BioWorld International Correspondent

LONDON - Investors in Proximagen Neurosciences plc resisted the lure of offers to buy the company and settled, for now, on a licensing agreement with Boehringer Ingelheim.

No details of the agreement were given - not even which of London-based Proximagen's five preclinical programs the deal refers to, other than to say it covers a variety of central nervous system therapies, including treatments for Parkinson's disease.

"I want to shout from the rooftops, but obviously I can't," Proximagen CEO Kenneth Mulvany told BioWorld International. "Boehringer Ingelheim is under no obligation to disclose as it is privately owned."

He added, "It is a tremendous asset that we have partnered." The deal will have three effects, Mulvany said. "It will enable us to move the program more quickly; we will access expertise they [Boehringer] have in the field; and it will have an effect on investment in the program because we will be sharing resources."

Proximagen, which is quoted on London's Alternative Investment Market (AIM), announced July 31 that several people were interested in acquiring the company. As he unveiled the deal with Boehringer, Mulvany said all takeover talks have ended.

"We had a number of approaches, several to buy [the company]. We felt that even though the value of these was at a significant premium [to the share price] there is a greater inherent value in our programs," he added.

Proximagen joined AIM in March 2005, after having raised a mere £400,000 in seed capital following its spinout from King's College London in November 2003.

However, the company was at that point showing an operating profit on its fee for services business, which had a turnover of £737,000 in the year to November 2006. Since then Proximagen has prioritized development of its in-house programs, reducing the level of resource it can put into third-party work, and revenues from services fell to £191,000 in the first six months of 2007.

The focus on in-house development was reflected also in a fall in cash in hand to £10.4 million (US$22.2 million), a net outflow of £1.1 million since the year end in November 2006, as Proximagen beefed up research and development investment.

There are five programs in development currently, with one, PRX4, having the backing of the Michael J. Fox Founda-tion and Elan Corp., of Dublin, Ireland.

That program is working on using a viral vector to deliver a neuroprotective gene directly into the brain for treating Parkinson's disease. Elan has first rights on licensing that product.

The lead program, PRX1, is developing longer-acting derivatives of the dopamine replacement therapy levodopa for treating Parkinson's disease. Those analogues are said to be stable, show improved absorption and increased duration of action. It is believed that will reduce dyskinesia, the involuntary movements that are a major side effect of levodopa.

PRX2 is designed to treat dyskinesia induced by levodopa or dopamine agonists without inhibiting the activity of those drugs.

The company announced recently that it initiated a new indication within the PRX2 program targeting neuropathic pain. Proximagen said this demonstrates its growing expertise with selective neuronal nitric oxide synthase inhibitors.

Meanwhile, PRX3 is described as the "hold-all basket" by Mulvany. "These are projects acquired by in-licensing, and there's a bucket of things we are looking at."

The newest program, PRX5, is concerned with cognition, memory and learning. Proximagen said the program covers proprietary compounds against cognitive decline and Parkinson's disease, that are orally active, selective and highly potent.

Mulvany said investors are supportive of partnering, rather than acquisition, as the company applies its existing cash resources to advance the value of its programs.

"We did speak to investors, and they took a view there is a tremendous amount of value in the programs. Having pharma partners is all important," he said.

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