Perseid Achieves Preclinical Milestone Under Collaboration with Astellas for CTLA-4 Program

Perseid Achieves Preclinical Milestone Under Collaboration with Astellas for CTLA-4 Program
News source: Business Wire

Maxygen, Inc. (Nasdaq:MAXY), a biotechnology company focused on the development of improved protein drugs, today announced that its majority-owned subsidiary, Perseid Therapeutics LLC, achieved a preclinical milestone under its collaboration with Astellas Pharma Inc. to co-develop and commercialize next-generation CTLA4-Ig therapeutics. Perseid has received a $5 million payment from Astellas for achievement of this milestone.

"This milestone represents important progress in our next-generation CTLA-4 program," said Grant Yonehiro, CEO of Perseid. "It exemplifies the outstanding work that has been accomplished by the Perseid-Astellas team. We are pleased to have such a strong collaboration with such an exceptional global partner."

About Perseid

Perseid, a majority owned subsidiary of Maxygen, is focused on the discovery, research and development of multiple protein pharmaceutical programs, including its CTLA4-Ig program. Perseid began operations on September 18, 2009 in connection with the consummation of a joint venture transaction between Maxygen and Astellas. Under the joint venture arrangement, Maxygen contributed $10 million of cash and substantially all of its programs and technology assets in protein pharmaceuticals (excluding its MAXY-G34 program) to Perseid in exchange for an 83.3% ownership interest in Perseid. Astellas also invested $10 million of cash in Perseid and holds the remaining 16.7% ownership interest. Astellas also has been granted an option to acquire all of Maxygen's ownership interest in Perseid at specified exercise prices that increase each quarter from $53 million to $123 million over the term of the option, which expires on September 18, 2012.

About Perseid's CTLA4-Ig Program

Perseid's CTLA4-Ig product candidates (designated as MAXY-4) are designed to be superior, next-generation CTLA4-Ig therapeutics for the treatment of a broad array of autoimmune disorders, including rheumatoid arthritis and transplant rejection. By binding to human B7 ligands with high avidity, CTLA4-Ig fusion proteins inhibit B7-mediated co-stimulation of T cells via the CD28 receptor, thereby decreasing activation of T cells and thus decreasing immune system activation.

The co-development and commercialization agreement between Perseid and Astellas was originally entered into by Maxygen and Astellas in September 2008 and assigned to Perseid in September 2009 in connection with Maxygen's joint venture arrangement with Astellas. Under the co-development and commercialization agreement, Perseid and Astellas are co-developing CTLA4-Ig candidates for rheumatoid arthritis and other autoimmune diseases and Astellas is exclusively developing CTLA4-Ig candidates for transplant rejection. Perseid has an option to co-promote any autoimmune therapeutic products developed under this alliance in North America. Regardless of indication, Astellas will manufacture the finished product using active drug substance provided by Perseid and market and sell such product globally. Under the agreement, Perseid remains eligible for additional milestone payments and is also eligible to receive tiered double-digit royalties on all sales. If Perseid exercises its option to co-promote, revenues from any such therapeutic product will be subject to a profit-sharing arrangement between the parties instead of royalty payments. The companies share preclinical and development costs for autoimmune disease indications in North America and European countries, while Astellas is solely responsible for development costs for autoimmune disease indications in the rest of the world and for transplant rejection indication worldwide.

About Maxygen

Maxygen is a biopharmaceutical company focused on developing improved versions of protein drugs through both internal development and external collaborations and other arrangements. Maxygen uses its proprietary DNA shuffling technology and extensive protein modification expertise to pursue the creation of biosuperior proteins. For more information, please visit www.maxygen.com.

Cautionary Statement Regarding Maxygen Forward-Looking Statements

This document contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of Maxygen's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this document include statements about Perseid, the joint venture arrangement and other agreements with Astellas and about Perseid's CTLA4-Ig program, including Perseid's plans or the plans of Astellas to commence or continue the development of any of the CTLA4-Ig product candidates for any indication and the timing and status of any such development; whether Perseid or Astellas will achieve any further development milestones under the agreement and whether Perseid will receive any future milestone payments from Astellas related to such development; the potential utility of the CTLA4-Ig product candidates for the treatment of any autoimmune disorders or transplantation rejection; the potential potency or advantages of such products over existing or future products; and whether Astellas will exercise its buy-out option even if Perseid is successful. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which Maxygen expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks inherent in drug development, such as potential difficulties or delays in the development, testing, regulatory approvals, progression or production of drug compounds, the failure to develop products suitable for commercialization, the delay or suspension of predicted development and commercial timelines for any potential products, the failure to protect intellectual property portfolio and rights; and the risk that any compounds developed may have adverse side effects or inadequate therapeutic efficacy, and other economic, business, competitive, and/or regulatory factors affecting business of Maxygen, Perseid and/or Astellas and the markets each serves generally, including those set forth in Maxygen's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and its Current Reports on Form 8-K and other SEC filings. Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

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