Aquila Takes Over VacTex In Stock Swap Worth $8M
By Randall Osborne
To join its adjuvant technology with a system that uses lipid antigen immune system activators, Aquila Biopharmaceuticals Inc. acquired all outstanding shares of VacTex Inc. in a stock swap valued at $8.2 million.
"The synergy is very good," said Alison Taunton Rigby, president and CEO of Worcester, Mass.-based Aquila.
Aquila will acquire VacTex's shares in a tax-free exchange of 1.15 million shares of newly issued Aquila common stock and a note, redeemable after April 13, 1999, for $1.3 million plus interest accrued at 7 percent. The deal was disclosed late Tuesday.
With 6.98 million shares outstanding after the acquisition, Aquila will record a charge of about $8.2 million in the second quarter of this year.
Privately held VacTex, of Cambridge, Mass., was formed in 1996 to study a class of molecules called CD1 proteins. The company believes modulating the CD1 antigen presentation pathway may work against infectious diseases, cancer and autoimmune disorders.
Aquila's current programs are based on combining Stimulon adjuvants with antigens expressed on major histocompatibility complex (MHC) classes I and II to bring about an immune response.
"Those are the classic pathways everybody is fooling around with," Rigby said.
Research suggests CD1 offers a binding groove similar to MHC's, but better suited to lipids. An earlier collaboration by Aquila targeting tuberculosis with VacTex has shown that Aquila's adjuvant in the Stimulon group, QS-21, can enhance the response to lipid antigens.
Acquisition To Trigger No Major Changes
Gerald Beltz, senior vice president of research and development for Aquila, said the acquisition "doesn't mean we'll change any of the things we're doing, other than the additive part."
The tuberculosis program will continue, he said.
"It's going to be long and difficult, but it's pretty well along, and there's a lot of medical need for advances," Beltz said.
The Stimulon adjuvants are made with purified saponins isolated from the bark of the tropical Quillaja saponaria tree, which is found in South America. Included in the Stimulon portfolio are Quilimmune-P in Phase II trials to prevent pneumococcal infections in the elderly; Quilimmune-M, a malaria vaccine, in Phase I trials; and Quilvax-M, to control bovine mastitis, which is about to enter final licensing trials.
Aquila's drug for preventing feline leukemia virus infection is marketed in Europe under the trade name Leucogen, and in the U.S. as GenetiVac.
With VacTex's technology, Aquila will target diseases that are intracellular — not viral, but parasitic or bacterial, Beltz said, since viruses typically don't have lipid components as part of their make-up.
"Our initial look has generated a lot of interest in Chlamydia," Beltz told BioWorld Today. The sexually transmitted disease is "an important pathogen, medically," he added. "There's a lot of exposure, and it results in a significant amount of reduced fertility problems."
Rigby said MHC and CD1 methods could be used together.
"The immune system is very sophisticated," she said. "In the long run, you'll see combinations of all these technologies."
Aquila's corporate partners include SmithKline Beecham plc, of London; Pasteur Merieux Connaught, of Lyon, France; American Home Products, of Madison, N.J.; Progenics Pharmaceuticals Inc., of Tarrytown, N.Y.; Nabi, of Boca Raton, Fla.; and VaxGen Inc., created by South San Francisco-based Genentech Inc. to continue the development and commercialization of gp120, Genentech's vaccine against HIV.
As of Dec. 31, 1997, Aquila had $15.9 million in cash and marketable securities, with a net income of $925,516 for the year. The company's stock (NASDAQ:AQLA) closed Tuesday at $5, down $0.687. *