By Randall Osborne
West Coast Editor
Proving its thick skin after the Phase III blow-up late last year of relaxin for sclerodoma, Connetics Corp. entered a definitive agreement to buy Soltec Research Pty. Ltd. for about $16.9 million in cash.
Soltec, a division of Melbourne, Australia-based F.H. Faulding & Co. Ltd., developed the foam mousse delivery technology licensed by Connetics, of Palo Alto, Calif., for its products. Their relationship began in 1996, said John Higgins, chief financial officer of Palo Alto, Calif.-based Connetics.
"Our strategy at the time was to do individual licenses," he said. "We had success, launched products and we're booking revenues. It's not like we're scrambling to reinvent the company, not at all."
The deal is expected to close in the next 30 days. It calls for Faulding to keep all current projects related to the parent company's injectable technology and products, but Connetics gets worldwide rights to delivery systems that include aqueous-, ethanol- and petrolatum-based foams.
"Our focus is on the ethical pharmaceutical dermatology market for the U.S.," Higgins said. "Our intent is to keep those rights, and that's where most of the value lies in this deal, but [the technology] is definitely applicable to over-the-counter products," and might be licensed out, he said.
"We also have a pretty solid package of products to take to Europe and Asia," Higgins added.
Connetics also will own worldwide rights to Liquipatch, a gel-matrix delivery system that applies to the skin like a normal gel and dries to form a very thin, invisible, water-resistant film that enables controlled release of the active agent.
In October, relaxin, the sclerodoma product, failed to meet its primary endpoint in a Phase III study, which sent Connetics' stock plummeting 79 percent. Formerly called ConXn, the drug is based on a naturally occurring protein and was licensed from South San Francisco-based Genentech Inc. (See BioWorld Today, Oct. 20, 2000.)
Connetics is exploring relaxin - an antifibrotic that dilates existing blood vessels and promotes the growth of new ones - for other indications. The drug, Higgins told BioWorld Today, "seems to be taking the track of the classic biotech product" in its development.
"It's a naturally occurring hormone, regarded to be a hormone of pregnancy," he said, noting that it may have use in infertility and peripheral arterial disease.
Meanwhile, the company has three products already on the market: Olux, a topical foam corticosteroid for short-term treatment of inflammatory and puritic manifestations of moderate to severe corticosteroid-responsiveness scalp dermatoses; Luxiq (betamethasone valerate) foam, 0.12 percent, a less potently formulated corticosteroid for dermatoses of the scalp, or moderate psoriasis; and Ridaura, for arthritis.
Among the new products to be developed, Higgins said, is a foam formulation of minoxidil, which is the active ingredient in the blockbuster hair-loss product Rogaine, "which is a great product, it works, but the delivery is not that great," he said.
"We're looking to start [work on minoxidil] in the next nine months or so," Higgins said.
Connetics' stock (NASDAQ:CNCT) closed Wednesday at $5.437, up 43 cents. n