BioWorld International Correspondent

LONDON - Ardana Bioscience Ltd. acquired Europeptides GEIE for €28 million (US$28.3 million), along with intellectual property from Europeptides' owner, Zentaris AG, in a deal that Ardana says puts it one to two years closer to a marketed product.

Ardana, based in Edinburgh, Scotland, will pay €6.25 million up front, plus potentially €21.75 million in milestone payments. The portfolio of products it is acquiring includes a new formulation of the prostate cancer treatment Leuprorelin, about to enter Phase II studies, and European and North American rights to Teverelix, a gonadatrophin-releasing hormone antagonist, in Phase I trials.

Ardana CEO Simon Best told BioWorld International he also is in negotiations with U.S. and Japanese companies to get European rights to more advanced products.

"[Acquiring Europeptides] puts us one to two years closer to market, and deals coming up will put us closer still," he said. "We will need to raise more money to make all this happen. It is not an immediate need, but I will go out to look for more money in September."

In the meantime, Ardana has enough money to make the up-front payment for Paris-based Europeptides and to move the lead products forward. Best said he hopes to partner and outlicense others.

"The majority of projects are in the reproductive area, where we specialize," he said. "But there are other earlier-stage projects - for example, in obesity and cardiac disorders - which we are now evaluating. We think they may have licensing or partnering potential."

Europeptides, a research and development arm of Zentaris, of Frankfurt, Germany, focuses on peptide drug delivery. Zentaris was spun out of AstaMedica AG, the pharmaceutical branch of Degussa AG, in February 2001. In June 2001, Zentaris pulled its initial public offering on Germany's Neuer Markt, citing market conditions. Since then, the company has reduced its staff from 140 employees to 70 and refocused on cancer. In April, it sold its stem cell research and development unit, MainGen GmbH, to Cryo-Cell Europe NV, of Zutphen, the Netherlands.

Best said he sees a major opportunity in the reformulated Leuprorelin, which is expected to deliver a four- to six-month duration of released drug. In comparison, the original formulation, just off-patent, has one- and three-month durations. The product will enter a second Phase II study in the next few weeks and could reach the market in 2005, he said.

The second product in the portfolio, Teverelix, which Best said has "very unique properties," could be relevant to indications such as endometriosis, male contraception and prostate treatment. In the next two to three months, Ardana will decide whether to take it forward in contraception or endometriosis in house, and also will strive to partner it for prostate indications.

Apart from obesity and cardiac diseases, the preclinical portfolio includes a candidate for erectile dysfunction and an orally active compound that stimulates the secretion of growth hormone. Both products could be ready to enter clinical trials in the next 12 months.

Ardana's existing in-house projects are all two to three years away from Phase I studies.

Ardana was formed in July 2000 to commercialize research conducted by the Medical Research Council's Human Reproductive Sciences unit, which receives £3.8 million (US$6 million) annually in government funding. Since then, the company has raised £14.6 million in two funding rounds, the most recent being a £13.3 round in October 2001.

Best could not say how much money he will seek to raise in September.

"It depends on conditions," he said. "There is still money in private venture capital, and if they are going to put money anywhere it will be in a company like ours, [one] with an advanced pipeline."

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