BioWorld International Correspondent

LONDON - Mouse genetics specialist Paradigm Therapeutics Ltd. acquired Amedis Pharmaceuticals Ltd. in an all-share deal. It also received new funding of £5.5 million (US$10.3 million) from existing investors to add to the £5.5 million already in the pot.

The value of the deal was not disclosed, but Mark Carlton, Paradigm CEO, told BioWorld International that the valuation of the combined entity was greater than the £24 million that the companies have raised to date.

"We are now positioned to act in a wide breadth in drug discovery," Carlton said. "We can take programs all the way from targets to clinical candidates, and can do commercial deals at any position en route."

Carlton becomes chief operating officer of the merged company, while Edwin Moses, nonexecutive chairman of both companies, takes on the role of executive chairman.

There was no pressure from shareholders to do the deal, Carlton said.

"The management worked very hard to put together the best business plan. And although it is never easy to raise money, the investors saw the merit of the plan."

The new money came from Bio*1Capital, Merlin Biosciences and Avlar Biosciences. "This gives us a very clear runway. Excluding any revenues it will last for beyond the next two years," Carlton said.

The acquisition of Amedis brings in silico and laboratory medicinal chemistry skills to add to Cambridge-based Paradigm's portfolio of drug targets, identified with its in vivo functional genomics technology. There also are two preclinical programs in central nervous system diseases and hormone-related cancers to go with Paradigm's programs in pain and metabolic disorders.

The company's business model is to license out preclinical leads and targets that are not being exploited in-house, and to form alliances based on the genomics technology in therapeutic areas outside its fields of interest.

"We have ongoing negotiations and have got some deals at very advanced stages, which will bring in money very soon," Carlton said.

Paradigm uses transgenic mice to define the biological function of previously uncharacterized human druggable proteins. "This has proved to be a great tool because you are actually testing the function of genes in vivo in a mammal; this gives you a good understanding of what the gene will do in man - we are getting good extrapolation," Carlton said.

Paradigm was spun out of Cambridge University in 1999 and raised £1 million in its first round in December 2000, followed by £12 million in December 2002.