LONDON _ Novo Nordisk A/S, of Copenhagen, has agreed to takean equity stake in Edinburgh, Scotland-based PPL Therapeutics plcfor 3.3 million ($5.1 million) for approximately 9 percent of theincreased share capital in PPL Therapeutics.
The deal between the two companies includes an agreement tocollaborate on research and development. The Danish company alsohas an option to purchase a further 7 percent of the share capital ofPPL. The three-year option expires if PPL goes public. The latestdeal, the first equity stake in PPL by a pharmaceuticals company,values the company at 50 million ($80 million).
PPL has previously been financed by a number of venture capitalgroups. Before the latest injection of capital, PPL had raised 13million ($20 million).
PPL conducts research and development aimed at the application oftransgenic technology to produce recombinant human proteins in themilk of livestock. PPL was formed in 1987 to commercializeresearch conducted at the Institute of Animal Physiology andGenetics Research, now the Roslin Institute, in Edinburgh, funded bythe Agricultural and Food Research Council (AFRC).
The company's technology uses the regulatory region of the milkprotein gene (beta-lactoglobulin or BLG promoter) to switch on theproduction of human proteins in the mammary gland of lactatinganimals. The gland excretes the protein into the animal's milk,giving very high yields. In July 1994, PPL received U.S. patent No.5,322,775 covering its technology for the use of BLG promoter toproduce any protein in the milk of all species of livestock.
Under PPL's agreement with Novo, the Scottish company said that itwill be responsible for "transgenic production processes for selectedtarget proteins and for supplying part-purified materials for finalpurification for clinical trials and commercial sale."
"PPL is in the forefront with respect to this sophisticated productiontechnology," said Bruce Carter, executive vice president of healthcare discovery and development at Novo. "The collaborationagreement together with the equity investment gives Novo Nordiskaccess to a new potentially valuable production method for futureproducts."
Mike Rulis, a spokesman for Novo, told BioWorld Today that thecollaboration fits in well with a new company strategy focusing onmore collaboration with external partners.
Although PPL has a number of collaborative agreements, this is thefirst that involves a partner taking an equity stake.
In March 1993, PPL acquired TransPharm, of Blacksburg, Va.,through a share swap. That company was set up to exploittechnology developed at Virginia Polytechnic Institute.
Novo's (NYSE:NVO) stock closed Tuesday at $23, up 38 cents. n
-- Michael Kenward Special To BioWorld Today
(c) 1997 American Health Consultants. All rights reserved.