Maxygen Inc. Reports Operating Results (10-K)
Maxygen Inc. has a market cap of $122.1 million; its shares were traded at around $4.07 with and P/S ratio of 3.4.
Highlight of Business Operations: We operate substantially all of our research and development operations through Perseid Therapeutics LLC, or Perseid, a majority-owned subsidiary established in September 2009 in connection with a joint venture arrangement with Astellas Pharma, Inc., or Astellas, which currently holds a minority investment in Perseid. Perseid is focused on the discovery, research and development of multiple protein pharmaceutical programs, including CTLA-4 Ig product candidates (designated as our MAXY-4 program) that are designed to be superior, next-generation CTLA-4 Ig therapeutics for the treatment of a broad array of autoimmune disorders, including rheumatoid arthritis, and transplant rejection. Under the joint venture arrangement, Astellas has an option to acquire all of our ownership interest in Perseid at specified exercise prices that increase each quarter from the current option price of $76.0 million (through March 18, 2011) to $123.0 million over the term of the option, which expires on September 18, 2012.
In addition to our majority ownership of Perseid, we have retained all rights to our MAXY-G34 product candidate, which is designed to be an improved, next-generation pegylated, granulocyte colony stimulating factor, or G-CSF, for the treatment of chemotherapy-induced neutropenia. We also held approximately $128.0 million in cash, cash equivalents and marketable securities as of December 31, 2010 (including $25.7 million held by Perseid as of such date) and remain eligible for a milestone payment of up to $30.0 million from Bayer HealthCare LLC, or Bayer, related to the sale of our hematology assets to Bayer in July 2008.
The consummation of the joint venture transaction with Astellas in September 2009 largely completed a multi-year strategic process to position our programs and assets in collaborations and other arrangements that are primarily supported by external parties. Since then, we have focused, and continue to focus, on managing these assets and arrangements to maximize the return to our stockholders. We completed a number of transactions in 2010 in furtherance of this strategy. In January 2010, we consummated a transaction with AltraVax, Inc., or AltraVax, a newly formed, privately-held biopharmaceutical company, for the sale of substantially all of our vaccine related assets, including the related government grants. In October 2010, we sold substantially all of the patents and other intellectual property rights associated with our Molecular Breeding directed evolution platform to Codexis, Inc., or Codexis, and cancelled all payment and potential royalty obligations of Codexis to us relating to biofuels and other energy products, for $20.0 million. In December 2010, we distributed substantially all of the shares of Codexis common stock we held, together with approximately $29.2 million in cash, to our stockholders by way of pro rata special distributions. In addition, since December 2009, we have repurchased approximately 10.0 million shares of our common stock at an aggregate cost of approximately $54.1 million.
Perseid began operations on September 18, 2009, in connection with the consummation of the joint venture transaction between us and Astellas pursuant to which we contributed substantially all of our protein pharmaceutical programs and related assets, together with $10.0 million in cash, to Perseid. Astellas also invested $10.0 million in Perseid. As part of the joint venture arrangement, Astellas has been granted an option to acquire all of our ownership interest in Perseid at specified exercise prices that increase each quarter from the current option price of $76.0 million (through March 18, 2011) to $123.0 million over the term of the option, which expires on September 18, 2012 (the third anniversary of the closing).
We initially received an upfront fee of $10.0 million under the agreement and Perseid remains eligible to receive future milestone payments. During 2010, Perseid received two $5.0 million payments from Astellas for the achievement of preclinical milestones under this agreement and, in February 2011, Perseid received a $10.0 million payment from Astellas for the initiation of the Phase I trial discussed above. Except for products and related countries for which Perseid has exercised its co-promotion rights, Perseid is eligible to receive base tiered
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