By Brady Huggett

Altana AG liked working with GPC Biotech AG so much, it bought 8.3 percent of the company.

Bad Homburg, Germany-based Altana ¿ a pharmaceutical partner of GPC¿s through Altana¿s subsidiary, Byk Gulden ¿ is buying about 1.7 million shares of Martinsried, Germany-based GPC¿s stock, raising about EUR34.2 million (US$30.9 million) and fortifying GPC¿s cash standing.

¿First of all, we have been in a strong financial position anyway,¿ said Bernd Seizinger, president and CEO of GPC. ¿This is a further consolidating and solidifying of our cash position, and should give us funds for several years. Cash is king in the biotech industry and the markets are not in very good shape. This allows us to not be forced to go back to the market.¿

GPC¿s third-quarter earnings are due to be released November 12. At the end of the first half of 2001, GPC had about EUR105.4 million in cash and cash equivalents, Seizinger said.

The roughly 1.7 million shares translates to 8.3 percent of GPC, making Altana the second largest holder of GPC stock behind the venture capital firm BBD Bioventures, of Cambridge, Mass., which holds about 13 percent.

Altana became involved with GPC in December 1998 through Byk Gulden. Byk and GPC agreed to investigate genomic targets for controlling Helicobacter pylori and Chlamydia pneumoniae infections. The collaboration has a potential worth of $30 million. Seizinger said the positive working relationship forged by the agreement had a lot to do with the equity investment.

¿We have been good partners for several years ¿ this is one of the reasons Altana is making the investment,¿ he told BioWorld Today. ¿It¿s the logical extension of its belief that we are a good partner. The investment is fueled on the one hand by our partnership and on the other hand by its belief in our upside.¿

A belief that spurred Altana to pay EUR20.25 per share, a healthy mark up to GPC¿s closing price Tuesday of EUR11.95. The stock jumped about 32 percent in Wednesday¿s trading, closing at EUR15.81. GPC trades on the Neuer Markt under the symbol GPC.

¿Clearly, [Altana] recognizes the upside to GPC,¿ Seizinger said.

The extra cash will allow GPC to continue its U.S. expansion. GPC now has about 42 percent of its 160 employees in the States, Seizinger said. It has facilities in Waltham, Mass., as well as Princeton, N.J. The Waltham location came about through an acquisition of Mitotix Inc. in March 2000, and GPC has Marcel Rozencweig muscling up the Princeton location.

¿[Rozencweig] came from Bristol-Myers Squibb [Co., of New York],¿ Seizinger said. ¿He was head of clinical development worldwide, in oncology, infectious disease and immunology. He brought seven compounds to market in oncology and 11 overall.¿

The funds will further be used for GPC¿s three-channeled pipeline. It has an anticancer program in CDK inhibitors, consisting of three main candidates; GPC plans to select one candidate for development before the end of the year. A second program, for an antibody treatment against transplant rejection and graft-vs.-host disease, should produce an investigational new drug application before the end of the year. Its third program, this one for a monoclonal antibody against lymphoid malignancies, is on a similar track and GPC expects to file an investigational new drug application in the second half of 2002.

GPC sports a dual business model, Seizinger said. It generates revenue through its pharmaceutical alliances ¿ including agreements with DuPont Pharmaceuticals Co., of Wilmington, Del.; Bayer AG, of Leverkusen, Germany; Boehringer Ingleheim GmbH, of Ingleheim, Germany; and Aventis Pharma AG, of Frankfurt, Germany ¿ and has internal programs that are ¿progressing very nicely,¿ Seizinger said. The company hopes to in-license a compound already in development in the next six to 12 months, and has an ongoing search for such a product now.

¿Six months ago, we didn¿t have the credibility to in-license because we didn¿t have the infrastructure,¿ Seizinger said. Thanks in part to Rozencweig and the U.S. growth, ¿we have that credibility,¿ he added.