Startup Champions Biotechnology Inc., which picked up rights to its first two compounds three months ago, brought in a preclinical xenograft platform through the acquisition of privately held Biomerk Inc.

Champions, which was founded in January when it breathed new life into publicly traded shell firm Champions Sports Inc. - a company that ceased operations as a San Antonio, Texas-based sports bar in June 2005 - agreed to issue 4 million restricted shares of its common stock in exchange for rights to Biomerk's Tumorgrafts, or human cancer tumor immune-deficient mice xenografts. Champions also gets the $475,000 Biomerk has in cash, which is expected to cover the company's operations until longer term capital can be obtained.

Champions' stock (OTCBB:CSBR) gained 22 cents, or 76 percent, Monday to close at 51 cents. Following the acquisition, Champions will have about 31.6 million shares outstanding, including 23.6 million restricted common shares.

The company could not be reached for comment but said in the press release that it believes there are "significant synergies" between the two firms. Biomerk, which was founded only last year, has focused its efforts on generating xenograft models to identify chemotherapeutic agents. Its Tumorgrafts, unlike standard cell line-derived xenografts, are designed to be implanted directly from primary human cancer tumors without passage in cell tissue culture. Therefore, Biomerk believes, they will serve as more accurate reflections of human cancer biology and be more helpful in predicting clinical outcome.

There also are other connections between the firms. Biomerk owner David Sidransky is a major shareholder in Champions, and Champions President and CEO James Martell has served as a consultant to Biomerk.

The acquisition falls in line with Champions' business strategy, which is to acquire both early stage drug candidates and technologies to improve methods of treating disease. The company began in February to build its therapeutic pipeline, gaining patent rights covering two benzoylphenylurea sulfur analogue compounds from Johns Hopkins University in exchange for 550,000 shares of stock. Those candidates, described as antimitotic inhibitors aimed at microtubule-associated protein tau-deficient tumors, have demonstrated promising activity against prostate and pancreatic cancer cells lines.

Additional acquisition or in-licensing activities are expected. The company's plan is to develop drug candidates through preclinical trials, possibly moving into early clinical studies, before looking for a partnership or outright sale of the compounds for further development and commercialization.

Champions is based in Arlington, Va.