BioWorld International Correspondent

LONDON - Scotia Pharmaceuticals plc sold its lipid technology business in Sweden and its laboratories in Carlisle, UK, for approximately US$2 million in cash, in an attempt to make meager resources last until the FDA rules on the company's lead compound, Foscan.

Scotia is selling the production facilities of Scotia LipidTechnik, located in Norberg and Karlshamn, Sweden, to Lipid Technologies Provider AB. This is a new company backed by venture capitalists led by Cimon Medical AB. Scotia, based in Stirling, Scotland, will retain an equity interest and be entitled to royalties on products developed by Lipid Technologies.

In addition, Scotia sold the intellectual property rights to its lipid reformulation technology in pharmaceutical products to Karolinska Investment Fund KB (KIF), for an undisclosed sum, plus royalties from future commercialization. The two are considering another deal to sell most of Scotia's operations in Stockholm to KIF, which is the technology transfer arm of the Karolinska Institute.

Gerry Lafferty, Scotia secretary, told BioWorld International, "We still think there is value in the [lipid] technology, but we can't afford to spend the money to develop it."

LipidTechnik has a number of research agreements with pharmaceutical partners, to reformulate drugs with the lipid technology. "These collaborations will transfer with the business," said Lafferty. "The terms of the deals are unchanged, and Scotia will be entitled to ongoing royalties [from any products arising] from the deals."

Scotia has retained the rights to its one commercialized lipid product, Olibra, a food additive for inducing satiety.

The changes will result in the divestment or closure of all Scotia's Swedish operations by the end of the first quarter.

Scotia completed the closure of its laboratories in Carlisle at the end of August. It has now sold them to Norbrook Laboratories, of Newry, Northern Ireland, for an undisclosed sum.

The proceeds from these sales will extend Scotia's funding into May, increasing its chances of hanging on until it gets the FDA's verdict on Foscan. At the beginning of December the FDA agreed to a resubmission of the application for Foscan, Scotia's photodynamic therapy for the treatment of head and neck cancer, and the company aims to resubmit the file, including data from 83 additional patients, by March. It will then be on a 180-day approval track.

Scotia also gave a progress report on its application for Foscan in Europe, saying it attended a "constructive meeting" with the Committee for Proprietary Medicinal Products (CPMP), the scientific advisory panel of the European Medicines Evaluation Agency. The company was expecting the CPMP's opinion before Christmas, but a further meeting is being organized for later this month, when the CPMP will meet Scotia and a panel of head and neck cancer experts. The CPMP would be expected to issue its opinion on Foscan soon afterward.