In a $245 million cash-for-stock transaction, Ortho-McNeil Pharmaceutical Inc. signed a definitive agreement to acquire Peninsula Pharmaceuticals Inc. and its lead anti-infective compound, doripenem.
The new member of the carbapenem class of beta-lactam antibiotics currently is in six Phase III trials and it has fast-track designation from the FDA to treat nosocomial pneumonia, including ventilator-associated pneumonia.
But Alameda, Calif.-based Peninsula has a second product, PPI-0903, that will not be part of the acquisition by Ortho-McNeil, a subsidiary of New Brunswick, N.J.-based Johnson & Johnson. Instead, that product, a fifth-generation cephalosporin, will be spun out into a new company called Cerexa Inc. before the acquisition closes.
A Peninsula spokesman said the company cannot comment on the acquisition until the deal closes. That is expected to occur in the second quarter, at which time J&J will incur a one-time after-tax charge of about 8 cents per share. The purchase will be expensed as in-process research and development.
"Peninsula will further strengthen our presence in the anti-infective arena," said Marc Monseau, a J&J spokesman, "and together with our antibiotic Levaquin, ceftobiprole and Peninsula's doripenem, we'll be able to address a broad array of life-threatening infections."
J&J currently markets Levaquin for lung, sinus, skin and urinary tract infections, and it recently in-licensed the methicillin-resistant Staphylococcus aureus antibiotic ceftobiprole from Basilea Pharmaceutica AG, of Basel, Switzerland, for clinical development.
Monseau declined to say how J&J and Peninsula arrived at the purchase price, or to elaborate on development plans for doripenem.
Peninsula hinted in February that the company may be acquired when it delayed the pricing of its initial public offering to discuss a potential merger with an undisclosed pharmaceutical company. Peninsula filed for an $86.25 million initial public offering in December 2003, and set a price range between $12 and $14 in January for 5.75 million shares. (See BioWorld Today, Dec. 18, 2003.)
News of the acquisition comes about seven months after Peninsula named a new president and CEO, Dennis Podlesak. At that time, Peninsula's former CEO, Paul Truex, a co-founder, took on the role of executive vice president of business development. Podlesak joined the company in September after serving as senior vice president of a North American business unit of Novartis AG, of Basel, Switzerland.
The company was founded in 2001 and has raised more than $80 million since inception, including $22.1 million in a Series B financing held in October 2002, and another $58 million raised in a Series C financing conducted in December 2003. It had $35.5 million in cash, cash equivalents and investments as of Sept. 30.
It currently has 46 employees. Neither Peninsula nor J&J would say how those employees might fit in to the acquisition or Cerexa plans.
"We're currently working on our integration plan for Peninsula, and it's really premature to speculate," Monseau told BioWorld Today.
Doripenem is designed to work by disrupting the cell-wall synthesis of bacteria. The antibiotic was discovered by Shionogi & Co. Ltd., of Osaka, Japan, and in-licensed by Peninsula in 2003. (See BioWorld Today, May 28, 2003.)
The company started a Phase III trial of doripenem the following December in patients with complicated lower urinary tract infections. That trial was followed by two others for complicated intra-abdominal infections, and a second pivotal study for complicated lower urinary tract infections. A fifth Phase III began in June comparing doripenem with intravenous piperacillin/tazobactam in patients with a confirmed bacterial pathogen. And the final pivotal trial started in July comparing intravenous doripenem with intravenous imipenem in patients with ventilator-associated pneumonia. (See BioWorld Today, Dec. 29, 2003, and June 11, 2004.)
Peninsula holds rights to develop and sublicense the compound in North America, South America and Europe.
The company's other product, PPI-0903, also is a member of the cephalosporin class of antibacterials, but was developed as a water-soluble prodrug form of T-91825 by Takeda Chemical Industries Ltd., also of Osaka. Peninsula in-licensed the product in September 2003.
Last May, the company began patient enrollment in a Phase I trial of PPI-0903 in healthy volunteers. Results of that trial showed the compound was well tolerated. Peninsula, which has worldwide development and commercialization rights outside of Japan, had plans to start a Phase II trial of PPI-0903 to treat complicated skin and skin-structure infections in the first half of this year.