West Coast Editor

Two months after licensing a lipid-lowering drug from EndoChem Inc., QuatRx Pharmaceuticals Co. is adding to its pipeline a handful of clinical-stage compounds in other areas, by way of acquiring the Finnish firm Hormos Medical Corp. for undisclosed terms.

The deal, expected to close in the next few weeks, leaves QuatRx with two compounds ready for Phase III trials, two more ready to enter Phase II in the next year, and one positioned for Phase I.

"That's about as good as it gets for a privately held company," noted Robert Zerbe, president and CEO of Ann Arbor, Mich.-based QuatRx, who called the buyout a "quantum leap" in the company's effort to build a strong portfolio. Terms were not disclosed.

Hormos brings ospemifene, a selective estrogen receptor modulator for postmenopausal women, which is positioned to enter Phase III studies. Fispemifene, for androgen deficiency and associated conditions in aging men, is expected to enter Phase II this year. Both are targeted hormone therapies.

On its own, QuatRx has the dyslipidemia products QRX-401 and QRX-431, designed to reduce the levels of LDL and Lp(a), both of which are markers for premature coronary heart disease. The latter was licensed in March from Berkeley, Calif.-based EndoChem.

QRX-401 has completed multidose Phase I trials and is billed as an alternative treatment option for use alone or in combination with statins, fibrates and other current lipid-treatment programs. Although data have not been made public, they "look very encouraging," Zerbe said.

QRX-431, still at the preclinical stage, works as an agonist on a specific thyroid receptor, thus helping to increase metabolism without creating negative cardiac effects - while still promoting the hepatic functions that help lower lipid levels.

"We're very excited about it," Zerbe said. "Thyroid hormone has been used from time to time in the past for lipid disorders and obesity." QRX-431 apparently avoids the tachycardia side effect while helping with lipids.

"It's been shown very nicely, preclinically, that those two effects can be separated," he said.

QuatRx also is developing becocalcidiol, which has completed Phase II studies for psoriasis and is expected to enter Phase III next year. The compound is a topical vitamin D analogue that avoids the hypercalcemia associated with current therapies.

"We're looking for a development partner with that compound," Zerbe told BioWorld Today, calling the compound "really a hormone more than it is a vitamin" and noting that "topical therapies are not where we're headed" overall. QuatRx is searching for a dermatology specialty group or major pharma partner to help with becocalcidiol, he said.

Meanwhile, the Hormos takeover is "very much in keeping with the strategy we've developed," Zerbe said. QuatRx has pledged to cast a wide net, taking aim at endocrine, metabolic and cardiovascular disorders. Next, the company might seek to in-license compounds for diabetes and obesity, he said.

Late last year, QuatRx raised $31 million in its third round of financing. The firm had raised more than $67 million in venture capital backing since its incorporation four years earlier. (See BioWorld Today, Dec. 14, 2004.)

With the Hormos deal, a representative of that firm's investor group will join the QuatRx board, and major investors from Hormos will put more cash into QuatRx as an extension of the recent round of VC money.

"It's not a huge amount, but it's not insignificant either," Zerbe said. "We're in very good shape [already]," he added. Excluding cash from the Hormos investors, QuatRx has enough to last until the end of 2006 and into 2007.

"It gives us tremendous flexibility" in a time when "the public markets are not the greatest," Zerbe said.

Turku, Finland-based Hormos will become a wholly owned subsidiary of QuatRx, with headquarters at the Ann Arbor facility and offices overseas. Zerbe will remain president and CEO for the combined company. Risto Lammintausta, formerly CEO at Hormos, is joining the senior management team at QuatRx.

QuatRx employs 13 people and Hormos has about 34, but "part of the activity [at Hormos] is research done in collaboration with pharma partners in Europe," Zerbe said.