BioWorld International Correspondent
Probiodrug AG has acquired fellow German firm Ingenium Pharmaceuticals AG in a stock-based deal and has closed a €20.6 million (US$27.7 million) venture capital round at the same time, to fund both an in-house drug development program in Alzheimer's disease and a newly acquired program in inflammation.
Terms of the acquisition were not disclosed, but the deal does not appear to represent a profitable exit for Ingenium's investors, which had put about €83 million into the Munich-based company since its establishment in 1998 as a spin-off from the National Research Center for Environment and Health in Munich.
Halle-based Probiodrug, which was set up a year earlier as a spin-out from the Leibniz-Society Institute "Hans-Knöll-Institut für Wirkstoffforschung" in Jena, had previously raised about €30 million in venture capital funding, CEO Konrad Glund told BioWorld International. It also gained US$35 million from the 2004 sale of intellectual property associated with the diabetes target dipeptidyl peptidase IV (DP-IV) and a related Phase II drug candidate to Oxford, UK-based Prosidion Ltd., a subsidiary of OSI Pharmaceuticals Inc., of Melville, New York.
Probiodrug was attracted to Ingenium for several reasons. "It brings an early preclinical program in kinases, for inflammatory disease," Glund said. "It brings an animal pharmacology unit; it brings a Munich location; and it brings new investors to the company."
The consortium involved in the new funding round included TVM Capital and HBM BioVentures (Cayman) Ltd., along with IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH, Sachsen LB Corporate Finance Holding GmbH, tbg Technologie-beteiligungsgesellschaft, TechnoFonds Bayern, Probiodrug management and Probiodrug Chairman Georg Frank.
Ingenium's senior management team is not transferring into the combined entity, but Probiodrug will retain about 20 Ingenium employees based in Munich. They include a group involved in running its mouse mutagenesis facility and another unit engaged in drug metabolism and pharmacokinetics work.
Ingenium's original business model involved the creation of an ambitious genomics platform based on a genome-wide mouse mutagenesis program, combined with extensive phenotypic data on the individual mouse strains generated. The mutations are stored in a murine sperm bank, from which selected strains can be regenerated via in vitro fertilization. This facility continues to generate a modest revenue stream, but Ingenium shifted into drug discovery and development several years ago. The kinase inhibition program that resulted from this move was the main driver of the acquisition, said Glund, as Probiodrug had been seeking opportunities to broaden its pipeline.
The kinase program is still about a year from the clinic, but it is ahead of Probiodrug's main in-house program in Alzheimer's. The latter is based on the company's observation that the enzyme glutaminyl cyclase is responsible for cyclization of the N-terminal glutamate residues found on amyloid beta peptides, to form pyroglutamate-based variants. Inhibition of the enzyme reversed the process. Probiodrug is now building a drug discovery and development program around this observation — in the belief that the modification, which increases the stability and hydrophobicity of beta amyloid peptides, has an important role in the pathogenicity of Alzheimer's. "It's getting more and more attention from industry," Glund said.
The company previously paid a key role in establishing DP-IV as a target in diabetes therapy and several firms that have developed DP-IV inhibitors, including Whitehouse Station, N.J.-based Merck & Co. and Basel, Switzerland-based Novartis AG, have licensed its patents.