NEW YORK (GenomeWeb News) - Lion Bioscience said yesterday that it has acquired the operational business of Axaron Bioscience to create a drug-development firm with a focus on central nervous system disorders.
Under the terms of the transaction, which Lion's supervisory board approved yesterday, Axaron's majority shareholder, BASF Aktiengesellschaft, will invest $8.96 million in the new company, Lion will invest $29.45 million, and two investment firms led by SAP founder Dietmar Hopp will contribute $26.89 million, bringing the total funding for the new firm to approximately $65 million.
As an intermediary step in the transaction, the Hopp family, Axaron, and BASF have created a firm called Sygnis Bioscience, which will assume the business activities of Axaron following the approval of Axaron shareholders, expected to take place at the company's annual general meeting on August 10.
Lion will then acquire all shares of Sygnis with 78.6 percent of its approved capital. In exchange for these shares around 7.8 million new Lion shares will be issued to Sygnis shareholders.
Following the transaction, the Hopp family will own 20.5 percent of the new firm; Friedrich von Bohlen, founder and chairman of the supervisory board of Lion, will own 7.6 percent; BASF and Bayer will own 5.1 percent each, and Lion shareholders will own 61.7 percent.
The two Hopp investment companies and BASF have also committed an additional €18 million ($22.9 million) in the new firm.
Axaron was founded in 1997 as a joint venture between BASF and Lynx Therapeutics (now Solexa). The company became an independent firm in 2001 and currently has 35 employees. AX200, the company's candidate for the treatment of strokes, is currently being tested in a phase IIa clinical trial.
Axaron has raised a total of €47 million since 1997.