DNX Inc., a developer of transgenic animals, has acquired abiological testing company in a strategy to build a $100 millionbusiness that uses animal models to develop humantherapeutics.

The company announced last week that it acquired PharmakonResearch International, a 20-year-old provider ofpharmacological, pharmacokinetic and toxicological testingservices. Terms were not disclosed.

Paul Schmitt, DNX president and chief executive, said thecompanyLs Biodigm animal models will have more value whenintegrated into a full-service testing business. He estimatedthat revenues for the combined companies could grow to $100million by the year 2000. DNX earned more than $1 million incontract fees in 1990 and expects similar fees for this year.Pharmakon's current sales are running at about $7 million to$10 million, said Schmitt.

DNX is developing transgenic mice as animal models fordiabetes, cholesterol metabolism, central nervous systemdisorders, and hepatitis B and genetic toxicology. Pharmakon isevaluating the mice by running known drugs through them todevelop baseline data, said Schmitt.

A longer-term goal is to develop transgenic swine as a sourceof human hemoglobin. Further in the future are transgenicswine that will serve as a source of xenografts for organtransplants.

As a result of the acquisition, DNX will create two divisions:DNX Biopharm for its transgenic animal technology and DNXPharmakon. Pharmakon will remain in its Waverly, Pa., locationas a subsidiary of DNX, which is headquartered in Princeton,N.J.

DNX, which is privately held, was formed by the March 1988merger of Embryogen Inc. of Athens, Ohio, and Transgenics Inc.of Princeton. The company is wrapping up a round of venturefinancing, said Schmitt.

DNX raised $8.25 million in one previous round. Currentinvestors include Venrock Associates, Domaine Partners,Graylock Capital L.P. and Fidelity Capital. -- Karen Bernstein

(c) 1997 American Health Consultants. All rights reserved.