Struggling Biotechs Find Merger Partners

Two struggling biotechnology companies are being acquired by stronger firms. MediciNova has entered a deal to acquire Avigen for about $37 million. Both firms have been developing neurological drugs based on ibudilast and its analogs. In May, Avigen dismissed the majority of its employees and embarked on a plan to dissolve itself. Meanwhile, Ligand Pharmaceuticals will acquire Neurogen under a deal in which Neurogen shareholders receive $11 million in Ligand stock plus cash payments if certain milestones are hit. In May, Neurogen laid off half its staff and began exploring a sale of assets or other strategic options.