Two privately held companies developing products for eye diseases merged with a public shell company to form a new company named Opko Corp.

The deal includes Acuity Pharmaceuticals Inc., which has plans to move an RNA interference-based compound into Phase III trials, and Froptix Corp., which has preclinical compounds for treating dry age-related macular degeneration and other ophthalmic diseases. They merged with the public firm eXegenics Inc., a former drug discovery firm with a bit of a checkered past that hasn't had active operations for several years.

A key ingredient in the deal was Phillip Frost, former chairman and CEO of Ivax Corp., a company that he founded along with the Key Pharmaceuticals Inc. Key was sold about 20 years ago to Schering-Plough Corp., of Kenilworh, N.J., for about $600 million. Ivax, a developer of generic products, was purchased in a deal that closed last year by Jerusalem-based Teva Pharmaceutical Industries Ltd. for about $7.4 billion.

Frost last year paid about $8.6 million to buy about 51 percent of eXegenics, which had nearly that amount of cash. The remaining $16 million will fund the merged firm.

Frost and his private equity group also were behind the recent reverse merger of Protalix Biotherapeutics Inc., of Karmiel, Israel, and the public shell firm Orthodontix Inc., which closed in January. (See BioWorld Today, Aug. 23, 2006.)

And it's likely that Frost's interest in that model of taking companies public will continue, as last week he and other investors purchased 51 percent of Getting Ready Corp., another company with no significant operations that trades on the Over-the-Counter Bulletin Board. It intends to merge with an operating company.

Frost, who is based in Miami, will run Opko as chairman and CEO. Dale Pfost, chairman, president and CEO of Acuity, is Opko's president. Acuity was based in Philadelphia; Froptix in Gainesville, Fla.; and eXegenics in Pittsford, N.Y. The merged company is based in Miami. The deal was expected to close later Tuesday.

Pfost said the deal made sense for Acuity on a few levels. First, he told BioWorld Today, it gave the company access to the $16 million in cash held by eXegenics - as well as a $12 million line of credit being provided by The Frost Group - which will allow it to move bevasiranib sodium, formerly named Cand5, into Phase III trials in wet age-related macular degeneration.

The Phase III plan, disclosed for the first time Tuesday, involves the use of bevasiranib as a maintenance therapy for wet AMD in combination with South San Francisco-based Genentech Inc.'s Lucentis. The RNAi agent bevasiranib is designed to shut down vascular endothelial growth factor, while Lucentis is an approved VEGF antagonist. It is believed bevasiranib would be the first RNAi agent to be tested in Phase III trials.

A second reason for the deal, Pfost said, was gaining the relationship with Frost, which he sees as a significant commitment to move drugs candidates forward.

It also made sense, he said, to bring in Froptix, which has exclusive rights to technology developed at the University of Florida relating to small-molecule therapeutics for retinal and macular degeneration. It has a lead compound for dry AMD, a more prevalent condition than wet AMD and one for which there are no effective therapies. Froptix also has a lead compound in retinitis pigmentosa and a pipeline of additional small-molecule candidates. They also plan to develop complementary diagnostic products in ophthalmology, Pfost said.

Parties to the merger were restricted from discussing specifics of the deal until the filing of an 8-K form with the Securities and Exchange Commission, a move expected by Monday. That means many of the details will not be disclosed until that filing. Those include the percentage ownership positions of the respective parties, the plan for the Acuity business in Philadelphia and other details.

eXegenics' stock (OTC BB:EXEG) gained 76 cents Tuesday, or 30.2 percent, to close at $3.28. The merged firm intends to apply to have its shares listed on the American Stock Exchange.

Acuity last raised money in late 2004, a $15 million round of Series B financing that coincided with the start of Phase I trials of bevasiranib, the first RNAi agent to enter human trials. Earlier in 2004, Acuity raised $2.4 million in its first institutional round of financing. The company was founded in 2002. Acuity last year reported Phase II results of bevasiranib, which is designed to silence the gene that produces VEGF. Results from the 129-patient study showed a dose-related effect across multiple endpoints, including near vision, lesion size and time to rescue. Further details on the planned Phase III study with Lucentis - such as trial design or time frames, were not disclosed. The agent was studied in diabetic macular edema as well as wet AMD.

Acuity last year also gained an option to license an early stage small interfering RNA product targeting ocular diseases, from ZaBeCor Pharmaceutical Co., of Philadelphia. It also licensed worldwide rights to N-chlorotaurine, a small-molecule anti-infective, from Pathogenics Inc., of Hingham, Mass.

eXegenics, meanwhile, makes a return to the news after a series of setbacks led to the discontinuation of drug discovery operations in 2002 and delisting from Nasdaq in 2004. The company's entire board had been replaced by five nominees of an investor group, which later unsuccessfully sued eXegenics. The company also was involved in at least two proposed mergers that fell through, with Innovative Drug Delivery Systems Inc., of New York, and AVI BioPharma Inc., of Portland, Ore.