By Lisa Seachrist
Washington Editor
Maxim Pharmaceuticals Inc. will acquire Cytovia Inc. in an all-stock transaction worth $79 million based on Tuesday's closing price.
Under the terms of the agreement, San Diego-based Maxim will issue 1,585,214 shares of common stock to the shareholders of privately held Cytovia, also of San Diego. Final approval of the acquisition must be granted by Cytovia's shareholders. Upon completion of the transaction, Cytovia's shareholders will own 7 percent of the combined company, and Cytovia will become a wholly owned subsidiary of Maxim.
Maxim's stock (NASDAQ:MAXM) closed Tuesday at $49.937, up $3.812.
"Cytovia is the best fit of any company I've acquired, both in terms of the people as well as the company's technology," said Larry Stambaugh, Maxim's chairman and CEO. "With this deal we're extending our product portfolio with Cytovia's drug candidate pipeline and screening technology. And, Cytovia is gaining access to our clinical development and regulatory expertise."
Stambaugh told BioWorld Today he expects the transaction to be completed in a matter of weeks.
Cytovia, a company spun off from Irvine, Calif.-based CoCensys Inc. in 1998, focuses its efforts on caspases - key enzymes that trigger the cellular signaling pathways involved in apoptosis, or programmed cell death. The company has developed a number of small molecules that either activate or block the activity of caspases. A number of these small molecules have entered late-stage preclinical development as drug candidates for the treatment of cancer, oral mucositis and cardiovascular disease.
CoCensys received an equity stake of less than 15 percent when it spun out Cytovia, but later sold its position.
One of the drug candidates is a caspase activator being developed as a way to destroy drug-resistant cancer. Two of the other drug candidates are caspase inhibitors developed for the treatment of oral mucositis. The third caspase inhibitor is designed to protect heart muscle from reperfusion injury. It also has been shown to be active in models of acute liver failure associated with hepatitis, sepsis and stroke.
"We expect to see one of these candidates enter the clinic late this year or early next year," Stambaugh said.
In addition to its drug candidates, Cytovia has a high-throughput screening system designed to identify caspase inhibitors and activators.
Maxim's lead drug is Maxamine (histamine dihydrochloride). The company is developing the drug as a combination therapy with interleukin-2 for the treatment of malignant melanoma. The company intends to file a new drug application for Maxamine this summer.
In addition to melanoma, the company has a Phase III clinical program for Maxamine in acute myelogenous leukemia. Phase II studies are under way in hepatitis C and advanced renal cell carcinoma. The company is developing MaxVax, a mucosal vaccine carrier platform, and MaxDerm for the treatment of oral mucositis, herpes, decubitus ulcers, shingles, burns and related conditions.