Shares of MediGene AG (MDG), an unprofitable German developer of cancer medicines, fell the most in two months after it said it agreed to buy Avidex Ltd., a closely held U.K. biotechnology company.
Shares of MediGene fell 40 cents, or 6.4 percent, to 5.89 euros in Frankfurt today.
MediGene, based in Martinsried, Germany, is trading 8.2 million of its shares worth 50 million euros ($64.3 million) for Avidex to gain drugs for cancer and autoimmune diseases, including RhuDex, an experimental treatment for rheumatoid arthritis.
``Rheumatoid arthritis is an interesting but highly contested market,'' Markus Metzger, an analyst at Vontobel Securities in Cologne, said in a telephone interview today. ``And MediGene is getting into it quite late.''
Arthritis drugs on the market include Bristol-Myers Squibb Co. (BMY)'s Orencia and Roche Holding AG (ROG)'s Rituxan. Unlike competitors, RhuDex would be given orally. RhuDex is expected to soon enter phase II tests, the second of three trials generally required for regulatory approval.
MediGene forecast revenue of between 20 million euros and 25 million euros for fiscal 2006. The company widened its forecast for a loss before interest and taxes for this year to about 20 million euros.
Earlier this month, MediGene reiterated a forecast for a full-year loss of as much as 15 million euros after U.S. regulators extended a review of its ointment to treat genital warts. The medicine will probably be approved in 2007 rather than this year, delaying a previously forecast break even, MediGene said June 30.
Advent Venture Partners owns a majority of Oxford, England-based Avidex.