By Randall Osborne
Elan Corp. has gobbled up another company, this time agreeing to pay about $150 million in cash and stock warrants for NanoSystems LLC, a multi-partnered drug delivery firm focused on poorly water-soluble drugs.
"It gives us an addition platform," said Thomas Lynch, vice president and chief financial officer of Dublin, Ireland-based Elan, which expects to close the deal in the fourth quarter of this year, pending clearance by U.S. and Irish regulatory authorities. "Around 40 percent to one-half of new chemical entities are insoluble, and [NanoSystems] has a gilt-edged client list."
Elan intends to pay $137 million in cash for King of Prussia, Pa.-based NanoSystems, a subsidiary of the Eastman Kodak Co., with the remainder to be paid in warrants to purchase ordinary shares in Elan. All corporate approvals for the transaction have been obtained.
NanoSystems converts drug ingredients to tiny crystals, which are more stable and bioavailable, yet physically identical to classical dosage forms. The process works with a wide range of molecules that are poorly water soluble. NanoCrystals, as they are called, are less than 400 nanometers in diameter.
Last month, the company entered a $30 million license agreement with Whitehouse Station, N.J.-based Merck & Co. to improve delivery of an unnamed Merck drug. (See BioWorld Today, Aug. 17, 1998, p. 1.)
NanoSystems' other collaborators include Wyeth-Ayerst Laboratories, a division of Madison, N.J.-based American Home Products Corp.; Warner-Lambert Co., of Morris Plains, N.J.; and Janssen Pharmaceutica NV, a wholly owned subsidiary of Johnson & Johnson, of New Brunswick, N.J.
With Wyeth-Ayerst, NanoSystems is developing a formulation of Rapamune, an immunosuppressant.
"Kodak initially looked at taking [NanoSystems] public through a spin-out, and then decided to sell it," Lynch told BioWorld Today, adding that the deal has been in the works since late last year.
"This company has probably the best technology in this particular field, and we'll use it for our own internal developments [as well]," Lynch said. *