Seeking to broaden its drug development platform, Forbes Medi-Tech Inc. agreed to buy TheraPei Pharmaceuticals Inc., a privately held firm developing peptides aimed at metabolic diseases.
Terms call for Forbes to make a small up-front payment, issue shares not exceeding 150,000 upon closing, plus pay potential milestones of up to $50 million based on certain clinical achievements. More specific terms were not disclosed, and Forbes said consideration will be made on a staged basis commensurate with the development of TheraPei's technologies.
"We've been looking to bring new technologies into the company," said Laura Wessman, senior vice president of operations for Vancouver, British Columbia-based Forbes, "and we thought this was the right opportunity for us."
TheraPei, of San Diego, is based on drug development technology spun out of Sequenom Inc. in 2004, after Sequenom decided to streamline its business to focus on the diagnostic market. Sequenom, also of San Diego, provided the intellectual property and some seed funding, and holds a minority interest in TheraPei.
For Forbes, which is nearing the end of Phase II with its lead product, FM-VP4, in cardiovascular disease, it was the chance to add new technologies that made the proposed acquisition most attractive.
The company wants to diversify its programs, Wessman told BioWorld Today, adding that Forbes' work to date has stemmed mostly from its core sterol technology.
"We're staying in the cardiovascular and metabolic field, but we're looking for new approaches to drug development," he said.
The company's most advanced program is a series of peptides designed for once-daily administration in diabetes and inflammatory indications. The lead product, in preclinical development, is described as a long-acting VPAC2 agonist aimed at stimulating insulin secretion, and early research suggested promise in lowering glucose levels by targeting a pathway different from that of Byetta (exenatide), a product that has garnered a large share of the diabetes market since its launch last year by San Diego-based Amylin Pharmaceuticals Inc. and Indianapolis-based Eli Lilly and Co.
Amylin reported net Byetta sales of $126.4 million for the third quarter.
In earlier-stage discovery programs, TheraPei is working on ACC2 inhibitors to target diabetes and obesity and SPT inhibitors against inflammation.
Forbes has not yet disclosed a timeline for developing the TheraPei compounds, but Wessman said it's the company's intention to take them through Phase II before seeking a partner.
That's the same strategy Forbes has for its own compounds, including FM-VP4, a cholesterol-lowering drug that is being evaluated in a placebo-controlled Phase II study. The goal of that study is to demonstrate a minimum of 15 percent reduction from baseline in low-density lipoprotein-cholesterol at week 12.
Forbes expects "results before the end of the year," Wessman said.
Upon closing of the acquisition, TheraPei Founder John Nester, who also is a majority shareholder in TheraPei, will assume the role as chief scientific officer at Forbes.
Forbes agreed to pay all consideration for purchasing TheraPei through a minimum of 80 percent in common shares, and the balance in cash.
Forbes reported a net loss of C$6 million (US$5.3 million), or C17 cents per share, for the second quarter. As of June 30, the company had about C$26 million in cash.
Shares of Forbes (NASDAQ:FMTI) were unchanged Wednesday at $2.53.