BioWorld International Correspondent

LONDON - Drug delivery specialist Lipoxen raised £2.6 million (US$4.9 million) through an equity investment by vaccine company Serum Institute of India, and at the same time sealed an agreement for Serum to scale up manufacture of its lead product, PolyXen, a natural biopolymer for PEGylating protein drugs.

The companies have an earlier agreement centered on ImuXen, Lipoxen's liposomal system for delivering DNA and protein vaccines. The London-based company issued 10 million shares at 26 pence per share, increasing Serum's holding from 4.1 percent to 12 percent. In addition, Lipoxen granted Serum a warrant to buy 2.7 million shares at 35 pence per share over the next two years. If exercised, that would increase the Pune, India-based company's holding to 14 percent.

The investment by Serum signals a move away from vaccines. Cyrus Poonawalla, managing director said, "Our investment and increasing strategic collaboration was prompted by Serum's desire to become a large contributor in the biopharmaceutical world and by the very positive preliminary scientific data."

For Lipoxen, the deal is a route to accessing commercial-scale, FDA-compliant manufacturing without having to make a huge capital investment in its own facility, said Scott Maguire, CEO. "The coupling of Serum's vast manufacturing infrastructure with Lipoxen's novel technology makes for a powerful partnership that positions our companies as potential key players in the world of vaccines and protein drugs," he said.

Lipoxen will make an undisclosed payment to Serum for setting up the facility, which will be used to supply Lipoxen's collaborative partners, and for preclinical and clinical trials supplies.

The platform drug delivery technologies being developed by Lipoxen will be applied to rejuvenate marketed drugs. It describes PolyXen as the next generation of PEGylation. The product is based on a natural polymer polysialic acid, which can prolong the half-life of both small-molecule and protein drugs.

Lipoxen claims several advantages for PolyXen over PEGylating drugs with synthetic polymers, including a lower potential for unwanted immune responses and a lower level of inactivation of the active compound. At the same time, the key advantage of PEGylation, which is to increase the half-life of the PEGylated drugs, is in most cases equalled or exceeded by PolyXen. The advantages have been demonstrated preclinically with interferon.

In total, Lipoxen has established a pipeline of 13 products, including a proprietary form of interferon alpha and human insulin. The company has agreements with Amgen Inc., Genentech Inc. and Genzyme Corp. for the development of unnamed products, and with Baxter Inc. to conjugate PolyXen with Baxter's Factor VIII blood product for hemophiliacs.

Lipoxen joined the London Stock Exchange's Alternative Investment Market in January 2006, raising £3.78 million when it reversed into cash shell Green chip Investments plc. The shares were valued at 13.5 pence each on flotation, and now stand at 22 pence.