Swedish Firm Sets Aside $25 Million for Gensia Research
KabiVitrum AB, a Swedish pharmaceutical company, will pump as much as $25 million into Gensia Pharmaceutical’s drug research and development program during a five-year period, according to a letter of intent announced Tuesday.
Gensia, a San Diego-based biotechnology company, will use the funding to develop purine- and pyramidine-based drugs that may help minimize cardiac tissue damage caused by heart attacks. Gensia will use the KabiVitrum money for basic research and, eventually, clinical testing for sale in the European market.
In exchange, KabiVitrum will have exclusive European marketing rights for newly developed purine products, except in Great Britain, where the two companies will co-market new products.
Clinical Trials Planned
Gensia hopes to begin human clinical trials in the United States for its first purine drug this month.
Gensia anticipates that in addition to minimizing tissue damage from heart attacks, its purine drugs might one day be used to treat various cardiovascular and neurological diseases.
An as-yet unspecified portion of the $25 million will be in the form of an equity investment in Gensia. However, the Swedish firm will end up with a “minor percentage” of Gensia’s closely held stock, Gensia President David F. Hale said Tuesday.
KabiVitrum’s funding will lead to the “joint clinical development of Gensia products for the European market,” according to Hale.
“This funding will enhance and accelerate Gensia’s basic research program, which is focused on the discovery and development of novel therapeutic drugs based on this technology,” he said.
The company expects to complete a final agreement with KabiVitrum in December.
Gensia was founded in 1986 by UC San Diego Professors Paul Laikind and Harry Gruber. Hale joined the company in May, 1987. He had served as president of Hybritech, a San Diego-based biotechnology company, since 1982.
KabiVitrum, based in Stockholm, markets blood-clot-dissolving agents and human growth hormones throughout Europe.
“We went looking for KabiVitrum,” Hale said. “We’d been talking with several other companies but ended up signing with them.”
The letter of intent was Gensia’s first international agreement, according to Hale. However, the company expects to eventually sign a marketing agreement with a pharmaceutical company in the Pacific Rim.
Gensia completed an initial $5-million venture-capital round in May, 1987. In December, Gensia raised an additional $9.7 million in a venture-capital round that is being used to finance the creation of a European subsidiary. That funding drew capital from several large venture-capital firms in Great Britain.