Zila Inc. hopes to gain technology through its acquisition ofOxycal Inc. that will "dramatically" increase the speed of drugabsorption. Zila announced the signing of a letter of intent forthe purchase on Monday.
Zila also has an abbreviated new drug application (ANDA)pending at FDA for OraScan, the first diagnostic for oral cancer.
Zila's president, Joseph Hines, told BioWorld that Oxycal'spatented absorption technology has been shown to improvebioavailability in more than 350 drugs and compounds. Forexample, he noted that "baby aspirin could be cut down to one-third the current dose" and achieve the same effect. Whendrugs go off patent, Hines said new products could be createdwith this technology, which Zila (NASDAQ:ZILA) plans to licenseto other companies.
Oxycal, a private company based in Prescott, Ariz., markets oneproduct, Ester-C, through its subsidiary, Inter-Cal Corp. Thevitamin C formulation enters the blood stream more rapidly,stays in the system longer and is excreted at lower levels thanordinary vitamin C, Zila said.
Zila is purchasing Oxycal with common stock and warrants. Theterms of the transaction were not disclosed. Zila said that withOxycal's reported after-tax earnings for fiscal 1993 of$894,816, on a trailing basis, the acquisition would more thandouble Zila's Fiscal '93 earnings per share. Oxycal estimatedrevenues for its current fiscal year at more than $10 million.
Zila subsidiary Zila Pharmaceuticals of Phoenix, Ariz., marketsover-the-counter oral health-care products, including Zilactinfor canker sores; PeriGel, a dentifrice for teeth and gums; andDermaFlex, a topical anesthetic gel. The company was foundedin 1980 by a doctor who originally developed Zilactin for thetreatment of genital herpes.
Zila's most important product, its oral cancer diagnosticOraScan, was approved in Canada in March and in Australia inAugust. In addition to the ANDA pending at FDA, an applicationis pending before the Medicines Control Agency in the UnitedKingdom.
OraScan consists of the metachromatic stain toluidine blue. Zilaexplained that the coloring agent fills the interstitial spaces ofabnormal tissue. Since the agent cannot readily lodge amonghealthy cells, which have tight junctions, it is washed awayfrom those areas by the post-rinse solution. This leaves areasof unhealthy cells clearly defined by a brilliant, royal bluecoloration. Zila said toluidine blue has been usedtherapeutically as an intravenous agent as early as 1949 andhas been used by some dentists to detect oral cancers since1964.
Hines said there is no question about the stain's efficacy, but ithas never been available in a safe, reliable, stable form. It iscurrently sold as a concentrated powder form that has to bemixed with each use and quickly loses potency. Hines said Zilahas developed and patented a system that keeps the productstable for at least four years. Zila also licensed a protocol patentfrom the National Institutes of Health about two years ago.
In addition, the company has a patent on the OraScan kit itself,which includes toluidine blue and the pre- and post-rinse 1percent acetic solution.
In a study of 102 patients at risk for oral cancer in Sri Lankaand Pakistan, the OraScan kit recognized clinically apparentcarcinomas with a 100 percent sensitivity; no false negativeresults were seen. The trial, conducted by Newell Johnson ofthe Royal College of Surgeons, Kings College School of Medicine& Dentistry in the U.K., also found that OraScan detected 12lesions that had not been found by physicians, five of whichdemonstrated microscopic dysplasia. Zila said OraScan's falsepositive rate is 8.5 percent.
Zila announced in October that it purchased equipment andcontracted for the manufacture of toluidine blue based ondiscussions with FDA. The company also plans to use Oxycal'smanufacturing plant to produce several of its products,including OraScan.
-- Brenda Sandburg News Editor
(c) 1997 American Health Consultants. All rights reserved.