Procter & Gamble Picks Genta for Biotech Investment
Genta, a 2-year-old company developing so-called “antisense” drugs, is the first biotechnology company to receive an equity and research investment from Procter & Gamble, the $27-billion consumer goods conglomerate that is making a new push into pharmaceutical products.
The terms of P&G;’s investment in the San Diego company were not disclosed because it is “competitively sensitive,” a Genta spokeswoman said, but sources said the agreement is large and involves both an equity investment in Genta and financing for research and development of unspecified drugs.
Genta, which was founded in 1989, is recognized as one of three or four leaders in the new area of biotechnology called antisense oligonucleotides, a therapeutic approach that stops disease-carrying proteins at the genetic level. The cornerstone of Genta’s technology is a patent received in 1986 by two Johns Hopkins University medical researchers.
In August, Genta applied for permission from the federal Food and Drug Administration to begin testing its first drug, a treatment for chronic myelogenous leukemia, a form of cancer that kills 85% of its victims. If the FDA approves, clinical tests of Genta’s drug could begin at the M.D. Anderson Cancer Center in Houston within two to three months.
The Genta agreement is the first of what may become a series of investments by Cincinnati-based Procter & Gamble in biotech companies, said Steven Burrill, national director of high-technology industry services for Ernst & Young, an accounting and consulting firm in San Francisco. Procter & Gamble said last year that it intended to become a major player in the pharmaceuticals industry.
P&G; will soon break ground on a $280-million, 253-acre health care research center near Cincinnati that will eventually employ 1,000 people. Some of the product research in the Genta agreement will be conducted at the new center, Genta spokeswoman Teri O. Glover said Wednesday.
Procter & Gamble is best known for consumer goods such as Tide laundry detergent, Ivory soap, Pampers disposable diapers and Head & Shoulders shampoo. But 9% of the company’s $27 billion in worldwide revenues last year came from health products, including Vicks cough medicine, Pepto-Bismol and Nyquil cold medicine.
The company also sells prescription drugs through its Norwich Eaton Pharmaceuticals subsidiary. Those products include Macrodantin, a market leader for treating urinary tract infections; Entex: a leading prescription drug for coughs and colds, and Didronel, a treatment for bone disorders.
The Procter & Gamble investment is the first outside corporate investment in Genta, a closely held company. Genta, which was spun off from San Diego-based Gen-Probe after Gen-Probe was acquired by Chugai Pharmaceutical of Japan in 1989, has so far raised $17 million in venture capital.
