TORONTO - Against the backdrop last week of Connections 2000 - a meeting that examined financing and strategic alliance issues in the biopharmaceutical industry - two Canadian biotech companies, Apoptogen Inc. and Exogen Neurosciences Inc., said they would be merging to form Aegera Therapeutics Inc.

Michael Atkin, president and CEO of Montreal-based Exogen and Aegera's new CEO, told BioWorld International that the new corporation will be combining the skills and intellectual property (IP) of the two companies to focus on signal transduction and apoptosis. The primary therapeutic targets for the technology will be in neurodegenerative diseases involving the inhibition of inappropriate, damaging apoptosis in the central and peripheral nervous systems.

The merged company has proven target discovery capabilities derived from population genetics and functional genomics, drug discovery systems in molecular and cellular screens and drug development capabilities through medicinal chemistry and valid disease models. The IP portfolio relates to signaling pathways that regulate neuronal cell survival, cellular apoptosis and neural stem cell isolation, differentiation and growth.

John Gillard, CEO of Ottawa, Ontario-based Apoptogen and executive vice president and chief scientific officer of Aegera, said that prior to the merger each company lacked essential elements in its drug development program to achieve the necessary critical mass and scale to move forward quickly. "We were barely entering lead identification from Apoptogen's genetic discoveries of a novel family of apoptotic control genes," known collectively as Inhibitors of Apoptosis Proteins (IAPs), that are involved in neurodegeneration, cancer and stroke, he said.

For its part, Exogen had developed a technology platform of signal transduction and functional genetics to identify proteins implicated in the life, death and growth of neurons. Using a library of more than 70 recombinant adenoviruses that affect neuronal signaling, the company had implemented high-throughput neuronal assays targeted to specific signaling pathways. This technology already has identified six leads, some of which were found to be highly selective activators of the Trk neurotrophic receptor.

Combining the assets from both companies has created accelerated growth prospects in a common therapeutic area, Atkin said. The key to therapeutic development in this field involves inhibiting death signals, or enhancing survival and growth signals. Aegera has demonstrated the neuroprotective effects of maintaining IAP expression in neurons in in vivo settings of disease. In addition, the company has novel compounds that selectively enhance propagation of survival signals (from Trk) and overcome death signals (from P75).

The company's neuronal molecular death screen will be complemented by biochemical assays for the discovery of inhibitors of key signaling kinases and phosphatases that occur at nodal points in death signaling pathways.

Atkin believes the merger competitively positions Aegera in the burgeoning neuroscience therapeutic market. Aegera's focus will be on the acute care of spinal cord injury and chronic diseases such as Huntington's, Parkinson's and Alzheimer's, as well as peripheral neuropathies. Over the next 12 to 18 months Aegera intends to select at least one lead drug candidate from existing leads that demonstrates superior activity in acute models of neurodegenerative disease.

Aegera's operations will be centralized in Montreal. A 12,000-square-foot facility has been leased from the biotech company RTP Pharma Inc., which itself will be moving to larger premises in Montreal. In addition, an ongoing oncology program will be developed through a wholly owned subsidiary that will be established in Ottawa. Under development is a proprietary therapeutic approach to cancer, based on the restoration of normal apoptotic mechanisms to cancer cells by inhibiting the overexpression of one of the IAP genes. Aegera has significant cash reserves and pending R&D tax refunds, and anticipates its next funding round will be in the fourth quarter.