BioWorld International Correspondent

LONDON - Protherics plc agreed to a £7.9 million (US$12.7 million) takeover of Enact Pharma plc, giving Protherics control of an orphan drug cancer therapy that is already used on a compassionate basis and is expected to get its full commercial launch in Europe in 2004 and the U.S. in 2005.

At the same time, Protherics, based in Runcorn, said it will raise £3 million through a fully underwritten placing and open offer, to provide working capital for the enlarged group.

The offer for Enact is made on the basis of £17.05 of Protherics convertible loan notes and 5.93 investment trust shares for every 100 Enact shares.

Andrew Heath, CEO of Protherics, said the terms of the convertible notes "minimize the effects of dilution in the short term - an important factor for our existing shareholders."

Tony Atkinson, CEO of Enact, will join the Protherics board as chief scientific officer. Jon Dickens, who founded Enact in 1998, will work part time for Protherics.

Salisbury-based Enact is quoted on London's Ofex over-the-counter market, and has to date raised £6.2 million, but is facing a cash crunch as it moves lead product Voraxaze through registration. Recommending Protherics' offer, the directors of Enact said, "It is clear that, without further funding in the short term, the company would need to reduce its operational activities significantly and would be unable to fund development of its core drug development programs."

Protherics' objective in acquiring Enact is to build its portfolio of marketed products and thus become self-sustaining. The immunotherapeutics specialist has two FDA-approved products, CroFab, a rattlesnake antivenom, and DigiFab, a treatment for digoxin toxicity. Both are antibody-based products that Protherics manufactures at its facility in Wales. The company also has a royalty stream from its prion technology, which is used in postmortem tests for diagnosing bovine spongiform encephalopathy, or mad cow disease. Heath said, "Enact complements our existing portfolio and pipeline and should quickly provide additional revenue at low cost."

Voraxaze is a rescue therapy for methotrexate toxicity. Methotrexate is a cytotoxic frequently used in cancer chemotherapy, but in 1.5 percent of cases it induces kidney failure, for which there is currently no treatment. Voraxaze is already used on a compassionate basis through the National Cancer Institute in the U.S. and initial sales, on a named-patient basis, are expected this year. A full commercial launch is expected in late 2004 in Europe and early 2005 in the U.S. In time, the label on the drug is expected to be extended beyond its initial niche indication.

Protherics said it will be able to leverage its manufacturing, regulatory and commercialization skills to expedite the marketing approval of Voraxaze.