Essential Therapeutics Inc. on Friday said it will strengthen its clinical and preclinical pipeline through the acquisition of Maret Pharmaceuticals Inc. in a deal valued at up to about $6.8 million.
Essential, formed six months ago through the merger of Microcide Pharmaceuticals Inc. and The Althexis Company Inc., will purchase Maret in a stock-for-stock exchange in which Essential will issue up to 2 million shares of common stock that were worth $3.41 each at market close Thursday. The newly issued shares are subject to lock-up for at least 12 months following the close.
Mark Skaletsky, chairman and CEO of Waltham, Mass.-based Essential Therapeutics, told BioWorld Today that the acquisition is expected to be completed in about 30 days. Essential has about 38 million outstanding shares (including 20 million in preferred shares issued when the company was formed), thus upon completion of this deal, Maret will own between 6 percent and 7 percent of the company.
Essential’s stock (NASDAQ:ETRX) closed Friday at $3.50, up 9 cents. Privately held Maret Pharmaceuticals, located in Newport Beach, Calif., was founded in 1994.
Of the acquisition, Skaletsky said, “We are extremely excited about this opportunity and we’ll be diligent about pursuing it aggressively.”
Maret is a development-stage company with clinical and preclinical programs in hematology, oncology and the prevention of serious infectious diseases. The company’s lead product which will become Essential’s lead candidate is MARstem, a peptide analogue of the human hormone angiotensin. It is being studied in both end-stage renal disease and breast cancer.
Skaletsky said MARstem is a small-molecule product designed to restore blood cell counts following chemotherapy or bone marrow transplantation. Use of MARstem could prevent thrombocytopenia, anemia and infection in patients following chemotherapy or bone marrow transplant, he said.
In November 2000, Maret said MARstem exhibited an excellent safety profile in a Phase I/II trial in breast cancer patients. According to the company, the compound reduced the frequency of grades 2-4 thrombocytopenia, grades 2-4 anemia and grades 3-4 lymphopenia.
MARstem is expected to be in a formal Phase II trial in breast cancer patients this year, Skaletsky said.
Meanwhile, the Phase I/II end-stage renal study, which began in June 2000, is ongoing.
Maret’s team of seven employees will join Essential’s staff of 135 located in both Waltham and Mountain View, Calif.
“The combination of Essential’s core competencies in lead optimization and preclinical development with Maret’s development candidates and clinical expertise creates a powerful combined entity with a strong product pipeline,” Leonard Borrmann, Maret’s president and CEO, said in a prepared statement. “We look forward to joining with Essential to provide products to improve human health in important therapeutic categories.”
When Essential was formed in July 2001, the founders had two goals in mind. “We wanted to move our internal programs forward, and those programs for the most part are at an earlier stage,” Skaletsky said. “The other thing we thought was very important was to get in the development stage faster than our own programs would allow, so we looked at in-licensing, and it wasn’t just in-licensing anything. We’re looking at programs and projects that are in a similar focus area to where we are developing our other projects.”
Besides the MARstem project, Essential is working with Johnson & Johnson to develop injectable and oral cephalosporin, and the company is developing efflux pump inhibitors.
Skaletsky formerly was CEO of Waltham-based GelTex Pharmaceuticals Inc., acquired by Genzyme General, of Cambridge, Mass., in September 2000 for more than $1 billion. (See BioWorld Today, Sept. 12, 2000.)
Essential, a research and development organization, has a broad-based platform, including the proprietary VALID Microbial Genomics technologies and its target validation system, known as ACTT.