Celtrix Laboratories Inc. announced Wednesday that it hassigned a definitive agreement to merge with privately heldBioGrowth Inc. in a deal valued at about $14.5 million.
The companies, which are both developing cell-regulatingproteins, will merge through an exchange of stock. Alloutstanding BioGrowth common and preferred shares will beexchanged for 950,000 newly issued shares of Celtrix commonstock, or about 16 percent of the combined company. After themerger, the combined company, which will be named CeltrixPharmaceuticals Inc., will have 5.8 million shares outstanding.
Celtrix stock (NASDAQ:CTRX) closed Wednesday at $15.25, up50 cents.
Celtrix has focused on transforming growth factor (TGF) beta,and BioGrowth is working on insulin-like growth factors (IGFs)and their naturally occurring binding proteins. BPs give IGF alonger half-life and prevent it from causing hypoglycemicshock.
Both compounds stimulate connective tissue growth, but IGFalso has insulin-like and growth hormone-like capabilities.TGF beta is a potent anti-inflammatory and, except forconnective tissue cells, inhibits most other cells. Its abilityto inhibit T cells makes it a potential treatment for multiplesclerosis. It also has anti-tumor potential.
Celtrix will immediately bring IGF-BP3 into its osteoporosisdevelopment program and examine the compound together withits TGF beta. "We will make a decision on whether to go intothe clinic with one or both," Bruce Pharriss, Celtrix's chairmanand chief executive officer, told BioWorld.
Celtrix is conducting Phase I/II trials of TGF beta in non-healing dermal ulcers. It will also evaluate IGF-BP3 in woundsin animals. Celtrix is also running Phase II trials of TGF betato repair macular holes, a form of detached retinas.
Genentech Inc. and a Chiron Corp./Ciba-Geigy collaborationhave IGF without binding protein in clinical trials, saidPharriss. Pfizer, in collaboration with Oncogene Science Inc.,and Ciba-Geigy have TGF beta in preclinical development.
The majority of Palo Alto, Calif.-based Celtrix's managementteam will continue in their current roles. Edward Lanphier II,president and CEO of Richmond, Calif.-based BioGrowth, willbecome senior vice president of business development andmarketing. No employees of either company are expected to bedisplaced.
The deal is expected to be completed in December, subject toapproval of BioGrowth stockholders and other conditions. Thecompany will be located at new facilities being built in SantaClara, Calif.
-- Karen Bernstein BioWorld Staff
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