By Jim Shrine
Alkermes Inc. added to its drug-delivery capabilities through the acquisition of Advanced Inhalation Research Inc. (AIR) for stock currently valued at $114 million.
Privately held AIR, of Cambridge, Mass., is developing technology to deliver small molecules to the lung for respiratory diseases and to deliver proteins and peptides via the lung for systemic applications. The company has kept much of its research under wraps, and Alkermes intends to keep it there for the time being.
Alkermes, also of Cambridge, already had three broad delivery technologies. CEO Richard Pops said the purchase is in line with the company's strategy of acquiring, about every two years, technology that adds value and can be quickly partnered with pharmaceutical companies in multiple product areas.
"We've been watching the pulmonary space for the last couple of years, and were attracted to AIR because of the quality of its people and the value of their technology to begin with, and also the fact it's been endorsed by several sophisticated pharmaceutical companies as their partners," Pops told BioWorld Today.
AIR To Become Wholly Owned Subsidiary
AIR and its 30 employees will be a wholly owned subsidiary to Alkermes and its staff of 240. AIR received 3.18 million Alkermes shares (NASDAQ:ALKS), which closed Monday at $31, down 12.5 cents per share. The stock represents nearly 12 percent of Alkermes on a fully diluted basis. The deal was done as a tax-free pooling of interests, and all shares will be registered for resale.
The acquisition was valued at $89 million using the 30-day trading average of Alkermes. But the stock, trading around $10 as recently as September, has tripled in price since then on favorable clinical developments and recommendations from analysts.
Another 120,000 shares might be issued to cover employee stock options.
Pops said Alkermes wants to get the AIR technology under its control and get a better understanding of various development programs, before discussing the status of AIR's undisclosed partnerships. Details will be provided along with news of milestones, he said.
AIR created a buzz, Pops said, with a 1997 article in Science about the delivery of large particles into the deep lung. Conventional wisdom was that particles from 1 to 5 microns were needed, but AIR showed particles greater than 5 microns could be delivered, if they were low-density porous particles in which mass density was more important than diameter.
The AIR system uses a small delivery system; can deliver a wide range of doses of small and large molecules; and can provide local or systemic sustained-release delivery. In addition to its partnerships, AIR is developing certain off-patent compounds on its own.
"The technology is applicable to both small-molecule delivery for diseases like asthma, and for the delivery of proteins and peptides systemically via the lung," Pops said. "There are a number of companies developing pulmonary systems applied to one or the other. We were interested in finding one with applicability to both. Pulmonary delivery of small molecules is a proven opportunity."
Alkermes' three other areas of focus are the ProLease and Medisorb technologies, for the sustained release of injectable drugs; the Cereport technology (formerly called RMP-7), which is used to deliver drugs past the blood-brain barrier; and the RingCap and Dose Sipping (DST) technologies. RingCap and DST were licensed from Alza. RingCap is a controlled-release delivery technology. DST involves a way of formulating drugs to make it easier for those who have trouble swallowing or who need to take large quantities of drugs.
Genentech Inc., of South San Francisco, and Alkermes are using ProLease to deliver human growth hormone in a product called Nutropin Depot. A new drug application is expected to be filed with the FDA soon. Alkermes and Johnson & Johnson (J&J), of New Brunswick, N.J., have completed safety studies using ProLease to deliver the blood booster erythropoietin. One application of Medisorb is being developed with a J&J subsidiary in an undisclosed therapeutic area. A Phase III trial is expected to begin this year, Pops said.
Palo-Alto, Calif.-based Alza Corp. has an option until next year to gain commercialization rights for Cereport under a deal struck in October 1997. Cereport is being studied in two Phase II trials for brain-tumor indications. n