Biomatrix Inc. and Syntex Pharmaceuticals International Ltd. signed anagreement that brings $7 million to Biomatrix in exchange for grantingSyntex certain European marketing rights for Synvisc, a treatment forosteoarthritis.The companies already had signed a deal in November that gaveSyntex marketing exclusivity for Synvisc in France, Scandinavia, GreatBritain and Ireland. This agreement provides Biomatrix withsignificantly more up-front money, and expands Syntex's marketingrights to Germany, Spain, Belgium, the Netherlands, Luxembourg,Switzerland and South Africa.Syntex purchased 355,000 newly issued shares of Biomatrix(NASDAQ:BIOX) stock at $5.63 per share, for $2 million. And $5million was paid as a licensing fee. Biomatrix, of Ridgefield, N.J., alsowill get $1 million when product approval is filed for in France, and$1.3 million paid proportionately as approvals come in from differentcountries, Endre Balazs, CEO and chief scientific officer of Biomatrix,told BioWorld.Biomatrix stock gained 23 percent on Monday's announcement,closing up $1.13 at $6.13 per share. Syntex (NYSE: SYN), which nowholds about 3.8 percent of Biomatrix's 9.2 million outstanding shares,was unchanged Monday at $23.13.The previous agreement involved an up-front payment of $1.2 millionand an additional $4.5 million as various product approvals areattained. In the new deal, Syntex, of Palo Alto, Calif., is restricted fromselling Biomatrix stock in the first year, and then can't sell more thanone-third of it at a time in subsequent years, Balazs said.Synvisc is a chemically modified version of the naturally occurringhyaluronan, which is found in most body tissue and some bacterialcapsules. It already is approved in Canada, and in May Biomatrix fileda premarket approval application in the U.S. Regulatory submissionsare pending in Sweden and Great Britain. Biomatrix is marketing theproduct itself in Canada, and hasn't decided how it will handle U.S.marketing, Balazs said.It is injected into the affected arthritic joint to supplement and restorethe lubricating and protecting properties of synovial fluid, which iscompromised due to osteoarthritis. The treatment alleviates pain andrestores joint function, Biomatrix said.Since it acts as a physical entity, it's classified as a device. Standardtherapy involves a series of three injections once per week."This was a very good deal for us _ and them," Balazs said. "We get alicensing fee and up-front payment and, in Syntex, a very gooddistributor. This provides us enough cash for our operation for severalyears to come."Syntex already is in the arthritis market with Naprosyn, a nonsteroidalanti-inflammatory that's been on the market since 1972. The companyhad 1993 worldwide sales of $927 million for Naprosyn and Anaprox,a related compound, Linda Thomas, media relations manager forSyntex, told BioWorld."Syntex is in the mode of looking at acquisitions, licensing agreementsand joint ventures to increase penetration throughout the world in ourcore areas," Thomas said. "We have a very strong franchise amongphysicians in the arthritis pain-relief area, both in the U.S. and inEurope." n
-- Jim Shrine
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