XTL Biopharmaceuticals Ltd. (LSE: XTL ; TASE: XTL) has announced the closing of the license and asset purchase agreement signed with US company VivoQuest Inc.in August.
The agreement gives XTLbio an exclusive license to VivoQuest’s intellectual property and technology, including HCV compounds and VivoQuest’s proprietary compound library.
Industry sources say this is the first time an Israeli biotechnology company has bought a US company.
XTLbio shares closed at $10.80 yesterday.
XTLbio made an up-front payment of approximately $1.4 million on closing the deal, by issuing to VivoQuest some 1.3 million XTLbio ordinary shares. All other amounts to be paid to VivoQuest in connection with this transaction, amounting to $30 million, will be subject to the achievement of certain milestones relating to successful development and commercialization of the VivoQuest assets. The payments will be in shares or cash, at XTLbio's discretion. About $25 million will be paid when approval is granted for a drug and sales begin.
VivoQuest’s US-based R&D team has joined XTLbio. The team specializes in a breakthrough small molecule chemistry technology known as Diversity Oriented Synthesis (DOS).
According to industry sources, there is only one company apart from VivoQuest that can work with the DOS platform, namely US company Infinity Pharmaceuticals, which has signed seven substantial deals with giant drug companies over the past twelve months, among them Novartis and Amgen.
Other companies besides XTLbio developing treatments for Hepatitis C include Vertex Pharmaceuticals, which recently announced the completion of Phase I trials in the development of its drug, and is traded at a market cap of $1.8 billion, and Idenix Pharmaceuticals, currently involved in Phase I trials, and traded at a $1.2 billion market cap.
Two members of VivoQuest's Scientific Advisory Board, Dr. David Ho and Dr. Charles Rice, have agreed to serve as scientific advisors to XTLbio. Dr. Ho, a scientific co-founder of VivoQuest, is Scientific Director and CEO of the Aaron Diamond AIDS Research Center and was named Time Magazine's "Man of the Year" in 1996 for his work in antiviral research. Dr. Rice is Head of the Laboratory of Virology and Infectious Diseases at Rockefeller University.
XTLbio chairman Michael Weiss said, “We are delighted to bring VivoQuest’s world-class chemistry team on board, and to have Dr. Ho and Dr. Rice join XTLbio as scientific advisors. With the conclusion of the VivoQuest agreements, XTLbio is well positioned to aggressively advance VivoQuest’s HCV program. This program has already identified a number of candidates that pre-clinically compare very favorably with the most promising anti-HCV compounds in clinical development today."
The company's VP of business development Ram Waisbourd, who led the XTLbio transaction team, said, "We have minimized the cost and risk to the XTLbio shareholders by deferring all but the up-front payment of a little over $1 million until successful milestones are achieved in the development and commercialization of the VivoQuest program.”
According to an industry source, more than $30 million has so far been invested in VivoQuest's development activity. Another source added that there was a high degree of synergy between the two companies, thanks to their complementary capabilities. While XTLbio focuses on developing biological treatments for Hepatitis, VivoQuest has a development team that includes chemists with worldwide reputations.
XTLbio was listed for trading on Nasdaq three weeks ago, and is expected to begin a road show shortly, with the aim of exposing the company to US investors.
Published by Globes [online], Israel business news - www.globes.co.il - on September 21, 2005