On Tuesday, SurModics Inc. (SRDX) announced that it licensed its drug delivery technology to Roche (RHHBY) and its wholly owned subsidiary, Genentech. Drug delivery technologies create and support site specific drug delivery polymers and coating technologies for use in drug/device combination products in chosen markets.    Under the terms of the agreement, SurModics is entitled to an up-front payment of $3.5 million. Furthermore, the deal could be worth up to $200 million in delayed payments if multiple products are successfully developed. SurModics will also receive royalties on product sales. SurModics will receive payments for its development services. Under the terms of the agreement, Roche and Genentech have the right to obtain manufacturing services from SurModics.   The transaction provides Roche and Genentech complete access to the biodegradable microparticles developed by SurModics. They intend to use the products in a long-lasting version of their optical drug Lucentis ...

On early Tuesday morning, SurModics announced their new licensing deal with Roche. SurModics Inc. said that they have licensed their drug delivery technology to Roche and Roche’s Genentech unit for a deal that could be worth around US$ 200 million. The news about the new licensing deal by SurModics gave a great boost to the shares of SurModics and they started climbing in the morning trading itself.  The shares were around $5.97, or 24.6 percent, to $30.24 in the morning trade, but it quickly moved up and halted at $29.04. SurModics shares have normally traded between $15.96 to $30.75 in the previous years.

Roche is based in Switzerland and is one of the world’s biggest drugmakers. However, it has been acquired by a San Francisco biotechnology company called Genentech in 2008.

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SurModics, Inc. announced yesterday that it has signed an exclusive agreement with the Roche Group and Genentech for the licensing of its proprietary drug delivery system. This agreement will also establish a development process whereby a new, sustained-delivery formulation for the highly successful Lucentis® (ranibizumab) injection will be commercialized and brought to market using SurModics’ technology, logistics and expertise.

This incredibly lucrative agreement includes an initial, up-front licensing fee of $3.5 million, and an estimated $200 million in payments if development of the Lucentis formulation and other products is successful. In addition, the agreement indicates that SurModics will be used to develop and manufacture the drug. With the potential to develop other drugs in the future via this agreement, SurModics will also obtain certain undisclosed royalties on sales of developed products.

Lucentis is the only FDA-approved treatment for neovascular (wet) age-related macular degeneration (ARMD), a degenerative condition of the central retina,

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Surmodics Inc.’s (SRDX) MACD indicator has moved into bearish territory with a reading of -0.1394. The Zacks #4 Rank (“Sell") stock has declined more than 2% to $21.60 in afternoon trade. The Zacks Consensus Estimate has reduced by 4 cents over the past month to 81 cents per share for the fiscal year ending Sept 2009."SRDX" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

OVERVIEW

The Biotech industry as a whole continues to underperform the market so far this year. As of May 26, 2009, Both the AMEX Biotech Index and the broader NASDAQ Biotech Index declined 6.8% (AMEX Biotech has 20 biotech companies while NASDAQ Biotech Index includes over 130 component companies), while the Dow Jones Biotech Index declined 3% (which includes 33 companies).

At the same time, both the NASDAQ Composite and S&P 500 have achieved positive returns. NASDAQ has made a gain of 11% as of 5/26/09 and the S&P 500 has gained 0.8%, while the Dow Jones Industrials reached a negative 3.5% return.

This constitutes a sharp contrast with last year when the Biotech industry as a whole achieved much better performance than the market. In 2008, all three biotech indices outperformed all three major market indices by a large margin. The three major indices declined as much as over 40% (34%, 41%

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OVERVIEWThe Biotech industry as a whole continues to underperform the market so far this year. As of May 26, 2009, Both the AMEX Biotech Index and the broader NASDAQ Biotech Index declined 6.8% (AMEX Biotech has 20 biotech companies while NASDAQ Biotech Index includes over 130 component companies), while the Dow Jones Biotech Index declined 3% (which includes 33 companies).At the same time, both the NASDAQ Composite and S&P 500 have achieved positive returns. NASDAQ has made a gain of 11% as of 5/26/09 and the S&P 500 has gained 0.8%, while the Dow Jones Industrials reached a negative 3.5% return.This constitutes a sharp contrast with last year when the Biotech industry as a whole achieved much better performance than the market. In 2008, all three biotech indices outperformed all three major market indices by a large margin. The three major indices declined ...

Last year, the Biotech industry as a whole achieved much better performance than the market. Both the NASDAQ Biotech Index and AMEX Biotech Index outperformed all three major market indices (Dow Jones Industrial Average, NASDAQ Composite and S&P 500) in a large margin. The major indices declined as much as 40%. While NASDAQ Biotech Index declined only 12.6%, and AMEX Biotech Index was down 17.7%.

However, when the recession enters into its third year, the Biotech industry is not doing better than the market, which has been evident by the indices' performances. As of April 9, 2009, AMEX Biotech Index declined 3%, and the broader NASDAQ Biotech Index was down 6.8% (AMEX Biotech has 20 biotech companies while NASDAQ Biotech Index includes over 130 component companies). Although the Dow and S&P 500 also declined a similar percentage, technology-laden NASDAQ actually has a gain of 4.8%, which is more comparable to the

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Last year, the Biotech industry as a whole achieved much better performance than the market. Both the NASDAQ Biotech Index and AMEX Biotech Index outperformed all three major market indices (Dow Jones Industrial Average, NASDAQ Composite and S&P 500) in a large margin. The major indices declined as much as 40%. While NASDAQ Biotech Index declined only 12.6%, and AMEX Biotech Index was down 17.7%.

However, when the recession enters into its third year, the Biotech industry is not doing better than the market, which has been evident by the indices' performances. As of April 9, 2009, AMEX Biotech Index declined 3%, and the broader NASDAQ Biotech Index was down 6.8% (AMEX Biotech has 20 biotech companies while NASDAQ Biotech Index includes over 130 component companies). Although the Dow and S&P 500 also declined a similar percentage, technology-laden NASDAQ actually has a gain of 4.8%, which is more comparable to the

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OVERVIEWThe financial market and the economic landscape in the U.S. have not changed much since the beginning of the year. And we believe the status quo will last for a while at least in 2009.Large biotech companies are doing OK since they have strong balance sheets to weather the current market turmoil and can generate revenue from product sales. Investors in large biotechnology companies worth more than $1 billion have preserved much of their wealth. Smaller biotech companies, particularly those still in development stage, meanwhile, are under severe strain as the global economic slump cuts into sales and their ability to raise fresh cash to fund research.As we expected, the M&A spree has continued in the first three months of this year. Following the acquisition of Wyeth (WYE) by Pfizer (PFE) announced in January, Merck & Co. (MRK) announced the ...

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