BioWorld International Correspondent

LONDON - Atlantic Healthcare Ltd. sealed the first deal since its formation in 2006, licensing worldwide rights to alicaforsen, a Phase III antisense compound being developed for gastro-intestinal disorders, from Isis Pharmaceuticals Inc., of Seattle.

Isis will receive an up-front payment from Atlantic Healthcare in the form of equity, valued at approximately $2 million, and will earn milestones and royalties as the drug progresses through development.

"This agreement is consistent with our strategy of outlicensing drugs for diseases outside of our cardiovascular and metabolic areas of focus," said B. Lynne Parshall, CFO of Isis, in announcing the deal. She added, "[It] places Atlantic Healthcare among our satellite companies, along with Alnylam, OncoGenex and others."

Allan Cambridge, CEO of Atlantic, said onward clinical development of alicaforsen will be outsourced. "We plan to take it through to the market in Europe and the U.S, and are putting the infrastructure in place at the moment."

Alicaforsen is an antisense inhibitor of ICAM-1, a molecule that plays a key role in a wide range of inflammatory and autoimmune conditions such as Crohn's disease and ulcerative colitis, recruiting and activating immune cells associated with the inflammatory response in those diseases. The product failed in a Phase II trial in Crohn's disease carried out by Isis, but in December 2004, the company announced positive results in Phase II in ulcerative colitis, in which the compound is administered as an enema.

Atlantic will develop the compound first in pouchitis, a complication caused by surgery to treat ulcerative colitis, where it has orphan drug status. It is estimated it will cost $6 million to complete development and obtain approval, with launch expected in 2009. Following on, Atlantic will continue development of alicaforsen in the treatment of ulcerative colitis.

"The timelines and development plans are in place. We are not picking up their [Isis'] development plans, but we are building on their expertise. The next stage is to meet the FDA and submit our plans," Cambridge said.

Atlantic has raised around $1 million from private investors and business angels to finance the start-up of the company. On the back of the Isis deal it also is planning to buy a contract research organization (CRO), also for shares. It is planning a £5 million (US$9.7million) fund raising later this year.

Cambridge and his co-founder Toby Wilson Waterworth, executive chairman, are following the lead of a former employer, Alizyme plc, which has in-licensed and developed a number of gastrointestinal products, working on a virtual business model.

Atlantic wants to in-license more products, and Cambridge said he is currently looking at 15 or so opportunities similar to the Isis deal.

"We are looking for products in niche hospital-administered treatments that fall below the radar screen of major companies or are no longer of interest to big pharma," he noted.

The company is not focused solely on drug development, but on health care as whole, and has ambitions to become what it describes as a "mini-conglomerate."

"We plan to have a number of operating divisions. One is Atlantic Pharmaceutical; another is Atlantic Clinical, where we will provide Phase I to Phase IV CRO services. Another could be in medical diagnostics," Cambridge said. The CRO Atlantic is negotiating with currently is profitable.

Beyond the £5 million private round planned for this year, Atlantic hopes to join the Alternative Investment Market in the next 12 to 18 months. "With in-licensing and acquisitions, we hope to get to the stage where we can go to market with a reasonable valuation," Cambridge said.

He is confident of getting support for the private fund raising. "One of the reasons we chose the business angles we have, is that they will continue to invest," Cambridge added.

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