By Karen Pihl-Carey
Germany-based GPC AG acquired Mitotix Inc. in an all-share transaction, creating a company that can more rapidly move from gene discovery to drug development.
GPC Biotech AG will be headquartered in Munich, with a GPC Biotech Inc. subsidiary at Mitotix's offices in Cambridge, Mass., and Princeton, N.J.
In a separate deal, another Germany-based company acquired Small Molecule Therapeutics Inc. (SMT), of Princeton. Morphochem AG, also of Munich, assumed 100 percent of SMT's shares in a transaction of cash and Morphochem stock.
The GPC/Mitotix transaction is expected to close by the end of this month. Neither privately held company would release further financial terms. The combined value of the company, however, was estimated at more than $100 million.
"The combination of these two companies, our drug discovery technologies together with GPC's genomics technologies, provides a new company that can do drug discovery from targeted identification to the clinic. And we think that's truly unique," said Tom Needham, vice president of business development for GPC Biotech, and formerly for Mitotix.
The current CEO of GPC AG, Bernd Seizinger, will head the new company, while Mitotix CEO Muzammil Mansuri will serve as executive vice president of GPC Biotech AG and chief operating officer of GPC Biotech Inc. in Cambridge.
A friendship lasting more than 10 years between the two men is what initially drew the companies together. Seizinger and Mansuri had worked together years ago at Bristol-Myers Squibb Co., of New York.
Seizinger said the acquisition is a logical step for GPC's strategy, allowing the company access to expertise in cell cycle biology and technologies that complement its own technologies.
"Now we will be present on both sides of the Atlantic, and we can offer industry partners an even more attractive 'one-stop shop' from functional genomics to proteomics, high-throughput screening, animal models and pharmacology," he said.
Needham told BioWorld Today that Mitotix was approached by both public and private companies in Europe and the U.S. wanting to merge or acquire Mitotix. The marriage with GPC, he said, "provided the best near-term and long-term opportunity for investors."
In the near-term, GPC Biotech expects to hold a financing round in the second half of this year. It then will turn to the German capital markets, going public on Neuer Markt, Germany's equivalent to the Nasdaq National Market.
"Then, we would follow that with a Nasdaq listing 12 to 18 months later as the company matured and developed," Needham said.
Seizinger said the company needs to become a leader in Europe before going public in the U.S. "Clearly, we want to become the prominent genomics-driven drug discovery company in Europe, similar to Millennium [Pharmaceuticals Inc., also of Cambridge], which already achieved the full integration of genomics and drug discovery," he said.
The merged company will have 13 pharmaceutical and biotechnology alliances in the U.S. and Europe, along with advanced drug-discovery programs in oncology, infectious diseases and immunology. The new company will have a broad intellectual property position with more than 125 issued patents and pending patent applications.
Mitotix has two late-stage preclinical programs it is bringing to GPC Biotech, one with DuPont Pharmaceutical Co., of Wilmington, Del., and another with Cell Genesys Inc., of Foster City, Calif. The program with DuPont, initiated in 1995, is a $55 million collaboration to develop anticancer drugs. The two companies have worked to develop small-molecule cyclin-dependent kinase (CDK) inhibitors for cancer. The second program with Cell Genesys was initiated in 1998. It gave Cell Genesys exclusive rights to use three cell cycle inhibitory genes - p16, p27 and the p27-16 fusion gene - to develop products against cancer and restenosis. (See BioWorld Today, Dec. 8, 1995, p. 1; and April 15, 1998, p. 1.)
GPC Biotech also will have three other cancer research and development programs aimed at developing new classes of anticancer targets, novel angiogenesis inhibitors and monoclonal antibodies that induce tumor-selective cell death. And it will have two antifungal research programs and two programs to develop drugs against autoimmune diseases.
Some of these products are expected to enter the clinic within the next one to two years.
About 140 people work at the combined company, and GPC Biotech does not expect to reduce the staff.
Morphochem Gains Access To Screening Assays
Morphochem's acquisition of SMT enables the Munich-based company to use SMT's expertise in creating biological screening assays for therapeutically validated or novel protein-protein interaction drug targets against chemical compound libraries. Morphochem has a core expertise in creating diverse compound libraries using multi-component chemistries. SMT will become a fully owned U.S. subsidiary to be called Morphochem Inc.
No terms of the acquisition were disclosed.
"Through the acquisition, we have established a U.S. base in a very short time, and we have been able to add to our group a very experienced team of biologists," said Thomas Loeser, chief financial officer of Morphochem. "To find such people one by one would have cost months or even years. Besides, during the last quarter there was an excellent opportunity window for a U.S. acquisition." n
Editor's Note: BioWorld International correspondent Ludger Wess contributed to this article.