease. Off-label describes use of a drug in diseases for which it is not approved.

Floating a Trial Walloon

Celtrix

(CTRX)

expects results in its

SomatoKine

hormone in a 24-patient trial in people with hip fractures in the next couple of weeks, according to Don Huffman, chief financial officer.

The trial, being conducted in Belgium, is a "feasibility" Phase IIA study looking at whether the drug can build bone and improve strength and mobility in elderly patients. SomatoKine, which combines insulin-like growth factor 1 (IGF-1) and its binding protein 3 (BP-3), is administered subcutaneously and worn around the waist in a belt. In the trial, the drug was administered for eight weeks and then patients are to be monitored for 24 weeks. When the company releases the results later this month, it won't have complete information on all 24 patients, but it will give an indication of the direction of the trial, says Huffman.

Note to biotech investors: Rare is it for a development-stage company to declare an early-stage trial unsuccessful. They save those kind of announcements for the big, expensive Phase III studies. In the early stages, a company is often able to find some tiny Lincoln log with which to start building a late-stage trial protocol. Although this truth is universally acknowledged, stocks of biotechs often rise after they say they've had successful Phase II trial results.

Tip of the LIPO

The word from industry and market sources is that

Liposome

(LIPO)

was shopped around to prospective acquirers, who passed on the embattled biotech. One top health-care banker at a major investment bank says that LIPO was informally shopped, but he says, "I don't believe a book has been sent out. If it had, you'd hear about it."

Brooks Boveroux, the company's spokesman, would not comment one way or the other. But he did say, "We are out looking to license product and you can get rumors like that." Boveroux says

Hambrecht & Quist

and

UBS

are the company's current investment bankers.

No Longer BioTime

As of Wednesday, clients at

Gilford Securities

can no longer trade

BioTime

(BTIM)

on margin. The biotech's stock was placed on the restricted list, according to a broker at the firm. Broker Ernie Caponegro is said to have placed between 2% and 5% of BioTime's 9.9 million outstanding shares in the hot little hands of Gilford clients. An action like this is taken to protect the firm, which has to lend money for margin accounts. Compliance officer Chris Dunckley says, "Any restrictions the firm may have would not be public information."

Denatured

A wounded Bill Haseltine takes British scientific journal

Nature

to task in the latest issue's letters column. The chief executive of

Human Genome Sciences

(HGSI)

objects to an article boldly headlined, "Curtain falls on gene sequencing deal," which quoted a

SmithKline Beecham

(

(SBH) - Get Report

SBH ADR) official saying that the drug company has "exhaustively milked the database" of its partner. The article talked about how SBH is chafing at the terms of the agreement with HGSI and that the genomics company's prominence has been diminished recently. Haseltine writes the article was "misleading and incorrectly attributed." Also writing in support is David U'Pritchard, chairman of research and development at SBH.