Pharming Announces Acquisition of DNage
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Pharming Group N.V. has announced that it has signed a Heads of Agreement to acquire the outstanding share capital of DNage B.V.
DNage was founded in 2004 as a spin-off from the Erasmus Medical Center in Rotterdam to commercialise break-through science by Professor Hoeijmakers and colleagues in the area of DNA damage and repair.
This team was the first to establish an explicit connection between DNA repair and the development of major ageing diseases, such as osteoporosis and neurodegeneration, in addition to the already known link between DNA-repair and cancer.
DNage currently has active programs in the areas of osteoporosis, neurodegeneration (brain diseases), metabolic diseases (type II diabetes) and genetic diseases (premature ageing).
Its first product for Cockayne disease, a rare genetic disease in which children suffer from accelerated ageing while developing severe ageing diseases, is in late stage preclinical development.
The transaction is expected to be completed by the end of May 2006, pending finalization of due diligence and corporate approvals.
Pharming will pay four million shares in several instalments to the existing DNage shareholders in addition to 600,000 warrants, future milestone payments, based on DNage-product development achievements, and royalties on future sales of DNage-products.
A combination of Pharming with DNage will generate important synergies. For instance, there is scientific evidence that lactoferrin, one of Pharming’s current products undergoing regulatory review, may have a beneficial effect in the field of osteoporosis.
In the area of immunology, where deterioration of the immune system is a major age related problem, there is strong clinical evidence that Pharming's lead product, a C1 inhibitor, plays an important role.
In addition, there will be synergies in the area of business development and management expertise.
"The acquisition of DNage will provide Pharming with access to highly innovative products and a technology platform for new markets in the areas of ageing and cancer," said Dr. Francis Pinto, Chief Executive Officer of Pharming.
"The combination of the world-class technology developed by Professor Hoeijmakers and our recombinant human protein products will provide Pharming with new opportunities in the area of tissue repair and regeneration."
Dr. Rein Strijker, Chief Executive Officer of DNage, commented, "The scientific work of Professor Hoeijmakers and his team has given us novel insights into the relationship between ageing and common, serious and disabling medical conditions."
"These insights provide a solid foundation for a rich pipeline of truly novel products. The acquisition by Pharming allows for an expanded and accelerated program to bring these products to market."
"The integration of the DNage-business into Pharming will generate significant benefits for both the Pharming and DNage shareholders."
"I believe that the DNage business will contribute greatly to the value of Pharming, through the obvious synergies as well as through the identification of new product leads in important markets."
"Our business plan calls for the start of clinical studies next year, the identification of new product leads, the signing of collaborations with corporate partners and the application for several grants and subsidies. In all these valuable areas, we are optimistic about our chances of success."
Pharming expects the acquisition of DNage to trigger additional business development opportunities including new partnerships as well as grants and subsidies.
DNage’s current shareholders include the ErasmusMC in Rotterdam, venture capital funds represented by Life Sciences Partners (NL), who were part of the founding team, and Inventages (CH) and founders and management.
The company has an exclusive research and license agreement with ErasmusMC under which it supports research activities in ErasmusMC and holds an exclusive license to Intellectual Property developed by ErasmusMC in the field.
Upon closing of the transaction, Dr. Strijker, currently also member of the Board of Supervisory Directors ('BOSD') of Pharming, will be nominated as member of the Board of Management of Pharming and will resign from the BOSD.
Prof. Hoeijmakers will remain professor at the Erasmus Medical Center and will be nominated as chairman of the Scientific Advisory Board of Pharming.
