BioWorld International Correspondent
LONDON - Xenova Group plc is to buy all remaining rights to two anti-addiction vaccines, TA-CD and TA NIC, from the ImmuLogic Pharmaceutical Corp. Liquidating Trust for $1 million.
To fund the move, the Slough-based company raised £680,000 (US$1.1 million) in a rights issue, placing 1.77 million shares at 38.5 pence per share, a discount of about 10 percent to the stock's Jan. 14 closing price.
The deal releases Xenova from paying potential clinical milestones of $11 million, plus royalties on sales of TA-CD for cocaine addiction and TA-NIC for nicotine addiction. TA-CD is in Phase II work while TA-NIC is in Phase I.
In the original agreement, milestones were due at the end of each clinical development phase. Emma Palmer, an analyst at West LB Panmure in London, said, "Some [milestones] were coming due in the near future. Xenova's cash situation will therefore be helped by not having to pay these."
The vaccines were acquired from ImmuLogic, of Waltham, Mass., in December 1998 by Cantab Pharmaceuticals plc, which Xenova took over in 2001. Cantab paid $9 million in shares and, in return, got the vaccines plus $6 million in cash to fund their development.
In February 1999, ImmuLogic announced it was liquidating itself following the failure of its two lead allergy vaccines, Allervax Ragweed and Allervax CAT. The liquidators subsequently sold off the $9 million in Cantab shares for $8.3 million in June 2000.
Following the payment from Xenova, ImmuLogic now is expected to complete its liquidation.
Commenting on the deal, Xenova CEO David Oxlade said, "[This] releases Xenova from large potential payment obligations and consequently increases our commercial flexibility in relation to both TA-CD and TA-NIC." The company expects that a further Phase II study of TA-CD will begin shortly, while TA-NIC will enter a second Phase I trial in mid-2003.