Subject: Merck Accord Pushes Down Repligen Shares Date: Published: 10/24/91 (85 lines) Source: Wall Street Journal. Copyright Dow Jones & Co. Inc. Technology: Merck Accord Pushes Down Repligen Shares ---- By David Stipp Staff Reporter of The Wall Street Journal Merck & Co. agreed to develop drugs to prevent AIDS with MedImmune Inc., boosting the stock of MedImmune and pushing down the stock of Repligen Corp., another biotechnology concern that has been working with Merck on AIDS preventatives. The move by Merck was interpreted by some investors as a sign that the giant drug company believes that certain of MedImmune's potential AIDS preventatives show more promise than Repligen's similar experimental drugs. It also followed a sharp rise in Repligen shares, triggered by a positive research report last week, which prompted some analysts yesterday to downgrade their investment ratings on Repligen's stock because its price had exceeded their targets. "The combination of everything happening at once" caused Repligen's stock to fall precipitously, said Teena Lerner, a Shearson Lehman Brothers analyst. "It looks like an overreaction." In over-the-counter trading yesterday, Repligen closed at $20.25, down $8.75, and MedImmune closed at $47, up $11.875. Merck shares were quoted at $132.375, up $1.875, in late trading on the New York Stock Exchange. Merck said it agreed in principle with MedImmune, which is based in Gaithersburg, Md., to collaborate in developing MedImmune's monoclonal antibodies for preventing infection by the virus that causes acquired immune deficiency syndrome. Repligen said Tuesday that it plans to buy back from Merck the rights to its similar research, citing a difference of opinion with Merck on how to proceed in developing products based on the work. Monoclonal antibodies are versions of naturally occurring immune molecules that, when tailored to target a portion of the AIDS virus, have shown promise in blocking infection by the virus. Merck will pay MedImmune about $13 million for development work on such antibodies over the next three years, beginning in the fourth quarter. MedImmune will retain rights to co-promote with Merck products resulting from the program. A Merck spokesman said that MedImmune has developed some 40 monoclonal antibodies of potential use in fighting AIDS, including one that appears particularly promising. He declined to comment on Repligen's monoclonal antibody research but said, "Our action with respect to MedImmune speaks for itself." Merck said it continues a collaboration with Repligen to develop AIDS vaccines based on a technology different from monoclonal antibodies. The company also is collaborating with MedImmune on AIDS vaccine development, a MedImmune spokesman said. Last week, Repligen announced it had conducted two chimpanzee studies with Merck that indicated it may be feasible to use monoclonal antibodies to protect against AIDS infections in humans. Repligen said that reacquiring rights to the antibodies will allow it "to aggressively pursue development of our lead therapeutic monoclonal antibody product." Ramesh Ratan, Repligen's chief financial officer, added that Repligen wants to develop its monoclonal antibodies partly as treatments for people already infected with the AIDS virus. Merck didn't want to pursue that strategy, he added. Shearson's Ms. Lerner said Repligen's decision to buy back rights to its monoclonal antibody research may turn out to work in the company's favor. She noted that at least two small biotechnology concerns, Immunex Corp. and Synergen Inc., have benefited by reacquiring rights to products they had previously licensed to large drug companies. "Younger companies often want to aggressively move forward {in developing products}, and larger companies have a different agenda," she added. [This article is made available here by Dow Jones Co. for the personal and non-commercial use of callers to this bbs, in the hope that it will be of some help to those who are suffering from the disease and others who are seeking to help them.]