LONDON, May 16 (Reuters) – British biotechnology company Antisoma Plc (ASM.L: Quote, Profile, Research) agreed to buy Xanthus Pharmaceuticals Inc, a private U.S. cancer specialist, for 26.8 million pounds ($52.2 million) in shares, it said on Friday.
Antisoma Chief Executive Glyn Edwards said the deal would give the company more drugs in later-stage development.
“Combining Antisoma and Xanthus produces a company with the critical mass and mature pipeline needed to become a major player in oncology,” he said.
Biotech analyst Paul Cuddon at brokerage KBC Peel Hunt said it was an astute deal that reduced Antisoma's reliance on ASA404, its lung cancer drug which is being developed by Switzerland's Novartis AG (NOVN.VX: Quote, Profile, Research).
“Antisoma has picked up a high quality asset,” Cuddon said. “It offers many synergies and will enable the company to generate cash from licensing deals.”
Antisoma shares were up 1 penny or 3.6 percent at 28-1/2p by 1032 GMT.
Boston-based Xanthus is working on three major projects: Xanafide, a Phase III treatment for leukaemia; U.S. rights for an oral version of cancer drug fludarabine; and an early-stage treatment for multiple sclerosis and rheumatoid arthritis.
“Xanafide has hundreds of million of dollars of potential sales, whereas oral fludarabine is in the tens of millions, but it is more near-term certain,” Edwards said in a telephone interview.
The oral form of the drug, which is marketed by Bayer-Schering Pharma outside the United States, has captured about 70 percent of the British market, he said.
The drug has been submitted to the U.S. Food and Drug Administration for marketing approval and Edwards said a response is expected later this year or, more likely, in 2009.
Antisoma raised 20.9 million pounds ahead of the deal, which it said meets its requirements for the next two years. (Reporting by Paul Sandle; Editing by David Holmes)