The deal calls for Autifony to issue 850,000 A ordinary shares to GSK inexchange for several pre-candidate voltage-gated ion channel modulatorcompounds that are aimed at treating hearing loss from conditions such astinnitus. In addition, GSK will get 571,429 Series A preferred shares inrecognition of £400,000 (approximately $658,000) worth of development workfunded by GSK on behalf of Autifony.
GSK will also be eligible to receive a further550,000 A ordinary shares on achievement of a pre-determined milestone, atwhich time there will be a further investment by the existing consortium andGSK will then own 13.2% of Autifony on a fully diluted basis.
Imperial Innovations, which seeks to invest inbusinesses founded on technology developed at universities in the UnitedKingdom, invested half of the total of a £10 million (nearly $16.5 million)funding round for Autifony, with venture capital firm SV Life Sciences providingthe other £5 million. Both entities will gain a 33.6 percent stake in Autifonyby so doing.
Autifony works closely with University CollegeLondon's Ear Institute—in particular auditory neuroscience experts Prof. DavidMcAlpine and Jennifer Linden—and has reported that it will use the cash raisedto accelerate its preclinical development program, with an eye toward startingclinical trials in early 2013. University College London is a foundingshareholder in Autifony.
The founding team for the company includes CharlesLarge, chief scientific officer, who was previously director of molecular andcellular biology at GSK, and Giuseppe Alvaro, head of preclinical drug discovery,who was previously chemistry leader within GSK's Neuroscience division. Theirboard will include non-executive Chairman John Berriman, formerly a director ofAbingworth Management Ltd. and Celltech Group plc, as well as independentnon-executive director Allan Baxter, former senior vice president of medicinesdevelopment at GSK. Maina Bhaman, director of healthcare investments atImperial Innovations, also will join the board of Autifony.
"There are currently no pharmacological treatmentsavailable for hearing loss or tinnitus despite the increasingly large number ofpatients, both old and young, that suffer from these conditions," Large says. "Autifonyrepresents an important opportunity to bring together our drug-discovery experiencewith the expertise of academic groups in this field, in particular the EarInstitute. Autifony's goal will be to find effective new medicines that canreduce the burden of suffering for this poorly served patient group. "
"This is a creative approach to building newcompanies, leveraging established pharmaceutical assets together with the worldclass scientific expertise that exists at the UCL Ear Institute," says SusanSearle, CEO of Imperial Innovations.