BioWorld International Correspondent

BORNHEIM, Germany - The German company LION Bioscience AG plans to acquire San Diego-based Trega Biosciences Inc. for approximately $35 million in LION American depositary shares.

LION's main motivation for the acquisition was Trega's expertise in preclinical research, in particular the iDEA software that predicts physiological behavior of a potential drug, LION's CEO Friedrich von Bohlen told BioWorld International. For the company it is step three of five to provide full informatics support, called i-biology, for all pharmaceutical research & development, he explained.

"Absorption, distribution, metabolism and excretion [ADME] and toxicology of a potential drug in the human organism is a bottleneck in pharmaceutical research," von Bohlen said. "Like no other software in the world, Trega's iDEA is able to predict and simulate how small molecules work physiologically in the human organism. Predictive success rates are higher than with any other means so far.

"Trega raised the data necessary for ADME prediction, from cooperations with five big pharma companies. They provided Trega with in-house ADME data to feed the software," von Bohlen said. "Trega also has a library of 500,000 chemical compounds for drug discovery, and staff with excellent know-how in medicinal chemistry and assay development."

Von Bohlen said LION, of Heidelberg, wants to provide information technology (IT) solutions to improve the whole R&D process in the pharmaceutical industry.

"Having Trega's outstanding experts and technology on board, we master three out of five disciplines needed to cover pharmaceutical R&D," he said. "LION itself comes from biological data analysis. Entering the alliance with Bayer AG in October in collaboration with Tripos [Inc. of St. Louis] enabled us to cover chemical data analysis as well."

With Trega, LION will extend its capabilities into preclinical research with drug improvement and toxicology, in particular in integrated information management, he said.

"Beneath biology, chemistry and preclinical research, the other two disciplines needed to supply all pharmaceutical research are clinical research in humans and pharmacogenetics, predicting drug reactions in certain individuals," fields in which LION intends to venture, the CEO said.

The Trega deal also completes LION's own drug discovery program on nuclear receptors. "One of the goals running this program is to keep the finger on the pulse of scientists' expectations on IT," von Bohlen said. "The Trega deal will enable us to feed that program with compounds from our own library and even predict their physiological properties to be expected in preclinical tests. Thus, we can improve our own drug discovery business."

Another reason to buy Trega was the option to build up targeted libraries with the know-how of LION's and Trega's experts and their joint technologies, von Bohlen said. "We can precheck in silico how drugs could interact with targets, before we physically run any assays. No matter whether in vitro results meet the prediction or not, they will feed our database with incremental knowledge, being of use for further research, anyway."

Von Bohlen expects the acquisition to be completed by April. The final price for the deal will depend on LION's average closing price per ADS for the 10 trading days ending two trading days prior to the meeting of Trega stockholders.