In an epilogue to its long-fought patent battles, Oxford Gene Technology of Oxford, UK, announced this week that London-based microbial drug discovery company Arrow Therapeutics has acquired its microarray business in a stock-heavy deal.
Under the agreement, Arrow has acquired a license to OGT founder Ed Southern’s pioneering microarray patents, but only for internal use limited to its microbial target discovery efforts. OGT’s team of microarray scientists and technicians will also now work for Arrow, and its equipment for performing in situ oligonucleotide synthesis on microarrays is now Arrow’s property. In return, OGT has received stock in Arrow valued at approximately $8.6 million (£6 million), according to a Financial Times article, as well as a nominal cash amount.
Southern will serve as a scientific advisor to
Arrow, but will not work in a management capacity and will continue to be a professor at Oxford.
Andrew Millar, who managed OGT and spearheaded the company’s successful patent battle with Affymetrix for which it netted a $19 million settlement, will no longer be working with the company.
Arrow decided to pursue an acquisition of OGT while conducting an initial feasibility study with OGT’s microarray technology. The feasibility study involved 70 known genes of a certain microbe, two of which were critical to the organism’s survival. The company had previously developed molecular biology techniques to find these critical genes.
“Whilst [the collaboration] was happening, it appeared to both sides that this was a superb technology that had serious potential,” said Margaret Walsh, Arrow’s director of business development. “Then the results of the feasibility study were a hundred percent correct.”
By that time, Walsh said, OGT and Southern had realized that continuing to work with Arrow was a better bet than the microarray services. “If he was going to get more money out of this process, it would be with Arrow,” she said.
Before acquiring OGT’s business, Arrow spoke with the other license holders to OGT’s pioneering microarray patents, who include Affymetrix, Agilent, Rosetta Inpharmatics (now part of Merck), and Incyte. “We discussed [the acquisition] with the other IP holders, and ensured that we are not treading on their toes,” Walsh said.
Arrow’s decision to acquire OGT’s microarray business was not expressly predicated on the end of its litigation with Affymetrix, Walsh said, since the company does not plan to use OGT’s microarrays outside of its own internal discovery efforts.
Arrow plans to use the OGT microarrays in its search for microbial drug targets, which it is pursuing as part of a strategy to discover novel antimicrobial therapeutics. There is a growing demand for new antimicrobials, due to the spread of resistance to common antibiotics already in use.
Initially, OGT’s operations will remain in the Oxford BioBusiness Centre, but may move to Arrow’s London headquarters.