BioWorld International Correspondent

Danish oncology firm TopoTarget A/S acquired UK cell cycle specialist Prolifix Ltd. in a combined cash and shares deal. The Copenhagen-based company also raised DKK120 million (US$15.3 million) in new funding, from HealthCap of Stockholm and BankInvest of Copenhagen.

"The vast majority is being used for investment going forward, but some is being used to fund the transaction," TopoTarget co-founder and head of business development Neil Goldsmith told BioWorld International. "Both sets of investors saw sense in trying to consolidate companies in the current climate," he said. "We think we now have a company that is well positioned should markets open up in Scandinavia."

The transaction creates an oncology drug development company with a combined work force of 45, with one compound in clinical trials for two separate indications and two more in late preclinical development.

TopoTarget was formed in late 2000, but its development programs are based on a decade of research into catalytic inhibitors of DNA topoisomerases I and II at Copenhagen University Hospital. It already has a drug candidate - called TopoTect - in Phase III trials for prevention of tissue damage following extravasation or fluid leakage in cancer patients undergoing chemotherapy. That program has gained orphan drug status in the European Union, and the company is seeking the same designation from the FDA.

TopoTect is also in Phase I/II trials for treatment of brain metastases. The compound is being developed as a tissue protectant in both indications. Goldsmith said inhibitors of DNA topoisomerases account for about US$800 million in annual sales. But because of their toxicity, both use and dosage are limited.

TopoTect acts as an antagonist to those compounds, thereby protecting healthy tissues from their toxic effects.

Prolifix, of Abingdon, Oxfordshire, was formed in 1994 to commercialize research into the control of cell division that had been conducted at the UK Medical Research Council's laboratories in London. The company does not have not have any compounds in the clinic, but it is developing two histone deacetylase inhibitors, for treatment of cancer and psoriasis.

"We would hope to have them in the clinic early next year," Goldsmith said.

Prolifix's capabilities in high-throughput screening and computational chemistry were additional sources of attraction.

The new cash is "sufficient to see us to the end of 2003 and a bit beyond that," he said.

The company aims to raise a similar sum on the same terms over the summer months. If successful, it would be funded for the next three years.