BioWorld International Correspondent
Genetronics Biomedical Corp. acquired Inovio AS in a combined cash and stock deal worth $10 million, initially.
Inovio shareholders would gain additional milestones, payable in Genetronics stock, should Inovio reach defined revenue targets after the merger.
Inovio, of Oslo, Norway, decided to take that route because of the difficulty of raising money in Norway and because a tie-in with Genetronics, of San Diego, would give the company better access to its most important market.
"It is quite clear that, here in Norway, we are quite far away from the main markets for our technology," Inovio CEO Iacob Mathiesen told BioWorld International. The company previously had considered relocating to the U.S., he said, although that would have required significant funding. "Norway is not the easiest place to be if you want to build a biotechnology company," he said.
As yet, it is undecided whether Genetronics will retain Inovio's existing operation in Oslo, which employs six people. But Mathiesen is relocating to San Diego in August to become executive director of gene delivery for Genetronics.
Under the terms of the transaction, Inovio's shareholders will receive $3 million in cash plus $7 million in Genetronics stock. The Norwegian company has just $775,000 in cash but has a further $2 million on the way in committed grants. One of its main partners is the U.S. Army, which is testing its proprietary electroporation technique for introducing naked DNA to skeletal muscle cells. (See BioWorld International, July 9, 2003.)
The technology platform has potential application in vaccine delivery, gene therapy and the delivery of genes encoding monoclonal antibodies and other therapeutic proteins. A therapy based on the technique is due shortly to enter the clinic: Along with an undisclosed partner, Inovio is about to commence a Phase I/II trial of a DNA-based vaccine against prostate cancer in the UK.
The acquisition has provided Inovio shareholders with a profitable exit. The company, which was founded in 1999 by Mathiesen and Terje L mo at the University of Oslo, had raised just NOK21 million (US$3.3 million) in venture capital.