MacroGenics Buys Drug Developer to Bolster Cancer Work

The orphaned Raven has found a parent.

MacroGenics, a Rockville biotech, announced yesterday that it bought cancer drug developer Raven Biotechnologies of South San Francisco, Calif.

Until last March, it looked like another biotech firm would be adopting Raven. VaxGen, also of South San Francisco, had announced plans to merge with Raven, but opposition from VaxGen stockholders led the companies to ditch the deal.

The failed VaxGen merger was a disappointment, said Raven founder Jennie Mather, but, she added, "Scientifically this is just a much, much better fit."

Neither Raven nor MacroGenics have had products reach market, but MacroGenics chief executive Scott Koenig said the acquisition will allow both companies to speed that process. "The acquisition has opened up new vistas for new treatments," Koenig said. "It really will help very rapidly accelerate the cancer treatments we've worked on."

MacroGenics develops injections that aim to stop the progression of a range of diseases. It has teamed with Eli Lilly for clinical trials of an antigen that it hopes will slow the progress of Type 1 diabetes.

Raven has focused more selectively on growing cancer stem cells to develop antibodies against the disease.

Raven's 31 employees will join MacroGenics, which has 104 employees, and will continue to work out of Raven's South San Francisco offices. Raven is MacroGenics's second acquisition; in 2002 it acquired Eliance, a vaccine development start-up, but abandoned its work two years later.

MacroGenics started courting Raven after the two chief executives met in San Francisco last April to discuss their technologies.

"We both looked at each other and said, 'This seems like a great opportunity to put two complementary groups together to make one great company,' " Koenig said.

Raven chief executive George Schreiner left the company as part of the acquisition.

VaxGen is still looking for a new partner, chief executive James Panek said.

Failing to merge with Raven was yet another setback for the beleaguered anthrax vaccine developer. The company lost its $877 million government contract for a next-generation vaccine in 2006. After its stockholders made clear they would block a merger with Raven, the company sold the vaccine program to Rockville-based rival Emergent BioSolutions for a fraction of its development costs. The company has since laid off three-quarters of its 22 employees, and its stock, trading at more than $17 at the beginning of 2005, closed yesterday at $0.68.