By Brady Huggett
Alexion Pharmaceuticals Inc. acquired Prolifaron Inc. through a common stock exchange worth $41 million that should allow Alexion to move products from ground zero to the shelf, the company said.
"Our objective is melding discovery and development into one integrated company and to be able to take drugs from research through the commercialization stage all in one," said Leonard Bell, president and CEO of Alexion.
Alexion swapped 400,000 shares of stock - based on a recent 10-day average price - less than 3 percent of the company, and has 16.5 million shares outstanding, Bell said. Prolifaron, of San Diego, has been renamed Alexion Antibody Technologies Inc. (AAT) and is now a wholly owned subsidiary of Alexion.
Alexion's stock (NASDAQ:ALXN) closed Monday at $113.375, down $2.875. At that closing price the deal is valued at about $45.2 million.
Prolifaron was founded by Katherine Bowdish, Dennis Burton, Richard Lerner and Carlos Barbas in 1997. Lerner is president of The Scripps Research Institute and Burton and Barbas are professors at Scripps. Following the closure of the deal, the three men joined Alexion's scientific advisory board. Bowdish, formerly Prolifaron's president, will still head the company, but now report to Stephen Squinto, executive vice president and head of research at Alexion.
Following founding, Prolifaron received a $1.5 million initial seed round financing, said Bowdish, and then received a Small Business Innovative Research (SBIR) grant for hematopoietic stem cell factor discovery research in 1998. In February 1999, Prolifaron entered into a research and development agreement to identify drug candidates for Centocor Inc., a deal worth $6.5 million to Prolifaron. It followed that with another SBIR to develop humanized antibodies to arboviral vectors in conjunction with the Centers for Disease Control and Prevention, and is currently in a research and development agreement with SmithKline Beecham Pharmaceuticals to seek drug candidates.
Prolifaron has focused on the discovery and early stage development of antibody drug therapies through combinatorial antibody library development, proprietary selection technologies, cell-based biological screening, optimization and animal model development. Bell and Bowdish agree it was the drug discovery that interested Alexion, and the fact that Prolifaron comes from good stock.
"This is the antibody company that came out of Scripps," Bell said. "They have a tremendous amount of knowledge."
"What they saw in us is a strong group of discovery-based scientists," Bowdish said. "[Prolifaron] is a powerful team of about 20 extremely bright, extremely devoted people."
Alexion, of New Haven, Conn., currently has two C5 complement inhibitors, 5G1.1-SC and 5G1.1, in eight clinical development programs. Both products are aimed at interrupting the complement cascade at the C5 spot, so that the normal upstream disease-preventing functions of complement remain intact while production of the abnormal downstream disease-causing actions of complement are blocked.
5G1.1-SC is in a Phase IIb cardiopulmonary bypass efficacy trial and in two Phase II myocardial infarction efficacy trials. Its second product, 5G1.1, is in a Phase II efficacy trial for the treatment of chronic rheumatoid arthritis, a Phase II efficacy trial for the treatment of membranous nephritis and in Phase Ib pilot studies for treatment of psoriasis, dermatomyositis and pemphigoid.
With the acquisition of Prolifaron, Bell said Alexion's pipeline should grow, as Alexion can provide what Prolifaron lacked - development capability.
"We would expect over [the next year] we would bring one or two antibody products into the clinic," Bell said. "We have matched [our] antibody developing with their discovery," he said. "They have no antibody developing."
"[Alexion] has an unbelievably strong development program in house. I think they are ready to take advantage of the discovery programs we have and we are ready to take advantage of their development," Bowdish said. "It's a great marriage."