Australian-based anti-infective drug developer Biota Holdings (ASX:BTA) has acquired the assets and drug development programs of MaxThera, Inc, an antibacterial drug discovery company located in Boston, USA.
As consideration, Biota will pay MaxThera for US$1.2m in cash and US$300,000 in Biota shares.
Shares issued, following completion and will be released from escrow to MaxThera shareholders in two equal tranches at six and twelve months.
MaxThera shareholders are also entitled to receive twelve percent of all upfront and milestone payments received by Biota if the two main programs are licensed.
MaxThera is a privately owned, antibacterial drug discovery company, developing new classes of drugs directed againstnovel bacterial targets in life threatening infections that are resistant to existing antibiotics.
MaxThera's lead program targets inhibitors of an essential bacterial enzyme in the Coenzyme-A biosynthetic pathway. Coenzyme-A is responsible for a large number of metabolic processes in bacteria.
Biota’s chief executive officer, Peter Cook, said today Biota’s strategy is to increase its portfolio of drugs in development and to expand beyond antivirals into other anti-infectives.
"MaxThera’s portfolio of new targets and novel inhibitor structures are highly complementary to Biota’s own innovative programs,” he said.
Biota will accelerate the development of the lead program and invest up to US$15 million, assuming development milestones are achieved. The investment will be in approximately equal instalments over the next 3 to 5 years.
The majority of the upfront consideration will be expensed in the F2010 financial statements.
Investors may recall Biota has developed the first-in-class neuraminidase inhibitor, zanamivir, subsequently marketed by GlaxoSmithKline as Relenza.
Subsequent Biota research breakthroughs have included novel nucleoside analogues designed to treat hepatitis C virus (HCV) infections, licensed to Boehringer Ingelheim, and a series of candidate drugs aimed at treatment of respiratory syncytial virus (RSV) disease.
Biota has clinical trials underway with its lead compound for human rhinovirus (HRV) infection in patients with compromised respiration or immune systems.
Investors who had acquired Biota shares at the start of the year at just over $0.30, would be looking at tidy gains of over 870%, to the current price of $2.91.