BioWorld International Correspondent

Biolipox AB enlarged its drug development portfolio by acquiring a series of anti-inflammatory molecules, plus other assets, from the troubled Canadian firm Inflazyme Pharmaceuticals Ltd., in a deal worth up to C$11 million. Solna, Sweden-based Biolipox will pay C$4 million when the transaction closes and could pay C$7 million more in development milestones.

Biolipox is acquiring a series of Phosphodiesterase-4 (PDE4) inhibitors, a series of novel, so-called Leukocyte Selective Anti-Inflammatory Drugs (LSAIDs) and a protein therapeutics platform.

The milestones are largely attached to the PDE4 inhibition program, Biolipox President and CEO Torbjörn Bjerke told BioWorld International. The Swedish firm would make additional payments on the entry of the first PDE4 inhibitor into a Phase IIb and Phase III clinical trials. And it will pay low single-digit royalties on the first marketed PDE4 inhibitor. It also would hand over an additional payment on the entry of the first LSAID into a Phase III clinical trial.

Those obligations are some way off, however, as all of the programs are in preclinical development. The failure of one PDE4 inhibitor, IPL512,602, to demonstrate efficacy in a Phase IIb clinical trial in asthma triggered a crisis at Vancouver-based Inflazyme earlier this year, following which it laid off most of its staff and embarked on a search for a merger, licensing deal or asset sale.

The transaction with privately held Biolipox is subject to approval of Inflazyme shareholders, who will vote on the deal at an AGM on Oct. 25. "We are satisfied with the deal. We also believe it's a win-win situation," Bjerke said. The company has sufficient cash on hand to fund development of the PDE4 and LSAID programs. "We can do without external funds for the further development of the programs," he said. "We are not going to raise more cash because of this."

Biolipox reported SEK111 million (US$17 million) in cash on June 30, and its investors have pledged an additional €15 million before the end of next year.

The most advanced Inflazyme PDE4 inhibitor, which is derived from a compound obtained from a medicinal plant, is six to 12 months from the clinic. The drug class has shown promise in both depression and inflammation, but has been hampered by side effects such as vomiting and nausea. "We believe, so far, the Inflazyme program differentiates from what we have seen [with respect to] side effects," Bjerke said.

The LSAID compounds are derived from a natural product, contignasterol, which was originally isolated from a marine sponge, Petrosia contignata, collected off the coast of Papua, New Guinea. They are thought to act by blocking the influx of leukocytes to sites of inflammation.

Biolipox is seeking a buyer for the third element of the deal, a protein therapeutics platform that Inflazyme obtained through its 2004 acquisition of Cambridge, UK-based Adprotech Ltd. in a stock-based deal then valued at approximately C$20 million.

Its own lead drug candidate, a cetirizine-based, fast-acting nasal spray for treating rhinitis, is in Phase II trials at present. The company in-licensed the drug candidate from Nitec Pharma SA, of Sophia Antipolis, France, and is now seeking to license it, having developed a new liposome-based formulation, which, the company said, minimizes the irritating effects of cetirizine.

Behind that is a program in eoxin inhibition, which was the foundation of the company. Scientific founders, Hans-Erik Claesson and Magnus Björkholm at the Karolinska Institute in Stockholm, discovered a hitherto unknown arachidonic acid pathway leading to the formation of inflammatory mediators known as eoxins. "That is moving into clinical development early next year," Bjerke said. Also in preclinical development is a dual effect respiratory drug, with both bronchodilatory and anti-inflammatory properties.

Two years ago, the company out-licensed to Ingelheim, Germany-based, Boehringer Ingelheim GmbH a selective inhibitor of prostaglandin E2 (PGE2) synthase, a downstream enzyme in the cyclo-oxygenase pathway that catalyzes the conversion of an intermediate compound to the pro-inflammatory mediator PGE2.