Replies

INSIDE WALL STREET
By Gene G. Marcial

MARCH 8, 2004

What George Soros Sees In Valentis

You might call biotech Valentis (VLTS ) a late bloomer. On Dec. 29, it traded at 2.49 but by Feb. 25 had jumped to 5.72. What happened? George Soros, through his Perseus-Soros BioPharmaceutical Fund, bought more shares in a private deal, upping his stake to 20%. Valentis' lead product, Deltavasc, is a novel angiogenesis -- that is, it's designed to grow new blood vessels in patients suffering from arterial disease.

Dennis Purcell, managing director at Perseus-Soros Fund, says Soros wants to help biotechs with good products complete their clinical trials. Initial results from Valentis' Phase 2 trials, which test for safety, look promising, Purcell says. This should enhance prospects for Phase 3, which tests for efficacy in larger samples. While the clinical test was meant to show Deltavasc's safety, there was evidence of efficacy, too, in certain doses, says Valentis CEO Benjamin McGraw III. Valentis has yet to make money. "We are fighting the big guys, such as France's Aventis (AVE ) and Japan's Daiichi Pharmaceutical [in developing blood-vessel products]," says McGraw.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

See Gene on Fridays at 1:20 p.m. EST on CNNfn's The Money Gang.

Dr. Drew Schiff, Associate, Perseus-Soros Biopharmaceutical Fund

Andrew N. Schiff is an Associate of the Perseus-Soros Biopharmaceutical Fund. Over the last ten years, Dr. Schiff has practiced internal medicine at The New York Presbyterian Hospital where he serves as an Assistant Professor of Medicine. He has also been a partner of a family-run investment fund, Kuhn, Loeb & Co., and a consultant for Northwood Ventures, a Long Island, New York based venture group. In these capacities, he has been responsible for identifying investment opportunities and raising additional financing for portfolio companies. Dr. Schiff serves as director of Adams Laboratories. Dr. Schiff is a member of the Board of Directors of the Deerfield Academy and the Henry Street Settlement of New York. He is also a member of the Board of Overseers of the Brown University School of Medicine. Dr. Schiff has a B.S. in neuroscience, awarded with honors, from Brown University, a M.D. from Cornell University Medical College and an M.B.A. from Columbia University.