Oxford BioMedica plc, of Oxford, UK, agreed to acquire neighboring Oxxon Therapeutics Ltd., in an all-share transaction valued at about £16 million (US$30.9 million).

The deal would give Oxford BioMedica access to Oxxon's Hi-8 PrimeBoost technology and resulting product pipeline, including Hi-8 MEL, an immunotherapeutic cancer vaccine that yielded positive results in a Phase II trial in melanoma patients.

Designed as a modified vaccinia ankara (MVA) vaccine encoding seven epitopes derived from melanoma antigens, Hi-8 MEL offers "a good complement" to Oxford BioMedica's own immunotherapy candidate, TroVax, said Alan Kingsman, CEO of Oxford BioMedica.

TroVax, which began enrolling patients in a Phase III renal cancer trial in November, is an MVA vaccine aimed at binding to the 5T4 surface antigen found on nearly all solid tumor types, with the exception of melanoma, Kingsman said.

Oxford BioMedica's pipeline focuses primarily on gene-based therapeutics in oncology, including immunotherapeutic vaccines, so the two companies have "been working in similar areas of activity," he told BioWorld Today, adding that his firm began considering the acquisition last year shortly after Oxxon said it was seeking strategic alternatives for continuing business development.

Under the terms, Oxford BioMedica will issue 27.6 million shares, determined by a reference price of 50.36 pence per share, for the entire share capital of privately held Oxxon, plus 4.2 million shares to repay a loan from Oxxon shareholders. In exchange, Oxford BioMedica picks up all of Oxxon's assets, including about £3 million in cash, which will be used to advance Hi-8 MEL through Phase III, Kingsman said.

Overall, the deal is "cash neutral," and is not expected to affect Oxford BioMedica's guidance for the year, he added.

To date, Hi-8 MEL has completed several early stage studies, including a Phase II dose-escalation trial, in which the product was well tolerated and showed immunological responses in 91 percent of the melanoma patients receiving the highest dose. The product emerged from Oxxon's Hi-8 PrimeBoost therapy platform, described as a two-part approach designed to stimulate a specific T-cell response by using vectors that are encoded to disease-specific antigens and then amplifying or "boosting" that T-cell response.

Beyond Hi-8 MEL, Oxxon's pipeline includes Hi-8 HBV, in Phase II development against hepatitis B vaccine and Hi-8 HIV, which has started early clinical testing in HIV.

Upon closing the acquisition, Oxford BioMedica intends to assimilate the small company as a wholly owned subsidiary, though the firms eventually will be fully integrated. Some of Oxxon's 18 employees will move to Oxford BioMedica, and "we'll be closing the Oxxon facility in due course," Kingsman said.

Founded in 1999 as a spinout of Oxford University, Oxxon has been funded primarily by venture capital. Its investors include UK firms MVM Life Science Partners and Quester, along with NIF Ventures, of Tokyo, and East Hill Management, of Boston.

Also a spinout of Oxford University, Oxford BioMedica was founded in 1995. In addition to its Phase III trial of TroVax in renal cancer, the company is testing that immunotherapy product in Phase II studies in colorectal and prostate cancers. It also has an ongoing Phase II study of its gene-based cancer therapeutic, MetXia, in pancreatic cancer. Another cancer product, an antibody targeting the 5T4 antigen, is partnered with Madison, N.J.-based Wyeth, which is expected to file an investigational new drug application soon.

In its neuropathy pipeline, Oxford BioMedica is getting ready to begin clinical testing with ProSavin in Parkinson's disease. Other early stage programs include gene-based products for vision loss, motor neuron disease and nerve repair.

Oxford BioMedica's stock (LSE:OXB) closed at £.49 Monday, down £.65.