BioWorld International Correspondent

Cureon A/S and Pantheco A/S, two Danish firms that specialize in developing antisense drugs based on DNA analogue chemistry, disclosed plans to merge in a stock-based transaction that would create a "nucleic acid powerhouse" focusing initially on cancer therapy.

The move was encouraged by their investors, Pantheco CEO Lars T nnesen told BioWorld International, adding that "both investor groups have decided to increase the capital in connection with the merger."

The amount involved was not disclosed, but the firms hold an aggregate of €15 million in cash at present, T nnesen said. Copenhagen-based Pantheco has raised about US$28 million since its establishment in 1998, while Cureon, which was formed as a spin-off from Copenhagen-based Exiqon A/S in 1999, has raised about US$15 million.

Neither has a product in the clinic yet. Pantheco was formed to develop anti-infective compounds based on a DNA analogue chemistry called peptide nucleic acids (PNAs), which differ from nucleic acids by having a peptide rather than a sugar-phosphate backbone. The technology was developed at the University of Copenhagen and at the Riso National Laboratory in Denmark, but licensed in several directions - Isis Pharmaceuticals Inc., of Carlsbad, Calif., holds pharmaceutical rights. Pantheco abandoned its anti-infectives strategy last fall when it gained access to the use of the PNA technology against a number of cancer targets from Isis.

"Doing that, it was quite obvious that the two companies would fit together," T nnesen said. Copenhagen-based Cureon also is focusing on cancer, using a technology called Locked Nucleic Acids (LNAs), which also was developed at the University of Copenhagen. The conformational freedom of the furanose ring in standard nucleosides is restricted in LNAs by a methylene linker that connects the 2'-O position to the 4'-C position. The resulting molecule exhibits altered DNA- and RNA-binding properties and other performance enhancements.

The merger opens up the prospect of testing both types of chemistry against cancer targets.

"We are talking about complementary technologies, so this will give us a much larger toolbox," T nnesen said.

The merger, which remains subject to formal shareholder approval, is expected to close within one or two months, he said. Cureon CEO Mats Lundwall is expected to become CEO of the new entity, while T nnesen would become chief financial officer. The new organization does not yet have a name, but it probably will be based in Pantheco's premises, T nnesen said.