Drug Company Buys Stake in Biotech Firm
In the latest of a string of strategic alliances between young biotechnology firms and established drug manufacturers, Gensia Pharmaceuticals of San Diego has agreed to sell 15.9% of its stock for $15 million to Marion Merrell Dow Inc.
The deal gives Marion Merrell Dow the right to exclusively license, manufacture and market certain oral drugs Gensia is developing that use a new class of compounds called purine/pyrimidines to treat cardiovascular and cerebrovascular diseases. The drugs may benefit heart attack and heart disease victims.
Based in Kansas City, Marion Merrell Dow was formed last year when Dow Chemical’s Merrell Dow Pharmaceuticals subsidiary merged with Marion Laboratories to form a $2-billion-plus drug manufacturing and marketing company. One of the company’s drugs, a calcium channel blocker called Cardizem, is a leading treatment for angina and hypertension.
Closely held Gensia was founded in 1986 by two University of California, San Diego, scientists and has since raised $26.2 million in venture capital to further its research and development of compounds associated with purine/pyrimidine metabolism, President David Hale said Wednesday.
The compounds seem to be effective in minimizing the tissue damage called ischemia, which results from the lack of oxygen caused by heart attacks. If successful, the drugs could be administered to acute heart attack victims as well as to chronic sufferers of heart disease, Hale said.
Gensia’s first product, a purine compound called ARA-100, is in advanced stages of clinical trials in the United Kingdom and may reach the market by 1994, Hale said. The potential market for the drug is at least $100 million for acute applications and $200 million for chronic patients, Hale said.
Richard Stover, a principal with Alex. Brown & Sons investment bankers in New York, said the Marion Merrell Dow-Gensia agreement is “characteristic of Marion’s strategy where they find interesting technology and sources of products for some of their therapeutic areas, particularly cardiovascular and ischemic heart disease.”
Hale, who was president of Hybritech when the San Diego-based monoclonal antibody company was acquired by Eli Lilly for $485 million in 1986, said in a statement that the “physician office-based market” for the oral drugs Gensia is developing is “best served by a major pharmaceutical company such as MMD, which has the marketing capability and financial resources to address these large markets.”
