Posted by TAP Genta Sees Aventis Paying $390 Million R&D,Marketing Costs Over 5 Yrs By: Beth M. Mantz, Of DOW JONES NEWSWIRESNEW YORK -(Dow Jones)- Genta Inc.'s (GNTA) and Aventis SA's (AVE) joint development and marketing partnership could be worth $870 million, if not more, executives said on a conference call Monday.The deal, announced Monday, is one of the largest between the more established, large pharmaceutical industry and the younger biotechnology sector for the right to sell an individual drug. Aventis will pay up to $480 million in cash, equity, milestones and convertible debt to Genta for the right to develop and market Genta's lead drug Genasense, a cancer treatment.Genta will receive a total of $135 million in initial and near-term payments, including $10 million cash as a licensing fee and $40 million cash as development fees, $10 million in convertible debt, and $75 million pursuant to an equity investment upon achievement of a near-term clinical milestone. Genta also gets an additional $280 million in cash, and $65 million in convertible notes, pursuant to achievement of clinical and regulatory milestones. All of these milestone payments are nonreturnable.As part of the deal, Aventis will fund 75% of all development costs relating to current new drug applications in the U.S. and pay all other development, marketing and sales costs. Such spending would support clinical trials that could lead to regulatory approval as well as studies and efforts that could support premarketing and marketing activities.On a conference call with analysts Monday, Genta Chairman and Chief Executive Raymond Warrell estimated that such spending paid out by the French-German drug maker over five years would approximate about $390 million in costs that it would have had to handle itself.Thomas Hofstaetter, Aventis' senior vice president of corporate development insisted that $390 million-figure is an estimate."It may be less (than $390 million) or it may be way more, depending on how many indications," said Hofstaetter. "The investment that is necessary to get there could be $390 million, or $100 million, or $500 million...We will spend what is necessary to exploit the potential."Shares of Genta recently traded at $14.20, up $2.48, or 21%, on composite volume of 5.3 million shares, compared with average daily volume of 1.3 million shares.American depositary receipts of Aventis recently traded at $68.94, down 61 cents, on composite volume of 246,200 receipts, compared with average daily volume of 224,873 receipts.$390 million in costs that it would have had to handle itself.
on 4/29/2002, 10:12 am
April 29, 12:26 pm Eastern Time
Thomas Hofstaetter, Aventis' senior vice president of corporate development insisted that $390 million-figure is an estimate.
"It may be less (than $390 million) or it may be way more, depending on how many indications," said Hofstaetter. "The investment that is necessary to get there could be $390 million, or $100 million, or $500 million...We will spend what is necessary to exploit the potential."
Shares of Genta recently traded at $14.20, up $2.48, or 21%, on composite volume of 5.3 million shares, compared with average daily volume of 1.3 million shares.
American depositary receipts of Aventis recently traded at $68.94, down 61 cents, on composite volume of 246,200 receipts, compared with average daily volume of 224,873 receipts. out by the French-German drug maker over five years would approximate about
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