By Matthew Willett
ID Biomedical signed a share purchase agreement with Intellivax International Inc., a Montreal-based mucosal vaccine delivery company, for about C$20 million (US$12.75 million) in stock.
The merger agreement calls for a stock swap of 4 million shares of ID Biomedical, of Vancouver, British Columbia, giving privately held Intellivax about 13 percent of the combined company. Those shares (TSE:IDB) closed Tuesday at C$5, up C10 cents.
Anthony Holler, ID's president, said the deal gives the company a potential near-term revenue stream from outlicensing Intellivax technology, in addition to a complementary technology that can be used in-house.
"Intellivax is a company that's developing a delivery technique where you can deliver a vaccine to mucosal surfaces, the very surfaces through which the virus itself enters the body," Holler told BioWorld Today. "The idea behind delivering vaccines this way is that if you can develop a mucosal immunity and a systemic immunity, it's a lot better than just developing a systemic immunity like an injectable vaccine does."
Intellivax and ID develop similar vaccines, called subunit vaccines, which differ from attenuated or killed vaccines. Holler said that increases the vaccine's safety.
"The whole industry is moving toward using subunits for safety concerns," he said. "If we can use a peptide or a protein as a vaccine instead of an agent as a whole, it's safer than using the whole organism, and that's the direction ID is going in. We've developed only subunit vaccines, no live or killed vaccines."
Intellivax's lead product is just that - a subunit vaccine for influenza. A prototype of the nasally administered vaccine is in a Phase I trial at the University of Rochester in New York, and Holler said results from that trial should be available within weeks.
Beyond the technology and the product, Holler added, ID gains an experienced development team with the transaction.
"What this means for ID Biomedical is that with this acquisition of people we can now take products from preclinical right through the clinic through Phase III. It gives us increased capability.
"We think the products that we anticipate developing completely on our own are the flu vaccine and our group A strep vaccine. Those products have a big market opportunity, and we have the human resources and financial ability to develop those in the clinic ourselves," Holler said. "We don't want to license those out until late-stage development so that we can get a revenue-sharing agreement."
Other products, however, and the nasal delivery technology itself, he said, are up for grabs by the highest bidder.
"In other areas where we know there's significant interest in mucosal delivery of vaccines where we don't have a strategic interest in developing a product we'll license out to others," he said. "That's one of the business development areas we see we'll move very quickly on. It's a part of our continuing strategy to license out genomics technology to genomics companies. We've got five licenses to date and expect to continue to do collaborations and license agreements."
ID currently has about C$36 million in cash and cash equivalents. With the 4 million newly issued shares it is paying for Intellivax, Holler said, the company will have about 35 million shares outstanding on a fully diluted basis.
"The only reason we were able to jump on this opportunity is the bad market," he said. "Intellivax would have gone public alone with a much higher valuation, but because of the general market position the opportunity presented itself." n