In a $35 million cash transaction, Pyrosequencing AB intends to purchase Dyax Corp's wholly owned separations subsidiary, Biotage LLC.
Located in Charlottesville, Va., with smaller offices in the UK and Japan, Biotage develops, manufactures and sells cartridge-based chromatography drug purification and separations systems used as tools to speed the drug discovery process.
Through the sale of Biotage, Dyax, of Cambridge, Mass., plans to focus exclusively on its biopharmaceutical business, Stephen Galliker, Dyax's chief financial officer, told BioWorld Today.
"We have several candidates in clinical trials, and a very active drug discovery program," he said. "This provides us with the means to continue advancing and accelerating those clinical candidates."
Pyrosequencing, of Uppsala, Sweden, will purchase Biotage for $35 million before transaction expenses and the deduction of about $5 million in Biotage debt. Dyax expects to receive $23 million at closing, anticipated by the end of October. Within a year, Dyax could receive another $5 million, which is being held in an indemnity escrow to cover the representations, warranties and covenants of Dyax contained in the agreement.
Dyax expects its net cash from the sale to reach about $30 million. At the end of the second quarter, Dyax's cash position was $25.5 million, with a $20 million annual burn rate. After the Biotage transaction closes, Dyax will have enough cash to take it through the next two-plus years. The company has 25 million outstanding shares.
Dyax's stock (NASDAQ:DYAX) rose 78 cents Tuesday, or 12.8 percent, to close at $6.90.
Biotage's 120 employees are expected to retain their jobs. The biopharmaceutical side of Dyax also employs about 120 people, most of whom survived a slight cutback last year when 21 positions were eliminated, saving the company about $4 million to $5 million annually. (See BioWorld Today, Sept. 11, 2002.)
Of the earlier cuts, Galliker said the company was looking to balance its discovery efforts with its product development efforts.
"We needed to put more resources in the [clinical], manufacturing and regulatory aspects of the business, and less into the discovery side of it," he said. "We needed to balance, given our resources."
Dyax's biopharmaceutical business is based on its phage display technology, which is used to identify proteins, peptides and antibodies that bind with high affinity and high specificity to targets. Galliker said the company holds the U.S. patent on that technology and licenses it to others. For example, AstraZeneca plc, of London, has licensed the phage display for a neurological and metabolic disease target. (See BioWorld Today, May 15, 2002.)
In its own pipeline, Dyax and its partners are studying two recombinant proteins.
One is referred to as DX-88, and it's the subject of a Phase II trial for the treatment of hereditary angioedema in a 50-50 collaboration with Genzyme Corp., also of Cambridge. The candidate has received orphan drug status in both the U.S. and Europe in hereditary angioedema. DX-88 also is in a Phase I/II for use during cardiopulmonary bypass surgery.
The other product, DX-890, is being evaluated in a Phase II study for cystic fibrosis in a deal with Debiopharm SA, of Lausanne, Switzerland. DX-890 has received orphan drug status in Europe.