BioWorld International Correspondent

PARIS - Diatos SA filed a "document de base," or preliminary prospectus, with the French Financial Markets Authority (AMF) May 12 looking to launch an initial public offering on the Eurolist market of Euronext Paris and Euronext Brussels.

Assuming it obtains the AMF's seal of approval, and provided market conditions are favorable, the company intends to launch the IPO in the second half of June.

Shortly before making the announcement, Diatos had signed an exclusive in-licensing agreement with Gilead Sciences Inc. to get worldwide development and commercialization rights to DaunoXome, a liposomal formulation of daunorubicin that is on the market in more than 20 countries for Aids/HIV-related Kaposi's sarcoma.

The agreement grants Paris-based Diatos rights to DaunoXome in Kaposi's sarcoma, as well as in other indications. In exchange, Gilead, of Foster City, Calif., will receive up-front and milestone payments that could total $4.7 million, depending on regulatory approvals obtained by Diatos, as well as royalties.

As the CEO of Diatos, John Tchelingerian, told BioWorld International, DaunoXome has big potential in acute myeloid leukemia (AML), having been tested in that indication in extensive clinical trials. The liposomal formulation of daunorubicin developed by Gilead improves the pharmacokinetic properties of the drug, which can cause severe cardiotoxic and hematotoxic side effects, severely limiting the dose that can be administered safely.

Gilead in January completed a Phase III trial of DaunoXome in elderly AML patients, and results suggested a better clinical outcome for those receiving the product as a first-line treatment, compared with those administered daunorubicin.

Tchelingerian said Diatos would file DaunoXome as a treatment for acute leukemia with European regulatory authorities within the next few months.

"We hope to obtain regulatory approval in early 2007 if all goes well," he added. He explained that Gilead was not interested in exploiting the product in AML because it is more specialized in infectious diseases, whereas Diatos is focused solely on oncology.

Diatos has developed peptide-based, intracellular drug delivery and tumor-targeting technologies that improve the properties of existing drugs, and also is developing new therapies of its own. It currently has two drug candidates in clinical development: DTS-301, a novel formulation of paclitaxel, which entered a Phase IIa trial in September 2005; and DTS-201, a doxorubicin prodrug, a Phase I trial of which started in June 2005.

Tchelingerian said Diatos would handle the sales and marketing of DaunoXome for AML in Europe itself, and would seek partners or distributors for other markets, including the U.S. He added that Diatos would continue to market DaunoXome in Kaposi's sarcoma in Europe, Brazil and, in an essentially passive mode, the U.S.