Tuesday, December 23, 2008

Archemix, GSK sign $27.5M inflammatory-disease deal

By Marc Songini

Pharmaceuticals giant GlaxoSmithKline PLC (GSK) is forming a $27.5 million alliance with Cambridge-based biotech Archemix Corp. to co-develop aptamer technology to treat inflammatory disease.

The cash, which will be paid upfront, includes a $6.5 million equity investment from GSK. Archemix is potentially eligible to receive up to $200 million in payments for development and other milestones for each of seven aptamer therapeutics slated to be discovered and developed as part of the alliance. Moreover, Archemix may receive royalties on worldwide sales of potential products.

Archemix specializes in developing aptamers, which are short nucleic acid sequences that bind to proteins. Archemix sees potential for aptamer therapeutics to treat inflammatory disorders, such as rheumatoid arthritis and inflammatory bowel disease. Archemix’s task is to continue the aptamer research through completion of clinical proof of mechanism. The duration of its involvement also depends on when GSK chooses to exercise an option to have exclusive license rights to develop and sell Archemix’s drug product candidates.

Last month, Archemix also announced it was merging with Lexington-based drug developer NitroMed Inc. (NASDAQ: NTMD) in an all-share transaction. That merger requires approval from Archemix’s and NitroMed’s shareholders, and depends on the completion of the sale of NitroMed’s BiDil and BiDil XR drug business to a third party, and other conditions.

Because of the $27.5 million GSK cash infusion, Archemix estimated that the value of cash and equivalents for the combined company at the merger’s close will run from $78 to $88 million.