Axys Pharmaceuticals Announces Spin Out of Pharmacogenomics in Joint Venture With PPD, Inc.; Initial Capitalization Values New Subsidiary, PPGx, In Excess of $60 Million
The new company entered into an exclusive sales and marketing agreement with PPD, Inc. (PPD) (Nasdaq:PPDI) and absorbed Intek Labs, Inc. and Intek Labs Ltd., both former subsidiaries of PPD, into its operations. This spin out is the second that Axys has completed since its January 1998 acquisition of Sequana Therapeutics, Inc. In May of 1998, Axys formed Xyris Corp., a majority owned agricultural biotechnology subsidiary funded by Bay City Capital.
PPGx will operate from its headquarters in La Jolla, Calif., with laboratories in North Carolina and the U.K. The focus of the new company is to provide pharmacogenomics services to both pharmaceutical and biotechnology companies. PPGx is being led by Jean Warner, M.D., who serves as the chief executive officer of the new company.
John Walker, Axys' chairman and chief executive officer, stated, "With the formation of PPGx we can point with pride to our track record in delivering significant value from our technology platform. In combination with the Xyris spin out, we have now attained in excess of $90 million in initial value from spin outs, which are directly related to our acquisition of Sequana.
"This is, in addition to the $50 million in cash and $70 million in guaranteed partner funding that came with Sequana. We also recognized the underlying value Sequana represented to all of our strategic initiatives: sustaining a product pipeline of partnered programs, building an oncology franchise and providing for our own capital needs through the creation of spin out businesses.
"Our strategy should now be clear to all those who know Axys and have followed the company over the past year. We have built a strong pipeline in oncology, added new partners, accomplished significant milestones in our collaborations, and laid the foundation for significant value to be realized in our affiliated businesses."
Daniel Petree, Axys' president and chief operating officer, added, "We have achieved the early goals in each of our strategic initiatives while substantially reducing annualized expenses since the acquisition of Sequana.
"Our performance here closely parallels the success we had in leveraging the acquisition of Khepri Pharmaceuticals-- a transaction that has added to our oncology effort as well as providing the programs we partnered with Merck and Rhone-Poulenc Rorer for over $130 million in announced deal value."
Michael C. Venuti, Ph.D., Axys' senior vice president, research and preclinical development, commented, "Axys has successfully integrated the rich array of genomics technologies the company gained from Sequana into our drug discovery platform. As an example, we have been able to broaden the scope and nature of our functional genomics research using the recently sequenced nematode C. elegans model system.
"Nematode research has been incorporated into our own drug discovery efforts by joining it with our high throughput screening group and signing a new functional genomics collaboration with Roche-Bioscience. In addition, our nematode capabilities will play an instrumental role in our agricultural biotechnology subsidiary, Xyris Corp. We are also applying this model system in apoptosis to validate targets in our oncology program," Dr. Venuti continued.
"Assets acquired with both Khepri and Sequana make up a large part of our oncology pipeline with target identification and validation work being done in La Jolla and drug discovery being done in South San Francisco."
Axys Pharmaceuticals is a leader in the integration of life science technologies with a focus on transforming gene discoveries to drugs. The company has research collaborations with world-class pharmaceutical companies, covering a broad range of therapeutic areas, including respiratory, cardiovascular, metabolic, and infectious disease, as well as oncology and central nervous system disorders.
Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties which could cause Axys' actual results to differ materially from those discussed here, including Axys' reliance on the efforts of its collaborative partners, the risk that Axys' collaborations will not be successful, risk that clinical trials will not proceed as anticipated or may not be successful, the risk of Axys' early stage of development, the risk that Axys will not be successful in entering into new collaborations, competition, the risk of unexpected difficulties and delays in the development of new technologies and in expanding its manufacturing capabilities, and general economic conditions that may affect Axys' actual results and developments. Additional factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled "Business" and "Additional Risk Factors" in the company's SEC Reports, including the company's report on Form 10-K for the fiscal year ended Dec. 31, 1997.
For more information on Axys Pharmaceuticals, Inc., please visit the company's Web site at http://www.axyspharm.com.
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CONTACT: Axys Pharmaceuticals, Inc.
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