By Brady Huggett

BioMarin Pharmaceutical Inc. struck a potential $20 million deal with IBEX Technologies Inc. for its pharmaceutical assets ¿ rounding out BioMarin¿s therapeutic pipeline and depleting IBEX¿s ¿ giving BioMarin candidates for larger patient populations than afforded from its existing pipeline.

BioMarin is paying $10.5 million ($8.5 million in BioMarin stock) for IBEX¿s assets, and has promised another $9.5 million based on product approvals.

Neutralase, an injectable heparinase designed to reverse the anticoagulation of blood by heparin, is the most valuable item in IBEX¿s therapeutic hope chest. It has already failed in a Phase III trial with patients who have undergone coronary artery bypass graft (CABG) surgery, but stands ready to enter the arena again with a new dosing scheme.

Phenylase, an orally active enzyme designed to treat phenylketonuria (PKU), is in preclinical development. The $9.5 million payment is broken into a $5.9 million reward for Neutralase approval and $3.6 million if and when Phenylase receives the green light from the FDA.

Fredric Price, CEO and chairman of BioMarin, called the $9.5 million potential payouts ¿the happiest checks I will ever write in my life,¿ and the amalgamation of the two pipelines ¿a seamless fit from a science, technology and medical point of view.¿

¿Our mission is to develop enzymes for life-threatening diseases or conditions where we can be first or second in the market,¿ he said. ¿If we are second, it is because we believe our technology can leap-frog us to first. Given that, let¿s take a look at Neutralase and Phenylase.

¿Neutralase is an enzyme and is used in a life-threatening situation. If it works, it will be second in the market [behind protamine] and Neutralase looks to be superior to protamine in every aspect, so it fits all of our criteria. If it gets approved, it will become the drug of choice in CABG and angioplasty patients.

¿Phenylase is an enzyme for a very serious disease, PKU, and there is nothing on the market, so it would be No. 1. Both of these drugs fit spectacularly well with what we do.¿

On the other side, IBEX, of Montreal, is now unburdened of products it simply couldn¿t afford to advance.

¿We haven¿t been able to move these products ahead as fast as we like or they deserve because of a scarcity of funds,¿ said Paul Baehr, CEO and chairman of IBEX. ¿We now have funds, and we plan to focus more attention on our diagnostics, which earn about $600,000 a year. There are opportunities there that we have not been able to explore and now we have some time to do that.¿

Baehr said IBEX also is considering a number of early stage therapeutic projects and, now ¿armed with a fair amount of cash,¿ it will discuss the prospect of a merger. But IBEX is in no hurry, Baehr said, and considering the difficult market, might ¿sit on the money for a while.¿

Emil Kakkis, BioMarin¿s vice president, scientific affairs, explained the original failed Phase III for Neutralase.

¿[IBEX] had done some dosing and decided on the dose, but it didn¿t use enough reversal agent and the protocol wouldn¿t allow them to use the right amount,¿ he said. ¿They went back and did another Phase II after the Phase III ¿ they treated another 94 patients with two different doses vs. protamine. So we know exactly what we will do in the Phase III trial and we know from the subsequent Phase II trial we can hit the endpoints.¿

BioMarin expects to begin the Phase III trial for Neutralase by the middle of 2002, Kakkis said. If all goes well for Phenylase, BioMarin might move it into humans by 2003, at the earliest.

BioMarin, of Novato, Calif., has its product, Aldurazyme, through Phase III trials. The product is designed to treat mucopolysaccharidosis-I and is partnered with Genzyme Corp., of Cambridge, Mass. It remains BioMarin¿s top priority, Price said, and the company will reveal data from the pivotal trial on Nov. 2. If the data support a filing, BioMarin will look to submit early next year.

BioMarin would like a partner for Neutralase as well. Price presented at the UBS Warburg Global Life Sciences Conference in New York Wednesday morning, and used the opportunity to detail the acquisition.

¿Since I knew the deal was signed [Tuesday] night, I was able to include all this new information, which was exciting,¿ Price said. ¿It was the first day that I could talk about something ¿ here we are, we did the deal on Tuesday night and then I have a wonderful audience at UBS.¿

As part of the acquisition, Robert Heff, co-founder, president and chief operating officer of IBEX, joined BioMarin as vice president, product development.

BioMarin is an enzyme company, and although it acquired enzymes through the deal, the move has changed BioMarin¿s image, Price said.

¿Up until today, we have been thought of as a company with enzymes for orphan diseases ¿ small populations with high price tags,¿ he said. ¿This is a marketplace diversification. Now we can be thought of as a company with enzymes for hundreds of thousands or perhaps millions of patients.¿

BioMarin¿s stock (NASDAQ:BMRN) jumped $1.40, or about 15 percent, Wednesday to close at $10.80. IBEX (TSE:IBT) gained 33 cents, or 127 percent, to close at 59 cents.

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