By Matthew Willett
Texas Biotechnology Corp. (TBC) said initial financing for its majority-owned subsidiary Revotar Biopharmaceuticals AG is expected to net the Berlin-Brandenburg, Germany-based small-molecule discovery company up to DM 30 million (US$14.2 million).
Revotar has already raised a third of that amount in equity, and plans to raise additional capital through German government grants and loans. TBC said equity investment by German venture capitalists bmp AG and Mediport AG will provide the other DM 20 million.
TBC President and CEO David McWilliams said Revotar will use the financing for drugs in its development pipeline.
"Revotar will use this money to fund the clinical development of [a] selectin antagonist in asthma and psoriasis, as well as to initiate a research effort in small-market drugs aimed at inflammation targets," McWilliams said.
Aqua Partners LLC, of New York, acted as financial advisors for the transaction.
"I think it's a very good deal for us," McWilliams added. "First of all, it satisfies an important thrust in that it gives us a base of operations in Europe, allowing us exposure and interaction with the companies out there that we would not have if we were just operating out of a base in the U.S. From an operations point of view it allows us, with one development candidate, to get it funded with no dilution to our shareholders and retaining a substantial part of the upside. It's a base of operations, and it allows us to leverage our research operations here."
TBC obtained 55.2 percent of Revotar in exchange for TBC technology. TBC retains North American territorial rights to Revotar's lead product, the selectin antagonist TBC1269, but Revotar has European marketing rights for the drug, which is now in Phase II clinical trials for asthma.
McWilliams said the next step for the German company is a public offering. "The capital market is very good here. We'd like to take Revotar public at some point.
"I think our partners would like to do that as soon as we could," he said. "From a practical point of view, what we need is good clinical data on the selectin antagonist. Once we have that, it will have generated enough value to take it public, and I think that should be within 18 to 24 months."
TBC, based in Houston, focuses on discovery and development of drugs for the treatment of thrombosis, pulmonary hypertension, chronic heart failure, systemic hypertension, asthma and rheumatoid arthritis.
Its lead drug, argatroban, a synthetic small-molecule inhibitor of the blood-clotting enzyme thrombin, recently received FDA approval, netting TBC a $7 million milestone payment from partner SmithKline Beecham plc, of London. (See BioWorld Today, July 3, 2000, p. 1.)
McWilliams said the company plans to begin marketing the drug in September.