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Proximagen buys Cambridge Biotechnology from Biovitrum

 Swedish company Biovitrum has definitively abandoned all plans of developing primary healthcare products, preferring henceforth to concentrate on niche medicines. Its merger with fellow Swedish company Swedish Orphan International AB announced today will result in a new company, Swedish Orphan Biovitrum or SO-Bi, specialising in the treatment of rare diseases (1) (see Summary Table of Acquisitions).
Last week, Biovitrum achieved a major new objective its re-centring strategy with the sale of UK research subsidiary Cambridge Biotechnology (CBT) to another UK firm, Proximagen Neuroscience. The agreement was signed on 30 October and is expected to be finalised in mid-November (see Summary Table of Acquisitions).

Extending its CNS portfolio

Biovitrum began to refocus on specialised medicines in the first half of 2008 (see BioPharmaceutiques No 53 and No 66). In early 2009, the company instructed London investment bank Nomura Code to transform its subsidiary into an independent spin-out (see BioPharmaceutiques No 93). CBT was created in 2001 as a spin-off of Pfizer and Cambridge University before being purchased by Biovitrum in 2005. Its activities, focusing on inflammation, pain and obesity, no longer correspond to the parent company's new strategic vision. The acquiring company, Proximagen, specialises in treatments for neurodegenerative diseases, and in particular Parkinson's disease. Its most advanced programme, PRX1, a pro-drug platform designed to improve the characteristics of L-dopa in the symptomatic treatment of Parkinson's disease, forms the subject of a licensing agreement signed in 2008 with US company Upsher-Smith Laboratories. A first product developed under this programme is now ready to enter clinical trials. With support from the Michael J Fox Foundation and Irish drug company Elan (which holds a licensing option), the firm is also pursuing a gene therapy, PRX4, designed to prevent neuronal degeneration. Still in Parkinson's disease, Proximagen is working on a programme involving dopamine D1 agonists (PRX5), a programme involving neuronal nitric oxide synthase inhibitors (PRX2) to alleviate dyskinesia associated with levodopa therapy, and a programme involving a neuroprotectant (PRX6) to block an inflammatory pathway that results in cell death.
The purchase of CBT will provide Proximagen with a portfolio of new products, from the discovery phase to the clinical phase, having a range of potential applications that extends beyond central nervous system diseases. Two programs have reached the clinical trial phase, one involving serotonin 5HT2c receptor agonists, which was successfully brought by Biovitrum to phase IIb in the treatment of obesity (2), and a programme of 5HT6 receptor antagonists, for which a phase I study was successfully completed in 2007 (see Summary Table of Clinical Studies). Biovitrum intends to keep only the adenosine A2A receptor agonist programme (now in phase II studies in pain and inflammation) and a mimetic leptin (currently in the preclinical phase in obesity) from the CBT portfolio, for which another buyer must be sought (see BioPharmaceutiques Nos 65 and 93).

New acquisition on the horizon?

As regards finance, Biovitrum will receive a percentage of all revenue generated by products in the portfolio transferred to Proximagen. However, there will be no down-payment, which will allow Proximagen to preserve its cash flow in order to develop these new products, but will also permit another acquisition, possibly in 2010. The company's cash position received a healthy boost in June thanks to fundraising through the financial markets of GBP 50 m (EUR 55 m, excluding costs), one of the largest fundraising operations conducted by a UK biotech company in the last decade (see Summary Table of Fundraising). At the time, Proximagen stated that this consolidation of its cash position, which stood at GBP 57 m (EUR 63 m), would be used to fund the acquisition of programmes or licences for products under development.

(1) Full details of this operation, announced today, will be given in the next edition of BioPharmaceutiques.

(2) This programme was conducted in partnership with GlaxoSmithKline. The UK company terminated its partnership with Biovitrum in 2007 on account of disappointing clinical results.