Staff Writer

BioMarin Pharmaceutical Inc. has acquired Aceras BioMedical LLC's portfolio company, Huxley Pharmaceuticals Inc., for $15 million.

Huxley shareholders could earn an additional $7.5 million if certain regulatory milestones are achieved, and another $36 million could be paid for certain sales and U.S. development milestones.

Huxley was established by Aceras in August 2008 with a focus on developing therapeutic products for rare diseases of the nervous system. The company holds rights to a proprietary form of 3,4-diaminopyridine (3,4-DAP), amifampridine phosphate, for the rare autoimmune disease Lambert-Eaton myasthenic syndrome (LEMS), which results in muscle weakness.

Last week, the Committee for Medicinal Products for Human Use of the European Medicines Evaluations Agency adopted a positive opinion recommending approval of amifampridine phosphate for LEMS. If approved by the European Commission, amifampridine phosphate will be the first approved treatment for LEMS, giving it orphan drug protection with 10 years of market exclusivity in Europe.

Jonathan Aschoff, an analyst with Brean, Murray, Carret & Co., said in a research note that $15 million was a "reasonable price" to pay for 10 years of marketing exclusivity in Europe.

Cowen & Co. analyst Phil Nadeau wrote that "3,4 DAP has very low regulatory risk, and the price paid is commensurate with its market potential." But he added, "This should be a solid, but not spectacular addition to BioMarin's portfolio."

Huxley licensed the rights to 3,4-DAP from EUSA Pharma, which was developing the product after acquiring the rights from the original developer, Assistance Publique Hopitaux de Paris.

BioMarin CEO Jean-Jacques Bienaime, said in a statement, that the company expects to launch the product in Europe in the first quarter of 2010. He also said that BioMarin is evaluating a development strategy for amifampridine phosphate in LEMS in the U.S. and is considering other indications, including multiple sclerosis. Successful development of multiple sclerosis will result in milestone payments to EUSA.

Aceras owned 95 percent of Huxley's stock at the time of the BioMarin acquisition. Aceras is a joint venture established in May 2008 between Aceras Partners LLC and investment bank Rodman Principal Investments LLC.

"With its expertise in ultra-orphan drug development, we believe patients will be well served by BioMarin's acquisition of Huxley," Dan DiPietro, president of Huxley and Partner in Aceras, said in a statement.

Jefferies & Co analyst Eun Yang forecasted $35 million in annual sales of 3,4-DAP in 2013, assuming a market penetration in the European Union of about 40 percent.

Shares in BioMarin (NASDAQ:BMRN) were up 13 cents, closing at $16.79.