VIMRx Pharmaceuticals Inc. has bought a controlling interest inInnovir Laboratories Inc., with the goal of combining the companies'technologies in the field of catalytic oligonucleotides.
To purchase 66 percent of the company, VIMRx will provide Innovirwith $7 million of operating capital and a commitment for anadditional $2 million.
The move will bring together VIMRx's Rilon technology andInnovir's External Guide Sequence technology, both of which seek tocontrol disease-triggering flaws in genes.
"We had a number of alternatives," Allen Goldberg, president andCEO of Innovir, told BioWorld Today, "but it made sense to joinforces because it gives us the option to use either of two syntheticoligonucleotide technologies, which we have named `oligozymes.'"
Each company's technology involves a different class of catalyticallyactive oligomers that have shown an ability to inactivate certain RNA"messenger" molecules that direct cells to produce illness-causingproteins.
In May, VIMRx acquired Ribonetics GmbH, of Gottingen, Germanyfor $1.5 million in cash and warrants for up to 500,000 shares. Thisacquisition gave to VIMRx Ribonetics' Rilon Technology, saidDavid Jackson, chief scientific officer of VIMRx, and with it "astrong position in the field of catalytically active oligomersmolecules."
"You want to be able to destroy only a very specific class ofmessenger RNA that is associated with the disease you are trying toaffect," Jackson said. The catalytic oligonucleotide associates onlywith the targeted messenger RNA and then it acts like a pair ofmolecular scissors to cut and destroy the specific RNA molecules.
Innovir's technology, External Guide Sequences or EGS, are shortpieces of chemically modified RNA that can direct a cellular enzymetermed Ribonuclease P to cut and thereby inactivate any messengerRNA molecule in a highly selective manner.
Sidney Altman, of Yale University, was awarded the Nobel Prize inchemistry in 1989 for the discovery that the catalytic component ofRnase P is an RNA molecule. Altman currently is on the scientificadvisory board at Innovir, which is based in New York, and one ofthe co-founders of the company.
EGS, Innophor Double Whammy
Innovir, said Goldberg, has discovered and patented the use ofInnoPhor, a proprietary oligozyme delivery agent that greatlyenhances the delivery of oligozymes to a wide variety of cell types.InnoPhor, he said, also has been demonstrated to enhancesubstantially the delivery of an EGS oligozyme directed against thehepatitis B virus to liver hepatocytes, the principal site of HBVinfections, when administered to mice by intravenous injection.
"There are an outstanding group of scientists at Innovir," Jacksonsaid, "who have made substantial progress in developing EGStechnology for a real therapeutic application."
"They have results in an animal model," he continued, "that showthat the EGS technology combined with InnoPhor gives veryimpressive biological activity for hepatitis B."
In September, The Aires Funds, a Cayman Island Trust, and the AiresDomestic Fund, invested $2 million in Innovir in exchange for 4million shares of newly issued common stock and 4 million Class CWarrants exercisable at $.50 each.
Innovir issued to The Aires Funds an option to purchase 2 millionshares of common stock and 2 million Class C Warrants exercisableat $.50 each, for a total purchase price of $1 million.
Under the new agreement, The Aires Funds will exercise warrants topurchase an additional 6 million shares, providing $3 million in cashto Innovir. VIMRx will purchase 9.5 million shares of Innovir stockfrom the Aires Funds for $12.35 million of VIMRx stock, valued atthe average trading price of VIMRx shares between Nov. 15, 1996and Jan. 15, 1997, but not to exceed $4.50 per share.
Also, VIMRx will exchange its 100 percent ownership of its Rilonsubsidiary, VIMRx Holdings Ltd., valued at $13 million, includingcash of $4 million, for 8.7 million shares of Innovir stock valued at$1.50 each, plus five-year warrants to purchase an additional 2million shares of Innovir stock.
VIMRx, of Wilmington, Del., has the rights to hypericin, an aromaticpolycyclic dione found naturally in the plant Saint-John's wort.Synthetic hypericin is called VIMRxyn and Phase I trials are beingheld in Thailand to identify dosage for future HIV/AIDS research.
In December, VIMRx will begin a two-month Phase I/II trial todetermine VIMRxyn's effectiveness in reducing the viral load inpatients suffering from infectious hepatitis C. A Phase I/II trial beganin October to determine the safety and effectiveness of the compoundin treating patients with malignant brain tumors.
The combined companies will have approximately 55 employees,most of whom will be in research and development.
VIMRx, as of Sept. 30, had a cash position of approximately $50million.
VIMRx's stock (NASDAQ:VMRX) closed Friday at $1, up $0.188.Innovir's stock (NASDAQ:INVR) closed Friday at $2.875, up$0.219. n
(c) 1997 American Health Consultants. All rights reserved.