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Biopharmaceuticals Mergers & Acquisitions

 News Release - April 13, 2006

Athenagen Acquires Osprey Pharmaceutical Company

Adds Clinical-Stage Alzheimer's Drug Candidate to Its Pipeline

SOUTH SAN FRANCISCO, Calif. and PONTE VEDRA BEACH, Fla., April 13 (HSMN NewsFeed) -- Athenagen, Inc., a privately held biopharmaceutical company, announced today that it has acquired the assets of Osprey Pharmaceutical Company, which include a lead clinical compound targeting Alzheimer's disease, as well as a large library of related analogs. The lead compound, GTS-21, is a novel, orally active alpha-7 nicotinic acetylcholine (nACh) receptor agonist that has demonstrated memory and cognition enhancement activity in Phase I studies. The acquisition also includes intellectual property, preclinical and clinical data, and an active U.S. IND for GTS-21. Financial terms were not disclosed.

Osprey's lead compound, GTS-21 (also known as DMXBA), is unique in that it is a selective alpha-7 nicotinic acetylcholine receptor agonist. GTS-21 has been studied in four Phase I studies in healthy volunteers and one Phase I study in schizophrenic patients. In all studies, the compound was well tolerated. In a Phase I multi-dosing, double-blind, placebo controlled study in healthy adults, cognitive enhancement was seen across all doses, with a statistically significant improvement in attention related and memory related tasks (Kitagawa et al., Neuropsychopharmacology (2003) 28, 542-551). Athenagen plans to initiate Phase II studies in patients with Alzheimer's disease in early 2007.

"GTS-21 is an excellent addition to our pipeline because it expands our nACh receptor-focused clinical portfolio with an additional therapeutic indication -- Alzheimer's disease," stated W. Scott Harkonen, M.D., President and Chief Executive Officer. "Osprey's drug discovery efforts in cognition and memory with the alpha-7 nACh receptor pathway in the brain complement Athenagen's scientific work on the endothelial nACh receptor pathway for diseases associated with angiogenesis. With our age-related macular degeneration (AMD) program and wound healing programs advancing to the clinic this year, and our first Alzheimer's Phase II trials planned to start early next year, Athenagen expects to have three Phase II programs underway in 2007."

The portfolio of compounds acquired by Athenagen was originally licensed by Osprey from the University of Florida in Gainesville. Osprey's technology is based on pioneering work conducted by William R. Kem, Ph.D., Professor in the Department of Pharmacology and Therapeutics. Dr. Kem is an expert in identifying compounds that bind to alpha-7 nACh receptors and was one of the first to characterize the role of alpha-7 nACh receptors in cognition and memory. The alpha-7 nACh receptor has been shown to stimulate cognition without causing addiction or other side effects associated with stimulation of other nACh receptors. Athenagen will continue to work with Dr. Kem in developing novel nACh receptor agonists and characterizing their uses.

"The portfolio of compounds developed by Dr. Kem offer a number of additional opportunities for Athenagen," stated John Cooke, M.D., Ph.D, co-founder of Athenagen and Chief Scientific Officer. "We are enthusiastic about the opportunity to combine his expertise in the nACh field with ours."

"Our drug discovery research group is extremely pleased that Athenagen will be continuing to support our ongoing efforts," commented Dr. Kem. "In addition to Alzheimer's disease, there are several interesting therapeutic applications that are being explored which further enhance the drug discovery and development programs at Athenagen."

About Osprey Pharmaceutical

Osprey Pharmaceutical Company, Ponte Vedra Beach, Florida, was founded in 2003 by Stefan Borg, a biotechnology veteran and entrepreneur, who served as the company's President and CEO until his sudden death in May 2005. The company planned to commercialize the lead compound in Dr. Kem's portfolio and expand on opportunities afforded by numerous other compounds in the portfolio that it licensed from the University of Florida in Gainesville. Mr. Borg had previously started two biotechnology life science companies including SunPharm Corporation (a public corporation now part of Genzyme). Mr. Borg was succeeded by Paul Herron, Osprey's Chief Financial Officer, as the interim President and CEO. Mr. Herron had worked previously with Mr. Borg as CFO of two other biotechnology companies, including SunPharm.

About Athenagen

Athenagen, Inc., located in South San Francisco, is engaged in the development of small-molecule drugs designed to either inhibit or enhance angiogenesis, based on the discovery of a new endothelial cell angiogenesis pathway, known as the nicotinic acetylcholine (nACh) receptor pathway. Athenagen's lead products are being developed as oral and topical compounds to treat diseases caused by enhanced angiogenesis, such as cancer and age-related macular degeneration (AMD), as well as topical formulations to treat diseases caused by impaired angiogenesis, such as non-healing wounds. Athenagen plans to introduce two drug candidates into the clinic in 2006: ATG002, a topical pro-angiogenesis compound for diabetic foot ulcers and ATG003, a topical (eye drop) anti-angiogenesis compound for neovascular AMD. In addition, Athenagen expects to enter Phase II clinical trials with a third program, GTS-21, for Alzheimer's disease in early 2007. For more information: www.athenagen.com.


Source: Athenagen

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