BioWorld International Correspondent

Pharmexa A/S raised gross proceeds of DKK72 million (US$11.4 million) in a private placement to fund its $12 million cash acquisition of infectious disease and other assets from IDM Pharma Inc., of San Diego.

The Hørsholm, Denmark-based company is taking over a 27-person R&D facility in San Diego, which had belonged to Epimmune Inc., prior to its merger earlier this year with Immuno-Designed Molecules SA, of Paris, to form IDM Pharma.

ING, of Amsterdam, the Netherlands, underwrote the sale of 3.4 million shares to 18 European institutional investors, including specialist life sciences investors Puilaetco, Dexia, KBC, Reabourne and Edmond de Rothschild. The shares were priced at DKK21.45 per share, a 6.3 percent discount to the stock's closing price of DKK22.90 on the day before disclosure of the transaction. Included in the deal with IDM is a pipeline of clinical and preclinical immunotherapy projects for treatment and prophylaxis of infectious disease, as well Epimmune's immunostimulatory, T-cell epitope platform Padre and its Epitope Identification System (EIS). Pharmexa has also taken over the Epimmune name and trademark, and it is establishing a U.S. subsidiary in San Diego, which will be called Pharmexa-Epimmune Inc.

"Pharmexa has known Epimmune for quite a while, since 2000, and we have had a license agreement on the Padre technology for five years, so it's a company we know quite well," Pharmexa CEO Jakob Schmidt told BioWorld International. "They've always been top of our wish list from the point of view of technology we'd like to own. You could say we are buying back future royalties on the Padre technology. That alone would justify the value of what we're paying here."

But it has also acquired clinical-stage projects in HIV and hepatitis B virus therapy, as well as preclinical projects in malaria, influenza, human papillomavirus and hepatitis C virus. The HIV project work is supported by funding from the National Institutes of Health, while the HBV, HCV and HPV projects are the subject of an agreement with Innogenetics BV, of Ghent, Belgium, which recently was extended to the end of March 2006.

Pharmexa reported cash, cash equivalents and marketable securities totaling approximately $60 million at the close of the third quarter, and therefore, the extra operational costs will not impose a significant burden on the company. "It's an additional cash burn of a few million dollars in the next two or three years," Schmidt said. For that expenditure, Pharmexa is teaming up with what Schmidt called "a world class group of people."

The acquisition follows its takeover earlier this year of Norwegian cancer immunotherapy firm GemVax A/S, through which it gained a peptide cancer vaccine that is about to enter two Phase III trials. The trials will involve about 1,400 patients in total, which, Schmidt said, will make the program one of the largest to date in the immunotherapy field. "We hope to be able to start them in the next three to six months."

The field, he said, has been slow to deliver on its promise, and its development has been hampered by poor target choices and inadequately designed clinical programs. But Schmidt sees more grounds for optimism at present. "There is more interest from big pharma, and there is more interest from investors; but it's a slow process, and it's going to be a few more years."