BioWorld International Correspondent
LONDON PowderJect Pharmaceuticals plc sold the needle-free drug delivery business around which it was founded to the privately held venture-funded company AlgoRx Pharmaceuticals Inc., for an equity stake currently valued at $10 million.
Paul Drayson, CEO of PowderJect, told BioWorld International that given the current market conditions it was better to own part of a company than to make a cash sale today. “We hope [AlgoRx will go public] in the next two years. We are really quite pleased to identify a company that has the resources to take the technology forward. We would rather have a share in the upside of the technology going forward.”
As part of the agreement AlgoRx’s venture capital investors, InterWest Partners, JPMorgan Partners and Sofinnova Ventures, agreed to invest a further $25 million. This will enable AlgoRx, a specialist in pain management, to continue PowderJect’s powder injection drug programs, including the Phase III studies of the lead product in the portfolio, the anesthetic lidocaine.
“Twenty-five million dollars of new money into the business is what is important. We see this as an important validation of our technology. Although the headline number [at which PowderJect sold the business] could have been bigger, we have got a royalty stream and a continuing interest in the company,” Drayson said. PowderJect will own around 15 percent of AlgoRx.
As part of the sale PowderJect has transferred the staff and the lease on its facilities in Fremont, Calif., to AlgoRx.
Drayson said he is not concerned that AlgoRx will fail to exploit the technology in areas outside its current specialism of pain management. “They have said they want to widen [their expertise] outside pain management. The lead product lidocaine is an anesthetic. They have the ability to take it forward, and we believe a successful new product is the best way to prove the technology.”
Ronald Burch, president and CEO of AlgoRx, said the acquisition “transforms AlgoRx into a late-stage drug development company with a strong pipeline of pain products including both traditional pharmaceutical agents, as well as those based upon the proprietary PowderJect needle-free, pain-free drug delivery platform.”
PowderJect, based in Oxford, signaled in July 2001 that it wanted to sell the needle-free technology and associated development programs to concentrate on what has become its core business of vaccines. It will continue to use the powdered delivery technology in the vaccines field, and is developing a range of powdered vaccines. The company also said it is a world leader in the field of DNA vaccines, an area where it collaborates with GlaxoSmithKline plc, of London.