MediGene Signs Agreement to Acquire UK-Based Avidex Ltd. in a EUR 50 Million Share-for-Share Transaction
* Avidex’ portfolio includes RhuDex®, a drug candidate with a billion EUR market potential about to start a pilot phase IIa clinical trial
* Additional pre-clinical projects and innovative platform technology based on monoclonal T cell receptors
* Avidex’ shareholders to invest GBP 3 million, Societe Generale to subscribe to up to 2 million new MediGene shares
Martinsried/Munich - August 30, 2006. The biotechnology company MediGene AG (Frankfurt, PrimeStandard, TecDAX, MDG) announced today that it has signed an agreement on the acquisition of the privately held biotechnology company Avidex Ltd. based in Oxford, UK. With this acquisition, MediGene will diversify and broaden its drug pipeline with several drug candidates to treat cancer and autoimmune diseases, and will add a proprietary technology platform to further fuel its future drug pipeline. The lead product, RhuDex®, an orally available CD80 inhibitor, will soon enter a phase IIa clinical trial for the treatment of rheumatoid arthritis, and is estimated to achieve annual peak sales of more than EUR 1.5 billion. Several other drug candidates with high potential are currently in research and pre-clinical development stages. Additional drug candidates will originate from the highly innovative monoclonal T cell receptor technology platform (mTCR), on which Avidex already has a partnership with Syngenta AG. A purchase price for Avidex Ltd. of approximately EUR 50 million in the form of new MediGene shares was agreed upon. The UK-based company will remain at its premises in Oxford and will be operated as a subsidiary of MediGene AG.
Statement by MediGene AG: “The acquisition of Avidex is a major step forward for MediGene and makes our portfolio to one of the strongest among the European biotech companies,” explains Dr. Peter Heinrich, CEO of MediGene AG. “Avidex’ autoimmune and cancer product portfolio nicely complements our pipeline and offers additional partnering opportunities. Soluble T cell receptors are one of the most modern therapeutic concepts for cancer and autoimmune-therapy. With the blockbuster candidate RhuDex®, the mTCR platform and the cancer drugs derived from our EndoTAG-platform we are well positioned to further develop our business beyond our mature products Eligard and Polyphenon, and to take our innovative drugs to success.”
Statement by Advent, lead investor in Avidex: “We are very pleased and excited with this transaction as it will combine the world class research capabilities of Avidex with the very strong development and commercial expertise in MediGene. We are confident this combination will create one of Europe’s leading biotechnology companies with a very substantial pipeline of product opportunities,” comments Jerry Benjamin, General Partner of Advent Venture Partners Limited.
Deal structure: With the signing of the share purchase agreement MediGene intends to acquire 100% of the Avidex shares outstanding. As a consideration the Avidex shareholders will receive approximately 8.2 million MediGene shares. Thus the value of the transaction at current market price amounts to approximately EUR 50 million. Shareholders owning over 90% of the Avidex shares have already agreed on the acquisition. Upon closing of the transaction which is scheduled for mid-October, Avidex shareholders will own 28% of all MediGene shares outstanding. The majority of the new shares are subject to a lock-up period of twelve months. Between now and closing of the acquisition Avidex’ investors will contribute GBP 3 million in cash to fund Avidex’ clinical and preclinical development programs. This capital increase led by Advent raises Avidex’ cash level to approximately EUR 7 million.
Step-up equity financing agreement: In order to secure additional cash funds for the subsequent development of the acquired projects, MediGene has entered into a step-up financing agreement with Societe Generale. Pursuant to the agreement, MediGene has the option of successively selling up to two million new shares to Societe Generale at a level close to the current market price within a period of 18 months.
Financial forecast: Following the acquisition of Avidex, MediGene’s financial forecast for the financial year 2006 is as follows: Revenues of 20-25 million Euros, and a net loss (EBIT) of approximately 20 million Euros.
Avidex, products, technology and management: Avidex Ltd. develops drugs for treating cancer and autoimmune diseases. The two most important development programs are:
The lead drug RhuDex® is being developed as an oral disease modifying and anti-arthritic agent. It is designed to block the underlying disease-causing mechanism by specifically blocking T cell co-stimulation via the CD80 pathway. As RhuDex® is the first oral inhibitor of this well defined target, it offers a competitive therapeutic advantage. The drug candidate has successfully completed two Phase I clinical trials in healthy volunteers. A first exploratory study (phase IIa) in patients with rheumatoid arthritis is scheduled to start during the coming months. With an estimated annual sales potential of more than EUR 1.5 billion, RhuDex® is regarded to be of blockbuster status.
The highly innovative mTCR technology (monoclonal T cell receptors) enable Avidex to produce fully human, soluble T cell receptors with high affinity. These mTCRs can recognize and bind to disease specific peptide antigens, that are presented by the Major Histocompatibilty Complex (MHC). These antigens are inaccessible for monoclonal antibodies and so the soluble T cell receptor technology opens a new field of options to target cancer, autoimmune, allergic and infectious diseases. The pipeline of Avidex comprises six drug candidates at the pre-clinical stage derived from the mTCR technology. Among them are EsoDex® for the treatment of lung and bladder cancer and HiDex® for the treatment of type 1 diabetes.
Avidex was founded in 1999 as a spin-out of Oxford University. The company currently employs 42 people, most of them scientists. Avidex’ CEO, James Noble, will leave Avidex and join MediGene’s supervisory board. He is a former Finance Director of British Biotech plc and has served as a board member of several companies including Oxagen, Powderject, OGS and Advanced Medical Solutions. Avidex’ CBO, Dr. Neill Moray MacKenzie, becomes Senior Vice President Commercial Strategy and Business Development and Dr. Bent Jakobsen, CSO, becomes Senior Vice President Research, both with respective responsibility for the UK-site. Dr. MacKenzie is a former founding board member and Senior Vice President Business Development of Oxford Biomedica plc, and has held Senior R&D posts in Wellcome/ICI, University of London and with the MRC. Dr. Jakobsen, the company founder, has been head of the Immune Receptor Group at the Institute of Molecular Medicine at Oxford University and is the inventor of monoclonal T cell receptor technology. The expertise and input of the management team together with the whole Avidex’ staff, will be instrumental to fully exploit the products and the technology.
Avidex’ main investors are the British investment companies Advent Venture Partners and Quester as well as Syngenta AG of Switzerland. With this transaction Advent Venture Partners will become the biggest shareholder of MediGene.
This press release contains forward-looking statements that involve risks and uncertainties. The forward-looking statements contained herein represent the judgement of MediGene as of the date of this release. These forward-looking statements are no guarantees for future performance, and the forward-looking events discussed in this press release may not occur. MediGene disclaims any intent or obligation to update any of these forward-looking statements. MediGene(TM) and EndoTAG(TM) are trademarks of MediGene A, Polyphenon® E is a trademark of Mitsui Norin, Eligard® is a trademark of QLT USA, Inc.
- Ends -
MediGene AG is a publicly quoted (Frankfurt: TecDAX), German-American biotechnology company located in Martinsried, Germany and San Diego, USA. MediGene is the first German biotech company with a drug on the market. The NDA for a second drug, Polyphenon® E Ointment, has been submitted. In addition, MediGene has several oncological drug candidates undergoing clinical development, and possesses innovative platform technologies for drug development. MediGene’s core competence lies in research into and development of novel approaches for the treatment of various cancer and tumor diseases. MediGene has 125 employees.
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