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In Three-Way Merger, Acuity Will Go Public, Secures Credit Line to Help Develop AMD Rx

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Acuity Pharmaceuticals this week joined the ranks of other publicly traded RNAi drug developers through a deal that includes merging with two other firms.
 
According to Philadelphia-based Acuity, it has merged with Froptix, a privately held developer of treatments for eye diseases located in Gainesville, Fla., and eXegenics, a public company formerly developing cancer and infectious disease therapies, but which currently has no active operations.
 
The combined company, which will be called Opko and based in Miami, will combine Acuity and Froptix’s pipelines and technologies with eXegenics’ publicly traded status.
 
To Acuity, the move opens the door to the capital markets and secures the support of the Frost Group, a private-equity firm headed by Phillip Frost, the former CEO and chairman of generic drug developer Ivax, who supports ophthalmic research.
 
“Phillip Frost sees ophthalmology as one of the big areas he wants to dedicate the next period of his career to,” Dale Pfost, president and CEO of Acuity, told RNAi News this week. “It’s actually an exceedingly exciting opportunity for us. The corporate public shell is a vehicle by which one can not only gain access to funds [on the public market] but … was a way of joining forces with the Frost Group.”
 
As part of the three-way merger, the Frost Group has given Opko a $12 million line of credit, a portion of which has already been drawn down, Pfost said. These funds, in combination with the roughly $16 million in cash held by eXegenics, will likely be enough for Acuity to continue developing its lead drug candidate, the siRNA-based age-related macular degeneration therapy bevasiranib, with the goal of entering phase III trials later this year, he added.
 
Frost will become chairman and CEO of Opko, with Pfost acting as president. Jane Hsiao, former vice chairman and chief technical officer of Ivax, and Steven Rubin, Ivax’s former senior vice president and general counsel, will serve on the new firm’s board.
 
The new firm currently trades on the Nasdaq’s Over-The-Counter Bulletin Board under the ticker symbol “EXEG,” but Opko is expected to be listed on the American Stock Exchange under a new symbol.
 
Further terms of the merger or the financing deal with the Frost Group were not disclosed.
However, according to an eXegenics filing with the SEC last week, the company said it completed a deal in February to sell about 19.4 million of its shares — roughly 51 percent of its issued and outstanding shares — for $8.6 million to “a small group of investors” led by the Frost Group.
 
The transaction suggests that eXegenics was valued at more than $17 million.
 
Pfost said that additional information about Opko and the merger will be available next week in a filing with the US Securities and Exchange Commission.
 
RNA Eye
 
Despite its development of bevasiranib and its recent deal with RNAi startup ZaBeCor for an siRNA drug candidate (see RNAi News, 5/4/2006), Acuity has always billed itself as an ophthalmic company. Under the Opko umbrella, it will be able to continue to do so.
 

“It’s actually an exceedingly exciting opportunity for us. The corporate public shell is a vehicle by which one can not only gain access to funds [on the public market] but … was a way of joining forces with the Frost Group.”

Pfost noted that Froptix is currently developing a number of preclinical treatments for eye disorders, including AMD. None of its technology, however, is based on RNAi, he noted.
 
Still, the gene-silencing technology is likely to be as important to Opko as it was to Acuity.
 
Pfost said that Froptix’s technologies are currently in very early development and aren’t expected to reach the clinic for a number of years.
 
Bevasiranib, meanwhile, is poised to become the first RNAi-based drug in phase III trials.
 
About six months ago, Acuity presented phase II data showing that bevasiranib was safe and produced dose-dependent decreases of the lesions that characterize AMD (see RNAi News, 9/14/2006). The company said at the time that it expects to begin testing the drug in phase III trials by mid-2007, and two years later hopes to have the drug approved in the US as a maintenance therapy.
 
"We believe ophthalmologic disorders offer major opportunities for improved therapies, and we are optimistic that our new company will develop significant products for the maintenance and restoration of vision,” Frost said in a statement.
 
At the same time, Frost also highlighted bevasiranib as having “demonstrated the potential to treat wet AMD” and noted that Opko plans to “pursue advanced clinical trials for its use as part of a treatment regimen in combination with the VEGF antagonist drugs currently prescribed for this condition.”
 
Bevasiranib is also under phase II development for diabetic macular edema, and last year Acuity signed a deal to acquire from ZaBeCor an siRNA drug candidate targeting Syk kinase for ophthalmic applications (see RNAi News, 5/4/2006).

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