By Randall Osborne
Maneuvering for stronger position in the field of antisense drugs, Inex Pharmaceuticals Corp. has acquired Lynx Therapeutics Inc.'s products, patents and manufacturing facilities for US$3 million in cash and 1.2 million shares of Inex common shares.
Based on Thursday's trading price for Inex stock (TSE:IEX), which was $5.50 (US$3.78), the shares are worth US$4.54 million, bringing the total value of the deal to US$7.54 million.
Inex, of Vancouver, British Columbia, focuses on gene-based drugs and has developed what it calls Transmembrane Carrier Systems (TCS) to deliver them past cell membranes. Last month, Inex was granted a U.S. patent for a component of TCS used for systemic gene drug delivery.
Lynx, of Hayward, Calif., has been developing LR-3280, a synthetic oligonucleotide designed to interfere with the expression of a gene believed to play a role in the scarring, or restenosis, that follows angioplasty and similar procedures.
The company also has several anticancer drugs in development, said James Miller, president and CEO of Inex, and those are included in the deal.
"The acquisition is really [of] three lead drug candidates," Miller said.
Expected to close within 30 days, the buyout of Lynx's antisense portfolio "complements our delivery technology and provides a clear product focus for the application of it," he added.
Partners in the study of LR-3280, which is currently in Phase II trials, are Schwarz Pharma AG, of Monheim, Germany, and Tanabe Seiyaku Co. Ltd., of Osaka, Japan. Inex, in taking over those partnerships, could get milestone payments of up to US$8.5 million, plus revenue sharing. In both cases, the partner pays for clinical development, marketing and distribution. (See BioWorld Today, July 11, 1996, p. 1, and Oct. 2, 1996, p. 1.)
Edward Albini, CFO of Lynx, said seven of the company's 75 employees will move to Inex's U.S. subsidiary, Inex U.S.A., and will be based at Inex's manufacturing facility in Hayward.
"That's 10 percent of the people, and in terms of our focus and assets, it's far less than that," Albini said.
Formed in 1992, Lynx's primary focus is in genomics. The company developed technologies for massively parallel cloning and sequencing, which it uses for the discovery and study of disease genes.
From the Schwarz and Tanabe collaborations, Lynx will keep the next two milestones, if earned. Those could total $7 million. "We're also picking up half the gross profits from any sales that would result from LR-3280 and would be payable to Inex," Albini said.
The anticancer drugs included in the deal, in earlier stages of development, are based on proprietary rights to antisense molecules targeted against the cancer-related genes c-myc, c-myb and insulin-like growth factor (IGF)-1R.
Antisense drugs work by regulating the functions of genes within cells, blocking the messenger — or "sense" — RNA from directing the cell to manufacture specific proteins.
With TCS, Inex believes it has the delivery method that will put the drugs most efficiently where they need to be.
"You can use it with any of them," Miller said, adding that TCS is particularly effective with systemic problems, inflammation and cancer.
Used with the anticancer drug vincristine, TCS is being evaluated in Phase II trials for patients with metastatic colorectal cancer. The product is known as Onco TCS, and is being developed by Inex alone.
Inex has ongoing collaborations with Copernicus Gene Systems Inc., of Cleveland, to evaluate together that company's DNA compaction method and Inex's delivery technology; with Ribozyme Pharmaceuticals Inc., of Boulder, Colo., to study lipid-based delivery systems for ribozymes; and with Chromos Molecular Systems Inc., of Vancouver, to study delivery of mammalian artificial chromosomes to cell interiors, using Inex's technology.
A fourth partnership with Isis Pharmaceuticals Inc., of Carlsbad, Calif., is to develop and commercialize inflammatory treatment applications of antisense therapy.
Inex, along with its antisense drugs, is developing DNA molecules called plasmid cassettes to optimize gene expression and protein production for gene therapy. The cassettes, containing the therapeutic gene, stimulate and regulate the expression of therapeutic proteins inside the cell. Cassette elements can determine short-term or long-term gene expression, and switch gene expression on and off within the cell.
As of Sept. 30, 1997, Inex had $30.3 million cash, with a net loss of $2.34 million for the third quarter. *