BioWorld International Correspondent

LONDON - SR Pharma plc said it is conducting a fundamental review of its strategy after taking full control of a joint venture and acquiring other assets from Rodaris Pharmaceuticals plc. The acquisitions will allow SR Pharma to diversify its portfolio away from the Mycobacterium vaccae immunotherapeutics around which it was founded.

Steeve Lamontagne, commercial director, told BioWorld International, "Our pipeline consisted of four compounds based on M. vaccae. Now we have 254 compounds, which are all well-characterized, and some of which are in clinical development."

London-based SR Pharma did not reveal how much it paid for the assets of privately held Rodaris, of Oxford, but Lamontagne said, "It was a nominal consideration, but the compounds are of very high value."

The most advanced is an easy-to-use test for diagnosing susceptibility to pre-eclampsia in pregnant women, which has completed a 1,000-subject trial. Lamontagne said SR Pharma will probably license that and a number of compounds for treating diabetes, some of which are expected to enter the clinic before the end of 2003. "In diabetes the animal models are very predictive. We will do additional preclinical work and expect to outlicense."

The joint venture with Rodaris, Innopeg Ltd., was studying bacterial inosital phosphoglycans (IPG), cell-signaling molecules that mediate the action of certain hormones and growth factors. SR Pharma has discovered IPG-like molecules in M. vaccae, while Rodaris has developed IPG mimetics. Taking control of the joint venture has given SR Pharma full rights to candidates in diabetes and obesity.

Although SR Pharma's M. vaccae compounds have failed in Phase III trials in tuberculosis and cancer, they still are in clinical trials in asthma, atopic dermatitis and psoriasis, with the most advanced, SRP299, in Phase IIb trials.

In addition, the U.S. National Institutes of Health is sponsoring a $2.4 million study of M. vaccae in treating multidrug-resistant TB in HIV/AIDS patients. The 2,000-patient study in Tanzania is due to report in 2005. SR Pharma is not involved in the trial, but it is supplying the drug.

The company has a relatively robust cash position with £7 million (US$10.8 million) and a current burn rate of just under £2 million per annum. Chairman Eric Boyle said, "Regardless of SR Pharma's disappointing share price, which stood at 38 percent discount to cash at year-end, the group's prospects remain exciting."