Peptor an Develogen announce intention to merge

20-Nov-2003

Peptor Ltd., a biopharmaceutical company engaged in discovery and development of immunotherapeutic drugs to treat diabetes and other autoimmune diseases, and DeveloGen AG, a biology-driven drug discovery company developing novel therapies for diabetes and obesity, announced today that the boards of both companies agreed on terms to merge their businesses. In this merger of equals, the shareholders will receive a share for share offer. The merged company will have its headquarters in Germany and will be known as DeveloGen AG. The company will keep the R&D operation of Peptor in Israel and maintain the professional team for future preclinical and clinical development.

In conjunction, the companies announced a third round of financing. The investment is led by Techno Venture Management (TVM) and includes investors such as Nomura, DVC Deutsche Venture Capital, Global Life Science Ventures and Dansk Kapital Anlaeg. The merger creates an integrated biopharmaceutical company with a deep clinical, preclinical and discovery pipeline of medicines to treat metabolic diseases. The merged entity's lead product, DiaPep277, is in phase II clinical trials for type I diabetes and latent autoimmune diabetes in adults (LADA) and is partnered in a strategic collaboration with Aventis. This product is followed by two late stage preclinical products, scheduled to enter the clinic in 2004.

The clinical pipeline is complemented by an innovative and rich portfolio of discovery programmes. For example, the merged entity will be the first company with the potential to treat diabetes via both immunotherapy and regenerative medicine, the two most advanced therapeutic approaches worldwide. In addition, the company has a discovery pipeline of over 200 primary targets and 30 validated targets for diabetes and obesity. This pipeline was recently partnered with Evotec OAI in a strategic drug discovery and development alliance.

The new company will focus its financial resources on its clinical and pre-clinical programs and will employ about 85 people.

Guenther Karmann, CEO of the merged company, commented: "This is a marriage of two highly complementary sets of assets and skills. Peptor's diabetes focussed clinical pipeline is perfectly complemented by an innovative and productive discovery machine focused on metabolic disease. This gives us an advanced and sustainable flow of clinical candidates. Further, combining clinical expertise with world leading biological understanding of the mechanisms underlying metabolic diseases makes the combination a powerhouse of intellectual capital."

Helmut Schuehsler, managing partner of TVM, added: "Companies with sustainable clinical pipelines, world leading science and a clear disease focus which are supported by strong management will be the best IPO candidates. With this merger, we are building such a company which will be one of the leaders among private biotechnology companies in Europe."

Denise Pollard-Knight, Head of Healthcare Private Equity at Nomura Intl commented "Many people in the sector support consolidation as an essential step to building companies with critical mass, especially in Europe. The merger of DeveloGen and Peptor is based on truly complementary companies and is another step in building a major metabolic disease franchise in Europe that is well funded and has a clinical and preclinical pipeline underpinned with corporate partnerships."

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