Washington Editor

Genesis Bioventures Inc. on Monday said it signed a binding letter of intent to merge with Innathera Inc., a privately held New York-based firm that focuses on developing treatments for cancer.

Genesis Bioventures Inc. (GBI), of Surrey, British Columbia, will purchase Innathera's estimated 20 million outstanding shares (the value has not been determined) and will retain its employees, Greg McCartney, GBI's chairman and CEO, told BioWorld Today. Also, as part of the deal, GBI will complete a $15 million equity financing, giving the combined companies a base to continue to develop and commercialize technologies.

McCartney would not release other financial terms, short of referring to a company press release that said the merger is subject to due diligence, execution and delivery of definitive documentation, and approval by boards of directors and shareholders of each company.

McCartney discussed GBI's attraction to the merger, saying Innathera's technology aligns itself well with GBI's diagnostics.

Specifically, he cited GBI's Mammastatin Serum Assay (MSA), a breast cancer risk assessment tool that was recently introduced by GBI's wholly owned subsidiary, Biomedical Diagnostics LLC, of Ann Arbor, Mich. MSA is unique because it is a blood test.

As something of a complement to the MSA technology, Innathera is developing two compounds: Inath 011, a monoclonal antibody that has been shown to reduce the proliferation of breast and prostate cells; and Inath 016, an angiogenesis agent that has demonstrated efficacy in colorectal and liver cancer.

"So ultimately, we saw a very synergistic move in getting involved with this company because of the technology they developed, that is, monoclonal antibodies that have stopped the proliferation of metastation of cancer cells, particularly in breast and prostate, and we've found that to be quite synergistic," McCartney said.

The companies expect to complete the agreement by Dec. 31.

In addition to owning a controlling interest in Biomedical Diagnostics, GBI also owns a percentage of Ann Arbor-based Biotherapies Inc., a firm focused on breast cancer research.

Finally, GBI has an investment interest in Prion Development Laboratories Inc., a Buffalo Grove, Ill.-based company that develops diagnostic tests to identify mad cow disease in cattle, and chronic wasting disease in deer, elk and sheep.

GBI, formerly BioLabs Inc., employs nine people.

The company's stock (AMEX:GBI) fell 5 cents Monday, or 4.4 percent, to close at $1.09.